External broker reports(aggregated public sources), Motilal Oswal Financial Services Limited

Motilal Oswal

External broker reports(aggregated public sources)

Motilal Oswal Financial Services Limited

Motilal Oswal Financial Services Limited is an Indian diversified financial services firm offering a range of financial products and services. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Equity Bottom-Up

<p>DIVI delivered in line 2QFY22 earnings led by strong offtake in the Custom Synthesis (CS) segment and ramp up in the Nutraceuticals segment. It has enough capacity to cater to upcoming demand of Molnupiravir. We reduce our FY22E/FY23E EPS estimate by 5%/2% to factor in moderation in Generic API prospects over the near to medium term and increased OPEX related to expanded capacity. We roll our TP for 12-months forward earnings and continue to value DIVI at 36x to arrive at TP of INR6,050.</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

DIVI delivered in line 2QFY22 earnings led by strong offtake in the Custom Synthesis (CS) segment and ramp up in the Nutraceuticals segment. It has enough capacity to cater to upcoming demand of Molnupiravir. We reduce our FY22E/FY23E EPS estimate by 5%/2% to factor in moderation in Generic API prospects over the near to medium term and increased OPEX related to expanded capacity. We roll our TP for 12-months forward earnings and continue to value DIVI at 36x to arrive at TP of INR6,050.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Custom Synthesis/Nutraceuticals drive earnings growth

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<p>The Hang Seng, EURO STOXX 50, MSCI ACWI ex-US, and MSCI EAFE display bearish short-term inflections. Additionally, 10-year yields in the US and Germany are breaking down below key support. These deteriorating market dynamics raise concerns of a deeper pullback, however other indicators remain largely positive. As a result, we continue to see a mixed, but overall constructive market. Actionable themes highlighted in today's report include Health Care and Real Estate.</p>

The Hang Seng, EURO STOXX 50, MSCI ACWI ex-US, and MSCI EAFE display bearish short-term inflections. Additionally, 10-year yields in the US and Germany are breaking down below key support. These deteriorating market dynamics raise concerns of a deeper pullback, however other indicators remain largely positive. As a result, we continue to see a mixed, but overall constructive market. Actionable themes highlighted in today's report include Health Care and Real Estate.

Global Equity Strategy: Mixed Market Environment Continues As Yields Break Down

<p>DIVI delivered in line 4QFY21 earnings. It ended FY21 on a strong note, with 29%/57%/54% YoY growth in sales/EBITDA/PAT. New product development, ongoing capex, and strong prospects in Custom Synthesis (CS) provides...</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

DIVI delivered in line 4QFY21 earnings. It ended FY21 on a strong note, with 29%/57%/54% YoY growth in sales/EBITDA/PAT. New product development, ongoing capex, and strong prospects in Custom Synthesis (CS) provides...Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

DIVISLAB: DIVI delivered in line 4QFY21 earnings

<p>Our outlook remains unchanged as the weight of the evidence continues to suggest a mixed, but overall constructive market. Cyclical value Sectors continue to be our favorite areas to overweight (i.e., Energy, Materials, Manufacturing, and Transportation), while defensive Sectors also continue to be worth a look (i.e., Staples, Health Care, and Real Estate). </p>

Our outlook remains unchanged as the weight of the evidence continues to suggest a mixed, but overall constructive market. Cyclical value Sectors continue to be our favorite areas to overweight (i.e., Energy, Materials, Manufacturing, and Transportation), while defensive Sectors also continue to be worth a look (i.e., Staples, Health Care, and Real Estate). 

Global Equity Strategy: Value Remains Leadership But Defensives Improving

Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

<p><a href="https://www.smartkarma.com/entities/divi-s-laboratories-ltd" target="_blank" data-smartkarma-citation="entities:4871:1" rel="noopener">Divi'S Laboratories (DIVI IN)</a> is a leading API manufacturer with dominant market share (60-70% in most cases) across the globe in molecules like Naproxen, Dextromethorphan, Gabapentin, etc. While Divi's has done well this past year with tailwinds from China supply disruption, we believe the environment is normalizing with supply from China going back to pre-COVID levels. We think the current margin expansion to 40%+ levels has been temporary and is likely to stabilize back to &lt;40% levels. At the same time, valuations have peaked significantly to around 50x P/E, highest ever since the boom pre Global Financial Crisis. Growth profile is also maturing as 50% of current revenues come from old APIs which at best have potential to grow in mid-single-digits range.</p>
<p>Below we elaborate on some of the aforementioned concerns while also balancing our view with some of the positives that could pose upside risk to our thesis. However, overall we remain bearish on the stock. </p>

Divi'S Laboratories (DIVI IN) is a leading API manufacturer with dominant market share (60-70% in most cases) across the globe in molecules like Naproxen, Dextromethorphan, Gabapentin, etc. While Divi's has done well this past year with tailwinds from China supply disruption, we believe the environment is normalizing with supply from China going back to pre-COVID levels. We think the current margin expansion to 40%+ levels has been temporary and is likely to stabilize back to &lt;40% levels. At the same time, valuations have peaked significantly to around 50x P/E, highest ever since the boom pre Global Financial Crisis. Growth profile is also maturing as 50% of current revenues come from old APIs which at best have potential to grow in mid-single-digits range.
Below we elaborate on some of the aforementioned concerns while also balancing our view with some of the positives that could pose upside risk to our thesis. However, overall we remain bearish on the stock. 

Divi's Labs: Peak Margins, Peak Valuation and Maturing Growth Profile - Juice Is No More

India

Divi's Laboratories Ltd. manufactures pharmaceutical products which include generic drugs and their intermediates. The Company also undertakes contract research activities for other pharmaceutical companies.

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Divi's Laboratories (DIVI IN)

Custom Synthesis/Nutraceuticals drive earnings growth

DIVI delivered in line 2QFY22 earnings led by strong offtake in the Custom Synthesis (CS) segment and ramp up in the Nutraceuticals segment. It has...

Motilal Oswal

Global Equity Strategy: Mixed Market Environment Continues As Yields Break Down

The Hang Seng, EURO STOXX 50, MSCI ACWI ex-US, and MSCI EAFE display bearish short-term inflections and 10-year yields in the US and Germany are...

Vermilion Research

DIVISLAB: DIVI delivered in line 4QFY21 earnings

DIVI delivered in line 4QFY21 earnings. It ended FY21 on a strong note, with 29%/57%/54% YoY growth in sales/EBITDA/PAT. New product development,...

Motilal Oswal

Global Equity Strategy: Value Remains Leadership But Defensives Improving

Cyclical value Sectors continue to be our favorite areas to overweight, while defensive Sectors also continue to be worth a look (i.e., Staples,...

Vermilion Research

Divi's Labs: Peak Margins, Peak Valuation and Maturing Growth Profile - Juice Is No More

Divi's is a dominant global API manufacturer but is priced to perfection. With margins and valuations at peak and growth profile maturing, upside...

Ankit Agrawal, CFA

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