Dr Reddy’s (DRRD) PAT at Rs 1.2bn plummeted 80% YoY following a disappointing quarter for the US business. Top-line reduced to Rs 32.3bn (down 13% YoY) on account of major price corrections in key products in the US, coupled with weak PSAI sales. EBITDA margins contracted ~1450bps YoY, led by negative operating leverage and a few one-offs. Although DRRD will report better numbers in India and EM geographies going ahead, the US business has taken a major hit in the base business, leading to weak FY17 earnings estimates (at Rs 95). Profitability is expected to recover moderately in 2HFY17 on the back of a few scheduled launches, but regulatory resolution at the oncology plant remains a key factor. HDFC Securities resume coverage with a NEUTRAL rating on the stock owing to (1) A weak FY17E outlook and (2) FY18E growth being dependent on regulatory resolution. Their TP is Rs 2,900 (20x FY18E EPS of Rs 145, assuming resolution in FY18).Trendlyne has 24 reports on DRREDDY updated in the last year from 7 brokers with an average target of Rs 3339.2 . Brokers have a rating for DRREDDY with 1 downgrade,6 price downgrades,1 upgrade,2 price upgrades in past 6 months and 3 downgrades,8 price downgrades,2 upgrades,8 price upgrades in past 1 Year.