- 03 Jan 2025
- ICICI Securities
DIVI’S LABS PART OF PHASE I OF UNIT III OF THE KAKINADA PLANT HAS COMMENCED OPERATIONS
News: Divi’s labs commenced commercial operations from a part of the Phase I of Unit III greenfield project at Kakinada, The phase I of the Unit III greenfield project of the Company at Kakinada is being implemented on 200 acres of 500 acres Unit III site, with an estimated capex of ₹1,200-₹1,500 crores.
Views: The company in the initial phase plans to start manufacturing of products intended for backward integration, thus freeing units I and II entirely for finished products. It will also initiate filing formalities with global regulatory bodies for phase 1. Post approvals, this facility (like units I & II) will cater to both CS and generics customers. Although there will be initial unabsorbed fixed overheads, in the long run the added capacity is expected to bolster revenues and margins. Similarly, the company can also take a call on commencing production in phase 2, depending upon the demand.
Impact: Positive