Divi`s Laboratories` Market Capitalization

Snowflake IPO: A Rebound for the US Stock Market
Case Code: FINC183
Case Length: 8 Pages
Period: 2003-2021
Pub Date: 2021
Teaching Note: Available
Price: Rs.200
Organization: Divis Laboratories Limited
Industry: Pharmaceuticals & Biotech
Countries: India
Themes: Investment Decisions Investment Philosophy
Snowflake IPO: A Rebound for the US Stock Market
Abstract Case Intro 1 Case Intro 2 Excerpts


Strategic Advantage

Divi’s was one of the largest manufacturers of generic Active Pharmaceutical Ingredients (APIs) in the global markets. The company also had a strong track record of successfully executing a custom synthesis business for the global pharma companies as an outsourcing service. As a part of cost cutting measures initiated by the global pharma majors, manufacturing APIs had been entrusted to companies in the developing countries, mainly in Israel and India. For example, in the US, AstraZeneca Pharmaceuticals (AstraZeneca) operated several API manufacturing facilities. Since 2007-2008, the number of API facilities operated by AstranZeneca had gone down considerably and by 2020-21, only 15% of the APIs were being created in the US..

Market View

Divi’s was one of the key suppliers of APIs like “Naproxen” a non-steroidal anti-inflammatory drug, Detromethorphan (used as a cough suppressant), and Gabapentin, an Anti-convulsant, etc. This helped the company become one of the largest suppliers of APIs in the world. It continued to focus on strengthening the CRAMS segment also, which contributed to the growth of the company. The stability of the business model made Divi’s a favorite of the investors..


Exhibit I: List of the Companies of Rs. 1 Trillion above Market Capitalization*
Exhibit II : Quarterly Revenue and Profit Trends of Divi’s during the financial year 2020-21

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