Dr. Reddy's Lab - Q3FY12 Result Update - Emkay

Reco: HOLD
CMP: Rs 1,671
Target Price: Rs 1,650

Para-IV Upsides Priced-in - Maintain Hold

- Q3FY12 Results – Revenues at Rs2.77bn (up 46%YoY), b) EBITDA at Rs8.7bn (up 129% YoY) and c) APAT at Rs4.9bn (up 82% YoY)

- Zyprexa contributed USD99mn, excluding this base business grew 22% YoY led by US biz which grew by 29% & INR dep

- Base biz margins were flat YoY and declined 110bps QoQ led by flat growth in Russia and lower benefit from DEPB. APAT declined 10% YoY and 18% QoQ to Rs2.5bn

- Going forward, even though lot of Para-IVs are lined up for launch in US, upsides are largely priced in. Unless there is an improvement in base biz, we continue to maintain Hold rating with a price target of Rs1650.

Source : Equity Bulls

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