Dr. Reddy's Laboratories Ltd. share price target

As per our expectations, earnings started picking up from Q2FY18 onwards. Revenues came in line with our expectations however, better margins aided earnings. If the key approvals come by expected timelines, DRL can show robust earnings in H2FY18E. A lot depends on timely approvals and pricing scenario for key assets in US. We remain optimistic as the management has indicated closer TAD dates for gCopaxone 20mg (10th Nov17), which could lead to sooner gCopaxone 40mg(Mar18). They also highlighted that TAD...

Mylan received an ANDA approval for gCopaxone 20mg/ml (branded market sales: USD600m) and 40mg/ml (branded market sales: USD2.2-2.3b). Mylan is the second generic filer to receive an approval for 20mg/ml (Sandoz/Momenta is already in the market). In 40mg/ml, Mylan is the first filer to receive an approval. Copaxone is indicated for the treatment of patients with relapsing forms of multiple sclerosis (MS). 40mg launch may happen at risk': Although the company will be launching 20mg/ml strength now, the 40mg/ml product is still under litigation. In January...

Dr Reddy's Labs posted poor results for 1QFY2018, which were much lower than expectations. The sales came in at `3,316cr (`3,636cr expected) v/s. `3,235cr, a yoy growth of 2.5%. Global Generics at `2,745.5cr, posted a yoy growth of 3.0%, while PSAI at `465.1cr, registered a yoy de-growth of 1.0%. On operating front, the EBDITA came in at ..

Downgrade to SELL with a TP of Rs 2,275 (17x Jun19E). Dr. Reddys Labs (DRRD) posted weak numbers, with the top-line growing only ~3% YoY in 1QFY18. This was led by a 3% decline in the US business and a 10% decline in domestic revenues. The EBITDA margin came in at 9.2%, sinking ~700bps QoQ, with the gross margin plummeting to 51.5% during the quarter. Incremental competition in the US continues to erode profits in the absence of new lucrative product launches. The impact of GST on the domestic business also contributed to the margin decline. PAT was Rs 591mn, down 53% YoY despite the low base.

ICICI Securities Ltd | Retail Equity Research Revenues grew 3% YoY to | 3316 crore (I-direct estimate: | 3302 crore) mainly due higher volume uptake in emerging markets and Europe as well as new launches across geographies. This was partially offset by price erosion in the US and channel destocking in the India due to GST transition EBITDA margins declined 534 bps to 9.8% (I-direct estimate: 16.3%) due to sharp 464 bps decline in gross margins to 51.6% (I-direct...

Revenue decreased by 4.11% to Rs. 3554.2 Cr in Q4FY17 when compared to the previous quarter

Dr Reddy's (DRRD) Q4 US sales declined 8% QoQ to USD 227mn on pricing pressure (10-12% YoY), supply constraint, lack of meaningful launches (key facilities under Warning Letter).

Background: Dr. Reddy's is a global generic pharmaceutical company with focus on the US, Europe, Russia and India. Finished dosage and API account for a bulk of the revenues, with up to 60% of sales derived from overseas operations. With a strong research pipeline, its R&D; is focused in the areas of cancer, diabetes, cardiovascular, inflammation and bacterial infections. Dr. Reddy's offers a portfolio of products and services including APIs, custom pharmaceutical services, generics, biosimilars, differentiated formulations and NCEs. It has one of the largest ANDA & a patent challenge pipeline has strengthened presence through the launch of several...

Dr. Reddy?s Labs (DRRD) failed to maintain the recovery (albeit slow) shown in the last two quarters in 4QFY17. A 19% sequential drop in North American sales led to a 7% miss on the top line, and a lower EBITDA margin at 17%. With no substantial launches lined up over the next few quarters and lingering regulatory issues, we expect only ~12% CAGR in the US business, and 11% CAGR in the overall top line over FY17-19E.

ICICI Securities Ltd | Retail Equity Research Revenues declined 5% YoY to | 3554 crore (I-direct estimate: | 3632 crore) mainly due to 19% decline in US sales to | 1535 crore (I-direct estimate: | 1610 crore) led by increased competition in key products coupled with discontinuance of McNeil contract EBITDA margins declined 643 bps to 15.1% (I-direct estimate: 21.3%) mainly due to a sharp decline in gross margins by 549 bps to 51.2% (I-direct estimate: 56%) led by one-offs...