The Hindu Business Line : Divi’s Lab on a roll

The stock of Divi’s Laboratories has been witnessing strong gains on the bourses for quite sometime. The stock on Monday gained 9.79 per cent to end at Rs 6,693.60. Week-on-week, the stock gained 7.44 per cent while month-on-month, it added 38.2 per cent. According to brokers, a group of punters is betting on the stock reporting a strong Q1 as well as full year (2007-08) performance by the company.

The Hyderabad-based company had posted a net profit of Rs 101 crore for the fourth quarter of the financial year 2006-07, registering a 341 per cent jump over the previous year’s comparative quarter. A section of the traders expect the robust trend to continue.

The company’s board also recommended split of equity shares from the face value of Rs 10 each to Rs 2 each. It also got members’ approval for stock split on Monday.

However, some analysts advise caution on the stock saying that “the recent run-up defies logic.”

They further added that as a momentum stock it could see sharp correction if the benchmarks started to decline. Deliverable ratio is also very low on the counter, they said. Of the traded 6.01 lakh shares, only 14 per cent was presented for delivery on the NSE on Monday.

K.S. Badri Narayanan

More Stories on : Stocks | Stock Markets | Ear to the ground | Pharmaceuticals

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