Views on Dr.Reddy's Laboratories Ltd 4QFY2017 Results: Angel Broking

Views of Ms. Sarabjit Kour Nangra (VP Research- Pharma, Angel Broking):

"The company posted much below expected numbers for its 4QFY2017 results. On top line it posted de-growth of 5.0% YoY to end the period at INR 3,552cr V/s INR 4,020cr expected. The dip in the sales was driven by the Generic sales (INR 2,914cr), which posted a 5% YoY dip, while PSAI (INR 540.1cr), posting a YoY dip of 6.0%. The dip in the Generic market was lead by the USA (INR 1,535cr), a YoY dip of 19%. Europe (INR 206.6cr), posted a YoY growth of 17%, while India (INR 571.1cr) posted a YoY growth of 8.0%. Emerging markets, on the other hand posted a YoY growth of 25.0% to end the period at INR 601.2cr. On the operating front, EBIT margin came in at 7.4% V/s 16.0% expected V/s 13.5% in 4QFY2016, a sharp dip of 6.1% YoY. This was mainly on back of Gross margins which came at 51.2% V/s expected 59.0%, mainly on back of the pressure in the USA business. Thus, PAT came in at INR 312cr V/s INR 484cr expected V/s INR 75cr in 4QFY2016. Given the valuations, we maintain our NEUTRAL rating on the stock."

Shares of DR.REDDY'S LABORATORIES LTD. was last trading in BSE at Rs.2584.7 as compared to the previous close of Rs. 2592.4. The total number of shares traded during the day was 149387 in over 10000 trades.

The stock hit an intraday high of Rs. 2615 and intraday low of 2525.25. The net turnover during the day was Rs. 385259870.

Source : Equity Bulls

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