Stock market today: Despite a dip in the first three months of the current year, shares of Divi’s Laboratories Ltd demonstrated remarkable resilience, bottoming out at ₹3,370 per share mark at the end of March 2024. This resilience is a testament to the company’s strength and potential, making Divi’s Lab share price an attractive option for stock investors. The company’s Q4 results for 2024 exceeded expectations, further bolstering investor confidence. Analysts have noted that Divi’s Lab share price is showing strength from both a fundamental and technical perspective. They anticipate a near-term increase, with shares expected to reach ₹4,630 apiece.
Triggers for Divi’s Lab share price rally
Elucidating the fundamental factors driving the rally in Divi’s Lab share price, Prathamesh Masdekar, Research Analyst at StoxBox, stated, “Divi’s Lab Q4FY24 performance outperformed expectations due to higher-than-anticipated revenue from its synthesis business, leading to the expansion of Operating margins. With a positive outlook for custom synthesis, new API/intermediate supply opportunity, and China+1, we anticipate robust sales growth for Divi’s lab in the mid-teens. In the future, we expect company guides to accelerate in contrast to media products as it has established a pipeline of products with multiple global customers. This offers near-mid-term growth visibility.”
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“Divi’s Laboratories expects sustained long-term growth in the custom synthesis business led by a ramp-up in ongoing projects, enquiries for several new projects, entered into a long-term supply agreement with an MNC for an investment of Rs. 6.5-7 bn for capacity addition, which is expected to be operational by January 2027. and its preparedness for the upcoming complex Peptide opportunity. The company is also banking on multiple new generic filings across regulated markets and volume opportunities in contrast to media APIs. The company is targeting 6-7 patent expiry opportunities and expects some of them to start contributing from late FY25,” the StoxBox expert added.
Divi’s Lab share price target
Ganesh Dongre, Senior Manager — Technical Research at Anand Rathi, provides a detailed technical analysis of Divi’s Lab share price. He notes that after a decline in the first three months of the current year, the share price bottomed out and saw a fresh upside in April and May. The stock has given a fresh breakout on the weekly chart at the ₹4,100 level, indicating a potential increase to ₹4,630 per share in the near term.
Regarding the recommendation to stock market investors concerning Divi’s Lab share price, Ganesh Dongre advised, “Divi’s Lab shareholders can retain the scrip with a stop loss at ₹4,020 and continue to accumulate on every significant dip. New investors can also purchase Divi’s Lab shares at the current market price of ₹4,630, following a buy-on-dips strategy with a stop loss of ₹4,020.”
Disclaimer: The views and recommendations above are those of individual analysts, experts, and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Published: 31 May 2024, 11:38 AM IST
