Dr Reddys Lab - Q4FY13 Result Review - Angel Broking

DRL posted numbers better than expected. The sales came in at Rs. 3,340cr is V/s Rs. 2,409cr, registering a growth of 26%yoy. The growth was mainly driven by PSAI segment, which grew by 44.6% yoy, while the generic segment grew by 18.2% yoy. While, all the regions grew at robust growth in PSAI, the generic segment growth was driven by the USA market, which grew by 30.7%. The company posted an OPM of 21.8% V/s 19.8% (expected), down from 24.1% in the last corresponding period. Higher than expected OPM's during the period aided the net profit to come in at Rs. 571cr, V/s expectation of Rs. 313cr. Also the net profit was aided by higher income during the quarter, which came in Rs. 163cr, aided by the US $ 22.5mn as one time settlement done with Nordion Inc., towards the damages sustained by the company due to the breach by Nordion of the then existing Laboratory services agreement for bioequivalence studies.

We remain neutral on the stock.

Source : Equity Bulls

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