Prime Stock Recommendation: The cream of the crop in the CDMO space
A safe bet in a space defined by uncertainty and uneven growth.
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2 thoughts on “Prime Stock Recommendation: The cream of the crop in the CDMO space”
Excellent article Pavithra !
You have captured all the data and quantitative aspects so well. You have also captured most of the qualititative aspects in the article.
Let me add two more components of Divi’s secret sauce. There are two main reasons why Global Big Pharma trusts Divi’s more than any other API company in India for their key CRDMO projects:
1. Divi’s has an exellent record of IP protection (where generally Indian and Chinese companies are not trusted across various industries).
2. Divi’s has time and again categorically stated that they have no ambition of entering into formulation business (unlike most of their Indian API and CDMO contemperories). Since most of their clients are into formulation business, they face a threat that their API supplier might launch a formulation with the same API and become a competitor.
The above two silent strengths give an immense confort to largest clients globally – and this is nearly impossible to capture in numbers.
There is also a contra strategy that has worked very well for them. While most large API players in India have a huge product list (APIs that they manufacture commercially) and pipeline (APIs that they are developing for filing and future launch) – Divi’s probabaly has the smallest list and pipeline. They work on a very small focussed list – items where they keep an ambition of being able to become one of the top 3 in the world and to be able to control the market pricing as far as possible. This razor sharp focus has helped them stay ahead in terms of controlling costs and becoming one of the most profitable companies.
Thank you so much for your feedback Sir and even more for being so generous with your insights and expertise. These are very important points that you have highlighted. We greatly appreciate it!
Pavithra