Shares of Dr Reddy's Laboratories declined 4 percent in the early trade on July 29, a day after company reported its June quarter earnings.
Dr Reddy's Laboratories on July 28 reported a 108 percent growth in its consolidated net profit at Rs 1,188 crore for the first quarter of FY23 as against a profit of Rs 571 crore registered in the year-ago period.
Sequentially, the profit increased multifold from Rs 87.5 crore logged during the January-March period.
During the previous quarter, the company had an impairment charge of Rs 751.5 crore, adjusting for which the profit for the previous quarter would have been Rs 839 crore.
Consolidated revenues of the pharmaceutical major rose 6 percent YoY to Rs 5,215 crore as compared to a revenue of Rs 4,919 crore registered in the Q1FY22. Sequentially, the revenue fell marginally by 4 percent from the revenue of Rs 5,437 crore recorded in the previous quarter.
Here is what brokerages have to say about stock and the company post June quarter earnings
Goldman Sachs has maintained neutral rating on the stock and cut the target to Rs 4,380 per share after disappointing results, with limited near-term catalysts ahead.
It has cut FY24-25 EBITDA estimates by 5-7 percent to factor slower topline/margin development.
US business fell 14 percent QoQ as company experienced increased competition in two key products, reported CNBC-TV18.
Foreign research firm Credit Suisse has kept neutral rating on the stock and cut the target price to Rs 4,050 per share.
The concern on high US exposure has played out, while Revlimid opportunity is not without a risk.
Credit Suisse has cut FY23/24/25 EPS estimates by 9 percent/9 percent/1 percent. The large exposure to US oral solid segment can negatively surprise, reported CNBC-TV18.
Brokerage house Morgan Stanley has kept overweight rating on the stock with a target at Rs 5,099 per share.
Broking house expect consistent performance in ensuing quarters as its strong balance sheet leaves scope for M&A opportunities.
The management maintained its near-to-mid-term guidance, reported CNBC-TV18.
Dr Reddy’s (DRRD) Q1FY23 profitability adjusted for one-time divestment income was weak impacted by lower GMs and US sales. Our FY24E EPS stands reduced by 4%.
We expect margins to improve with easing of commodity and as revenue scale up with new launches in US like gRevlimid.
India revenues were healthy. We estimate margins ex of gRevlimid at 19% and 22% in FY23E and FY24E.
We maintain our ‘Buy’ rating with revised Target Price of Rs 4,750/share (Rs 4,900 earlier). We assign 22x FY24E EPS plus Rs250/share for gRevlimid NPV. Delay in key ANDA approvals and prolonged inflationary environment of raw material prices are key risks to our call.
At 09:17 hrs Dr Reddy's Laboratories was quoting at Rs 4,094.65, down Rs 164.55, or 3.86 percent on the BSE.Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.