Divi's Labs Q1 Results: Management sees multiple growth prospects in next three years, price pressure stabilising

The net profit was down nearly 50 percent compared to the Rs 702 crore figure it reported in the year-ago quarter.

Net profit in the base quarter was also aided by a forex gain of Rs 56 crore. Forex gain during the June quarter stood at Rs 3 crore.

Revenue for the quarter also came in less than the Rs 2,042.4 crore that the street was expecting at Rs 1,778 crore.

Operating profit, or EBITDA at Rs 504 crore was marginally below expectations of Rs 522.3 crore, while margin of 28.3 percent is 230 basis points higher than the CNBC-TV18 poll of 26 percent.

As pricing pressures are now stabilising, Divi's is expecting an improvement in both margins and growth going forward.

The management further added on the call that it expects further softening in raw material prices which are already on a downward trend. While the custom synthesis business is doing well, Divi's is confident that it can retain the margins on this business.

Divi's further said that it is working on a number of big projects with big pharma companies.

Shares of Divi's Laboratories are off the day's low, currently trading 1.3 percent higher at Rs 3,725.15. The stock is now up 10.5 percent on a year-to-date basis.