Dr Reddy's Q1 net profit seen up 25% YoY to Rs 421 cr

Moneycontrol Bureau

Generic drugs maker Dr Reddy's Laboratories will report its first quarter earnings on Tuesday. Analysts on average expect the Hyderabad-based company to report a net profit of Rs 421 crore, up 25 percent year-on-year, according to a CNBC-TV18 poll. The company's revenue growth is seen at Rs 3,127 crore, up 23 percent year-on-year. Dr Reddy's earnings will be boosted by a strong growth in the US market and better currency realisations, apart from lower base. Its EBITDA (earnings before interest, taxes, depreciation and amortization)is expected to rise 64 percent to Rs 641 crore, while operating profit margin is seen expanding to 21 percent from 15.4 percent. Analysts expect Dr Reddy's US market sales to grow 20 percent year-on-year over FY2013-15, while the Russian market is seen growing 15-17 percent. The domestic business, however, could see some slowdown and is estimated to grow 10-13 percent YoY.  "Dr Reddy's year-on-year revenue growth could be led by strong growth in the US and Russia generics and steady growth in domestic formulations," says HDFC Securities. The brokerage expects US revenue to grow by over 30 percent in Q1 driven by the launch of generic version of Propecia (anti-hair loss drug), Zometa (injection to prevent skeletal fractures in patients with cancers), Reclast (treating osteoporosis) and Accutane (for cystic acne and chemotherapy treatment for brain, pancreatic and other cancers). KEY THINGS TO WATCH - Q1 margins
- Growth across key markets
- Outlook for the rest of the year
- Visibility of key US ANDA pipeline monetization STOCK WATCH Dr Reddy's shares closed down 3.3 percent at Rs 2,217.70 on NSE on Monday. Since March-end, the stock has gained 25.5 percent, significantly outperforming the wider Nifty index, which is up close to 3 percent during the same period. The CNX pharma index has gained 20 percent during the same period. Also Read: Colgate-Palmolive Q1 net profit up 58% on exceptional gain