DRLs revenues decreased by 10% YoY to Rs 35.8 bn (lower than our estimates of Rs39.6 bn) due to tepid performance across Generics (-11.5%)and PSAI(-2.3%). Gross margins decreased by 529bps YoY to 56% in Q2FY17 (marginal lower than our estimates of 56.2%) due to greater price erosion in key products. Its operating profit has tanked to Rs 6301mn during the quarter due to decline in revenues, higher SGA including remediation costs and R & D expenses. Net profit de-grew by 59.1% YoY to Rs 2.95bn (lower than our estimates of Rs 4.7 bn) .