Dr Reddy's Labs Q4 EBITDA seen up 85% at Rs 712 cr

Pharmaceutical company Dr Reddy's Labs is expected to report a growth of 28% year-on-year in its profit after tax of Rs 429 crore for the fourth quarter of FY12, according to CNBC-TV18 poll.

Revenues too are seen going up by 27% to Rs 2,564 crore in the quarter ended March 2012 as against Rs 2,017 crore in a year ago period.

EBITDA is likely to jump 85.2% to Rs 712 crore from Rs 384.4 crore during the same period.

Operating profit margin is seen improving at 27.8% in the January-March quarter of 2012 versus 19% in the corresponding quarter of last fiscal.
 
On quarter-on-quarter basis, revenues are likely to fall 7%, EBITDA by 5.6% and profit after tax seen down by 16%.

Expectations

Revenue growth is on the back of US markets: exclusivity + higher share in Arixtra generic and Allegra OTC

Last quarter the company had Olanzapine generic which contributed USD 99 million or Rs 490 crore and US grew 133% to Rs 1,111 crore

Exclusivity Opportunities this quarter

Olanzapine (Zyprexa)

DRL launched Zyprexa generic in partnership with Teva in October 2011 with 180-day exclusivity

Analysts on average expect the Olanzapine to contribute Rs 220 crore in Q3FY12 it contributed Rs 490 crore or USD 99 million

Ziprasidone of Geoden launched in first week of March

Analysts expect Geoden generic to contribute Rs 65 crore  

Geoden generic is a USD 1.35 billion anti-psychotic drug

India business is expected to grow YoY due to a low base (Q4FY11 it was up only 5%). However India’s secondary sales is a concern in Q3FY12 it grew 11% to Rs 333 crore due to 6 new launches

Margins are expected to improve due to exclusivity sales but base margins could be compressed due to higher overheads