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Last Updated : Feb 06, 2017 01:18 PM IST | Source: CNBC-TV18

Good Q3 but Dr Reddy's still far from sustainable growth: Expert

Surajit Pal, Research Analyst at Prabhudas Lilladher, said the pharma sector is undergoing a transition and all the large midcaps will underperform.


While Dr Reddy’s Laboratories December quarter earnings beat street estimates, the pharma major is far from making long-term sustainable growth a reality, said Surajit Pal, Pharma Analyst at Prabhudas Lilladher.


Speaking to CNBC-TV18, Pal said largecaps need two-three years to establish growth drivers, and supplying fresh products and strong approvals would be key to sustaining revenue growth.

He said Dr Reddy’s had done a good job this quarter under the circumstances.


The sector is going through a transition, which he believes may extend to FY18, adding, all largecaps in the sector including Sun Pharma and Cipla would underperform.

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DRL's profit for the quarter declined 16 percent year-on-year to Rs 492.3 crore but increased sharply by 59.4 percent sequentially. Revenue slipped 6.4 percent YoY to Rs 3,723.2 crore due to weak global generics business but grew 3 percent quarter-on-quarter.

The company told CNBC-TV18 that pricing pressure in the US had been quite deep.

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First Published on Feb 6, 2017 11:25 am
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