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Last Updated : May 20, 2020 07:43 AM IST | Source:

Dr Reddy's may report healthy Q4, focus to be on new launches

Brokerage firm Motilal Oswal Financial Services expects a 16.4 percent year-on-year (YoY) rise in the company's sales to Rs 4,465.6 crore for Q4FY20.

Pharma major Dr. Reddy's Laboratories will release its March quarter earnings on May 20 wherein it may report healthy year-on-year growth, said brokerages.

Apart from the numbers, investors will keep a close eye on any update on ANDA filings/launches over the next 12–15 months. Moreover, update on Nuvaring, Copaxone approval, commentary on cost optimisation and timelines for Wockhardt portfolio acquisition will also be in focus, said experts.

Brokerage firm Motilal Oswal Financial Services expects a 16.4 percent year-on-year (YoY) rise in the company's sales to Rs 4,465.6 crore for Q4FY20.


EBITDA may jump 55.7 percent YoY to Rs 996 crore for the same quarter, said Motilal Oswal.

Motilal's estimates show the company's adjusted PAT may surge 102.2 percent YoY to Rs 608.3 crore.

Brokerage firm Kotak Institutional Equities expects US business to bounce back to $235 million (up $13 million QoQ), given the benefit of recent launches.

"We forecast 12 percent YoY growth for India, while we expect Russia/CIS to decline 5 percent YoY, given RUB depreciation. We expect RoW to grow at 13 percent YoY and expect the EU to grow 24 percent YoY. We expect PSAI business to grow 8 percent YoY," Kotak said.

Kotak expects gross margins at 53.9 percent (down 20 bps QoQ), EBITDA margins at 21.7 percent, and adjusted EPS to grow 46 percent YoY.

The estimates of Kotak shows, Dr Reddy's net sales may see a growth of 3.2 percent YoY, while adjusted PAT may be higher 46.1 percent YoY. EBITDA may see a growth of 9.8 percent YoY and EBITDA margin percentage can climb 130 bps YoY.

Estimates of Sharekhan by BNP Paribas shows a 5.5 percent YoY rise in Dr Reddy's net sales, while adjusted PAT may rise 6.9 percent YoY. The operating margin percentage may also climb to 22.5 percent in Q4FY20 against 20.3 percent in Q4FY19.

Equirus Securities expects a flat quarter sequentially for the company, owing to the dearth of new high-value launches (barring gVimovo).

"Domestic business is expected to be robust as distributors have stocked-up inventory, however, sequentially it would be flat as Q3 is a high base," said Equirus.

The company's net sales may show a 7.7 percent YoY rise while PAT is likely to rise 27.2 percent YoY. EBITDA may rise to 19.5 percent YoY while EBITDA margin may climb 225 bps YoY.

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First Published on May 20, 2020 07:43 am
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