Dr. Reddy's Laboratories Ltd. share price target

Revenues, EBITDA were broadly in line while net profit was higher mainly due to lower tax rate and higher other income. Adjusted for these, net profit was also almost in line with our estimates Revenues grew 7.2% YoY to | 3817.5 crore (I-direct estimate: | 3857.7 crore) as 26.8% YoY growth in Russia & other CIS to | 520 crore and 63.7% YoY growth in RoW sales to | 229.2 crore were largely offset by muted growth in the US to | 1426.5 crore EBITDA margins improved 109 bps to 19.9% (I-direct estimate:...

US business declines, margins outperform: DRL's revenues increased by 7% YoY to Rs 37.9 bn (lower than our estimates of Rs 38.9 bn) primarily due to de-growth in US business on account of higher pricing pressure due to incremental competition in some of the key products.

Re-iterate BUY with a TP of Rs 2,825 (18x Sep '20E EPS +Rs 520 for niche products). Despite witnessing steep QoQ fall (-18%) in the US dollar revenues (~US 197mn), Dr Reddys Lab (DRRD) reported in-line result in 2QFY19. Revenues were up 7% YoY/2% QoQ to Rs 38bn, EBITDA margin came in at 19.5% was up 75bps and PAT at Rs 5bn grew 77% YoY and 10% QoQ. Revenue growth was largely led by the branded generic markets like Russia, CIS and RoW. Improved profitability was primarily contributed by favorable business mix and currency fall in 2QFY19.

Headquartered out of Hyderabad, Dr. Reddy's Lab manufactures and sells a wide range of pharmaceutical products in India and Internationally. The Company operates out of three business segments - Pharmaceutical Services & Active Ingredients, Global Generics, and Proprietary Products. Its major markets include India, USA, Russia and CIS, Germany, UK, Venezuela, S. Africa, Romania...

Maintain NEUTRAL with a TP of Rs 2,340 (18x FY20E + 10x on non-core earnings) Dr. Reddys Labs (DRRD) 1QFY19 result was better with revenue at Rs 37.2bn, up 12.2%YoY and 5.3% QoQ. The low base of 1QFY18 inflates the YoY growth whereas QoQ comparison provides a better picture of the results. EBITDA increased 37.5%QoQ to Rs 7.6bn with margin at 20.4%. This is largely due to the higher than estimated sales of gSuboxone

ICICI Securities Ltd | Retail Equity Research Revenues grew 12.1% YoY to | 3736.5 crore (I-direct estimate: | 3577 crore) on the back of 1) gSuboxone windfall, 2) lower base in the domestic formulations and 3) strong revival in Russia. US revenues grew 6.4% YoY to | 1590 crore (I-direct estimate: | 1517 crore) on the back of gSuboxone (anti-opioid addiction) launch EBITDA margins improved to 20.6% (I-direct estimate: 17.3%) from 9.7% in Q1FY18 and 17.3% in Q4FY18 mainly due to sharp reduction...

Dr. Reddy's Labs (DRRD) today received final approval from the USFDA to launch Buprenorphine and Naloxone Sublingual Film, a generic version of Suboxone, in the the US market. Although the product is covered by seven patents until 2023, DRRD has got favorable ruling from the district court for four main patents. Indivior has challenged this ruling in the higher court and the decision is still pending. DRRD is doing an at risk' launch of gSuboxone based on the comfort it has on the patent litigation. The drug is indicated for the treatment of opioid addiction. Competitive dynamics of gSuboxone: Apart from DRRD, Mylan has received...

Maintain NEUTRAL with a TP of Rs 2,130 (16x FY20E + 10x on non-core earnings). Dr. Reddys Labs (DRRD) reported muted numbers in 4QFY18. Top line remained flat YoY/down 7%QoQ at Rs 35.3bn, largely affected by lower US revenues. EBITDA declined 6%YoY to Rs 5.5bn with 15.6% margin. Sustained price erosion in the US and higher contribution of PSAI revenues were the primary reasons for subpar profitability. Reported PAT came in at Rs 3bn, down 3%YoY (in line).

DRL reported numbers below our estimates as the revenues were lower due to sales disruption impacted in EU and lower channel offtake impacted in Russia, coupled with US pricing pressure and competitive scenario. The...

4QFY18 was a weak operating quarter for Dr Reddy's with Revenues/EBITDA/PAT being 4%/22%/13% below our estimates. Revenues declined 1% YoY to INR 35.3bn mainly driven by the decline in (i) US generics (-6% YoY; -10% QoQ) due to increasing competition in key products, and, (ii) Russia (-25% YoY; -24% QoQ) due to lower off-take by channels. While gross margin improved 230bps YoY to 53.5% (vs. JMFe 54.1%), EBITDA margin declined 83bps YoY to 15.6% (JMFe 19.3%) due to increase in SG&A; expenses (+10% YoY), translating into EBITDA declining 6% YoY to INR 5.5bn (22% miss). PAT declined 3% YoY (10% QoQ) to INR 3.0bn (13% miss), partly benefitting from gains from sale of investments (net finance income of INR 1.0bn in 4QFY18)....