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Research
Dr. Reddy's Laboratories - 1QFY2018 Result Update - Angel Broking
Posted On : 2017-08-03 21:15:51( TIMEZONE : IST )
Dr Reddy's Labs posted poor results for 1QFY2018, which were much lower than expectations. The sales came in at Rs. 3,316cr (Rs. 3,636cr expected) v/s. Rs. 3,235cr, a yoy growth of 2.5%. Global Generics at Rs. 2,745.5cr, posted a yoy growth of 3.0%, while PSAI at Rs. 465.1cr, registered a yoy de-growth of 1.0%. On operating front, the EBDITA came in at 9.2% (16.1% expected) v/s. 11.7% in 1QFY2017. R&D expenses were at 15.3% of sales in 1QFY2018 v/s. 14.8% of sales in 1QFY2017. Consequently, the PAT came in at Rs. 59cr (Rs. 321cr expected) v/s. Rs. 126cr in 1QFY2017, a yoy de-growth of 53.2%. We maintain our neutral.
A subdued quarter: The sales came in at Rs. 3,316cr (Rs. 3,636cr expected) v/s. Rs. 3,235cr, a yoy growth of 2.5%. Global Generics at Rs. 2,745.5cr, posted a yoy growth of 3.0%, while PSAI at Rs. 465.1cr, registered a yoy de-growth of 1.0%. The Global Generics, which forms 83% of overall sales, saw dip in its key growth market USA (Rs. 1,494.6cr), which posted a dip of 4.0% yoy, while Indian sales at Rs. 468.7cr posted a dip of 10.0%. The USA market continued to reel under the pricing pressures, while Indian sales were under the pressure on the back of GST. On operating front, the EBDITA came in at 9.2% (16.1% expected) v/s. 11.7% in 1QFY2017. R&D expenses were at 15.3% of sales in 1QFY2018 v/s. 14.8% of sales in 1QFY2017. Consequently, the PAT came in at Rs. 59cr (Rs. 321cr expected) v/s. Rs. 126cr in 1QFY2017, a yoy de-growth of 53.2%.
Outlook & Valuation: We expect net sales to grow at a CAGR of 13.0% to Rs. 17,973cr and adjusted EPS to post a CAGR of 23.6% to end the period at Rs. 111 in FY2019E. We recommend a Neutral.
Shares of DR.REDDY'S LABORATORIES LTD. was last trading in BSE at Rs.2331.85 as compared to the previous close of Rs. 2379.85. The total number of shares traded during the day was 58841 in over 4098 trades.
The stock hit an intraday high of Rs. 2399 and intraday low of 2323. The net turnover during the day was Rs. 138943532.
