Divi's Laboratories, a Rs. 4,000 crore plus pharma major from Hyderabad, has suffered setback during the second quarter ended September 2017 on account of US FDA warning letter. Its net profit declined by 7.6 per cent to Rs. 206.78 crore from Rs. 223.85 crore and its net sales went down by 11.5 per cent to Rs. 890 crore from Rs. 1005 crore in the corresponding period of last year. Its EBIDTA declined marginally to Rs. 310.79 crore from Rs. 311.48 crore.
Its employees cost declined to Rs. 104.82 crore from Rs. 179.64 crore in the last period due to the one-time ex-gratia of Rs. 79 crore paid to employees on the occasion of 25 years' formation of the company. Forex gain for the quarter amounted to Rs. 11 crore as against a loss of Rs. 11 crore during the corresponding quarter of last year. With lower net profit, EPS declined to Rs. 7.79 from Rs. 8.43 in the last period.
Despite lower profit, Divi's scrip went up by 4.5 per cent or Rs. 39.80 to Rs. 921.05 on BSE in the morning session today. The scrip touched to yearly highest level at Rs. 1319 on November 10, 2016 and lowest at Rs. 533 on May 29, 2017.
For the first half ended September 2017, Divi's net sales declined by 15.4 per cent to Rs. 1,711 crore from Rs. 2,023 crore in the similar period of last year. Its net profit also declined by 27.1 per cent to Rs. 383.32 crore from Rs. 525.66 crore.
The company's unit-II at Visakhapatnam, Andhra Pradesh was inspected by HPRA (Ireland) and JAZMP (Slovenia) and the inspection concluded successfully with no critical observations. However, US FDA, after inspection of this Unit during September 2017, the investigators have issued a Form-483 with 6 observations. The company has taken necessary steps in respect of cGMP and filed its response to the same within the stipulated time.