Dr Reddy's Labs Q4 PAT seen up 28% at Rs 429 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