How is Divi's Laboratories indirectly
benefiting from supply chain
disruption due to the Covid 19
Pandemic
A Thread 𧡠ππ»
#investing #COVID19
@caniravkaria
benefiting from supply chain
disruption due to the Covid 19
Pandemic
A Thread 𧡠ππ»
#investing #COVID19
@caniravkaria
For pharmaceutical industry on procurement side,
power outages in China have impacted the supply, creating a shortage thereby making the prices volatile of basic chemicals, commodities, raw materials and especially the solvents.
Letβs see how divis is handling this issue:
power outages in China have impacted the supply, creating a shortage thereby making the prices volatile of basic chemicals, commodities, raw materials and especially the solvents.
Letβs see how divis is handling this issue:
1) CAPEX program for debottlenecking backward
integration and upgrading of utilities, taken up during the last two years are continuously resulting in minimising supply
risk and production disruption, achieving in more improved financial performance.
integration and upgrading of utilities, taken up during the last two years are continuously resulting in minimising supply
risk and production disruption, achieving in more improved financial performance.
2) On the other hand, smaller players in the same segment are having a tougher time due to increase of energy, increase of coal price and meeting all the requirements.
3) They are among the first one to
backward integrate their portfolio
which makes sure that they have assurance of supply as well as cost savings.
They backward integrate newer generics once they reach a 60%, 70% of the market share.
backward integrate their portfolio
which makes sure that they have assurance of supply as well as cost savings.
They backward integrate newer generics once they reach a 60%, 70% of the market share.
4) They constantly work on
expanding into new technology, atom chemistry and efficiency. This is helping them to cut down the waste, consuming less
raw materials .
expanding into new technology, atom chemistry and efficiency. This is helping them to cut down the waste, consuming less
raw materials .
5) This in turn helps them to keep their costs in check, thus keeping the gross margin healthy even in these tough times.
The numbers speaks for itself:
Itβs standalone net profit increased by 17% in q2 on YOY basis.
The numbers speaks for itself:
Itβs standalone net profit increased by 17% in q2 on YOY basis.
6) To further work on efficiency front:
They are planning to manufacture
majority of their key raw materials and key intermediaries.
They are planning to manufacture
majority of their key raw materials and key intermediaries.
7) So we can clearly see the focus on
A) Assurance of supply
B) Having consistent quality with
no impurities
C) Backward integration to help
their costing.
A) Assurance of supply
B) Having consistent quality with
no impurities
C) Backward integration to help
their costing.
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