Dr Reddy's Laboratories' third quarter profit is expected to fall 13.6 percent year-on-year to Rs 534.3 crore, according to the average of estimates of analysts polled by CNBC-TV18.
Revenue is seen going up 2.4 percent to Rs 3,617 crore in the quarter ended December 2014 from Rs 3,534 crore in same quarter last fiscal.
Analysts expect a weak performance during the quarter due to currency depreciation in Venezuela, Russia. They expect earnings to be impacted by 8-10 percent due to currency volatility despite hedges.
Dr Reddy's derived around 15 percent of sales (in FY14) from Russia and other markets in the region. Russian revenues fell 13 percent in Q2FY15 on the back of similar reasons.
Even the management (during the quarter) had told CNBC-TV18 that ruble depreciation would impact topline and bottomline. However, topline for Venenzuela business won't be impacted as growth will offset it, the management says.
Russian ruble depreciated 53 percent against dollar and Ukrainian hryvania fell 22 percent in Q3.
Geographical break up: Dr Reddy's Labs has 15 percent exposure to Russia and CIS, 12 percent to Europe, 4 percent to Latin America and 1 percent to Africa.
Russian business is estimated to decline around 20 percent in third quarter. However, the management during the quarter had indicated drug price increases would counter the depreciation in currency.
CIS is expected to report flat growth while domestic formulations are expected to grow over 15 percent Y-o-Y. US markets gains may be offset by decline in Russia and CIS markets, say analysts.
US growth may be aided by new launches - Valcyte generic, Sirolimus and acquisition of Habritrol. Analysts also expect traction from Vidaza, Dacogen and Divalproex generic; and pick up in drugs such as Amoxicillan, OTC products.
Operating profit of the pharma company may fall 9.4 percent on yearly basis to Rs 786.4 crore and margin may decline 2.46 basis points to 22 percent in the quarter gone by.
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