I agree, the stock does appear overvalued. However, two points for consideration:
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The earnings do not factor in the contrast media opportunity, the company have talked about being ‘the most backward integrated company’ and ‘being among the top 5 players in the world’. I am not sure if this opportunity is completely built into the price. Any meaningful contribution to revenue is only expected in Q4 FY25.
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Many Indian pharma companies that have legacy API businesses are struggling to compete with the price point that Divis sells. At this point, many of them are cross-subsidizing the API businesses through their other business as it allows them to keep control of the overall value chain - I think Divis will be able to gain more market share from these competitors.
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