Technology

Dr. Reddy’s Laboratories (DRL) posted lower than expected results for 3QFY2017.
In INR terms, the consolidated revenues came in at Rs3,707cr (v/s. Rs4,000cr
expected) v/s. Rs3,989cr in 3QFY2016, down 6.6% yoy, mainly driven by pressure
on the generic market. The global generic market with sales at Rs3,064cr (down
9.0% yoy), was mainly lead by Europe (Rs214.8cr, up 11% yoy) and Emerging
market (Rs594.8cr, a yoy dip of 7%). The PSAI segment posted sales of Rs540cr, up
6.0% yoy. On the operating front, the EBIT margin came in at 9.7% (v/s. 17.1%
expected) v/s. 18.8% in 3QFY2016. Consequently, the PAT came in at Rs470cr
(v/s. Rs536cr expected) v/s. Rs579cr in 3QFY2016, a yoy de-growth of 18.8%. We
maintain our Neutral rating.

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