Sequential decline in gross margin is attributed to lower off-take in Russia market, lower Proprietary business income and price erosion in key products. Decrease in US business by 10% QoQ was mainly due to high contribution of Sevelamer carbonate in the previous quarter, while YoY decline is primarily due to continued high price erosion and increased channel consolidation in some of the key products. Europe business declined during the quarter by 17% YoY to INR1.7b due to price erosion and temporary supply disruption. Decrease in GM sequentially is primarily due to lower off-take in Russia market, lower Proprietary business income (received milestone payment of USD20m in 3QFY18 as against USD2.5m in 4QFY18) and price erosion in key products. We value DRRD at 18x FY20E EPS, at ~10% discount to sector average (one-year Regulatory issues in key plants Pricing pressure in base business in US Stabilization of emerging market economies/currency, mainly Russia/CIS (12% of sales).