Dr Reddy's Labs Q1 PAT seen up 6.2% at Rs 584.3 cr: MOST

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26 Aug, 2025 12:21

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Motilal Oswal has come out with its first quarter (April-June) earnings estimates for the pharma sector. The brokerage house expects Dr Reddy's Laboratories to report a 12.6 percent growth quarter-on-quarter (growth of 6.2 percent year-on-year) in net profit at Rs 584.3 crore.

Sales are expected to decrease by 0.8 percent Q-o-Q (up 9.2 percent Y-o-Y) to Rs 3840.1 crore, according to Motilal Oswal.

Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 10.6 percent Q-o-Q (up 11.5 percent Y-o-Y) to Rs 910.1 crore.

Motilal Oswal's Report on Dr Reddy's Laboratories:

Dr Reddy’s Lab is expected to report muted numbers in 1QFY16, with 9 percent YoY revenue growth and 6 percent YoY PAT growth.

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Due to lack of launches, the US business is likely to grow only 11 percent YoY to INR18.4b. Russia and CIS region is expected to witness 26 percent YoY sales decline due to currency devolution. However, India business would report buoyant growth in 1Q.

EBITDA is expected to grow 11 percent YoY to INR9.1b and EBITDA margin to improve 50bp YoY to 23.7 percent with better business mix.

PAT is likely to improve 6 percent YoY to INR5.8b, slower than EBITDA due to lower other income during the quarter.

Even though the near-term earnings growth is muted, we believe the company is focusing on the right areas for growth in the US. We expect accelerated launches in the US in FY16/17 to drive strong double-digit growth in FY16/17.

The stock trades at 23.7x FY16E and 20.2x FY17E earnings.

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