Saurabh Mukherjea has recommended a buy of Divi’s. He stated that its earnings were firecracker earnings – both the Q4 and FY22 numbers. He pointed out that brokers expressed concern that one of the reasons they had such stellar earnings in FY22 was because of Molnupiravir and that being a Covid drug, demand could ebb off going forward. However, Divi’s was not built on one drug and will sign up for plenty of other products. The relationship that Divi’s has with the top six pharma companies in the world is unrivalled in Indian Pharma.
He explained that no other Indian pharma company has that strength of relationship with firms like Pfizer, Glaxo, Mylan. Divi’s will have a power packed pipeline given especially what is happening in China. China makes 10 to 20 times more API than India does and my reckoning is this is a clear directive from the highest levels of American government to the American pharma companies to source more from India, less from China and if there is one company that will make money on that redirection of API sourcing, that will be Divi’s.
Saurabh also stated that he is capitalising on the fall in stock prices. There is a clear restructuring of global API sourcing lines against China in favour of India and our deduction from that is in favour of Divi’s and therefore we remain buyers of Divi’s on a daily basis, he said.