Dr Reddy's Laboratories - Q4FY21 First Cut - ICICI Direct

(CMP - Rs. 5312, MCap - Rs. 88307 crore)

Dr Reddy's Laboratories' posted a decent set of numbers, in-line with I-direct estimates on all fronts.

Q4FY21 Earnings Summary

- Revenues grew 7.2% YoY to Rs. 4768 crore (I-direct estimate: Rs. 4669 crore) with strong growth in Europe and Indian markets being partly offset by decline in US. Domestic revenues grew 23.5% YoY to Rs. 844 crore (I-direct estimate: Rs. 874 crore) due to Wockhardt integration and new product launches. Europe revenues grew 14.8% YoY to Rs. 396 crore (I-Direct estimate: Rs. 396 crore) due to new launches. US revenues de-grew 3.2% YoY to Rs. 1749 crore (I-Direct estimate: Rs. 1674 crore) mainly due to Covid related stocking in Q4FY20 and price erosion. The PSAI segment grew 10% YoY to Rs. 792 crore (I-Direct estimate: Rs. 756 crore) amid new product launches. Russia & Other CIS revenues grew 4% YoY to Rs. 593 crore (I-Direct estimate: Rs. 598 crore). ROW sales grew 24.5% YoY to Rs. 292 crore (I-Direct estimate: Rs. 269 crore)

- EBITDA margins were up 75 bps YoY to 22.1% (I-direct estimate of 22.0%) with higher gross margins amid better product mix being partly offset by higher freight and Wockhardt integration costs. Subsequently, EBITDA grew 11.0% YoY to Rs. 1053 crore against I-direct estimate of Rs. 1026 crore

- Net profit de-grew 28.7% YoY to Rs. 557 crore (I-direct estimate: Rs. 580 crore). Delta vis-a-vis EBITDA was due to negative tax outgo in base year amid DTA adjustments

The management remains committed to working on cost rationalisation, especially on the SGN&A front and calibrating of R&D spend more towards Global Generics front & Biosimilars and lower towards proprietary products. Key growth drivers in the near term would be key launches across geographies besides continuing growth momentum in Global Generics especially in India and Russia.

We would be coming out with a detailed report post interaction with the management.

Shares of DR.REDDY'S LABORATORIES LTD. was last trading in BSE at Rs.5195.85 as compared to the previous close of Rs. 5302. The total number of shares traded during the day was 233088 in over 25124 trades.

The stock hit an intraday high of Rs. 5398 and intraday low of 5160. The net turnover during the day was Rs. 1230955812.

Source : Equity Bulls

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