Pharma major Dr Reddy's Laboratories is expected to report a 4.1 percent growth in first quarter net profit at Rs 573.09 crore year-on-year, according to average of estimates of analysts polled by CNBC-TV18. Profit growth may be impacted by lower EBITDA and other income.
Revenue is seen rising 9.1 percent to Rs 3,837.21 crore from Rs 3,517.5 crore during the same period. The company will announce its earnings on July 30.
US business is expected to grow only 10-12 percent year-on-year due to lack of US launches/approvals. The company was expecting 4-5 approvals mostly from Srikakulam plant. Base business in US may be aided by Vidaza, Dacogen and Depakote Lipitor, Geodon, Caduet drugs.
Russia/Commonwealth of Independent States (CIS) is likely to continue being pressured due to Ruble depreciation Y-o-Y but sequentially that may recover. Analysts expect Russia/CIS business to decline 20-25 percent Y-o-Y.
In Rest of the World, revenues from Venezuela are expected to grow but for Venezuela, transalation losses neet to be watched. In FY15, Dr Reddy's Labs registered balance sheet translation loss in Venezuela to the tune of USD 14 million due to a three-tier currency system.
India may continue to do well in Q1, which grew 15.7 percent in Q4FY15. Europe, too, may continue its positive momentum (grew 32 percent in Q4).
Pharmaceutical services and active ingredients (PSAI) could recover to even 25-30 percent Y-o-Y growth, but may remain sluggish on sequential basis. PSAI in Q4FY15 was up 12 percent Y-o-Y led by 36 percent growth in Europe.
Operating profit is seen rising 2.2 percent to Rs 662 crore and margin may decline 111 basis points to 17.3 percent, impacted by research & development expenses. R&D cost increased by 29 percent Y-o-Y in Q4 and 41 percent in FY15.
Commentary on Srikakulam plant is a key factor to watch out for. Dr Reddy's addressed the concerns posed by the USFDA for API produced from the Srikakulam plant.
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