DRL Q3 EBITDA seen up 103% to Rs 596 cr

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DRL Q3 EBITDA seen up 103% to Rs 596 cr

Pharmaceutial firm Dr Reddy's Laboratories is expected to report a profit after tax of Rs 425 crore in the third quarter of FY12, a massive growth of 55.5% as compared to Rs 273 crore in a year ago quarter.

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By Ekta Batra, Research Analyst at CNBC-TV18

Pharmaceutial firm Dr Reddy's Laboratories is expected to report a profit after tax of Rs 425 crore in the third quarter of FY12, a massive growth of 55.5% as compared to Rs 273 crore in a year ago quarter.

Revenues are seen going up by 35% to Rs 2,562 crore from Rs 1,899 crore year-on-year.

EBITDA is likely to go up by 103% to Rs 596 crore versus Rs 293.4 cr during the same period.

Operating profit margin is expected to be improving at 23% versus 15.5% year-on-year and 16.5% quarter-on-quarter.

On quarter-on-quarter basis, revenues are seen going up by 13% and EBITDA by 59%. Profit after tax is likely to shot up 38%.

Watch out for:

- US business driven by exclusivity will be a key growth driver, hence ripple effect on margins & bottomline

- DRL launched Zyprexa generic with 180 day exclusivity -expect USD 63 million sales & USD 50 million PAT contribution

- DRL launched Zyprexa generic in partnership with Teva in October 2011

- Other contributors: Levaquin generic where the company captured 30 to 35% share, Arixtra and Allegra generic
* US last Q grew 42% YoY to Rs 629 crore

- Russia could see lower growth on tighter liquidity conditions, however prescription sales to lead growth     
* In Q2, Russia/CIS grew 23% YoY to Rs 338 crore

- Domestic growth to lag industry - expect it to show the same trend of sub 10 to 10% this quarter
* In Q2, India grew 9% to Rs 346 crore versus industry growth of 13 to 14%

Europe - watch for pricing pressure

- In Q2, Europe fell 10.5% to Rs 212 crore: Germany down 27% to Rs 120 crore and rest of Euro +26%

- Margin boost due to Zyprexa generic exclusivity

- Expect forex gains of Rs 16 crore odd

Recently the stock fell 3% on the back of the USFDA issuing notice for changes on ad content for Arixtra generic