Its revenue from operations stood at Rs 5,843 crore in Q4 FY23, up 15.28% YoY as against Rs 5,068.4 crore in Q4 FY22. Meanwhile, total expenses were down 4% at Rs 5,132.2 crore against Rs 5,348.4 crore in Q4FY22.
“Dr Reddys’ reported an all round miss vs our expectation as US revenues declined 17% QoQ and margin stood at 25%. Management commentary reaffirmed growth in US business though we sense it may be difficult to grow on a Revlimid base in FY25 and beyond,” YES Securities said.
At 10.07 am, the stock was trading 6.4% lower at Rs 4,558 on BSE. However, the stock has surged over 17% in the last one year.
Should you buy, sell or hold Dr Reddy’s stock? Here’s what analysts say:
Jefferies | Buy
Jefferies maintained its Buy rating on Dr Reddy’s Laboratories with a target price of Rs 5,650. Revlimid sales drop leads to miss on estimates.
The US sales could remain volatile but the new product launch momentum remains strong across geographies. The global investment bank lowered FY24 EPS by 5% on lower margins.
Prabhudas Lilladher
Prabhudas Lilladher downgraded Dr Reddy’s to Reduce from Buy with a revised target price of Rs 4,500 from Rs 4,900.
“Dr Reddy’s Q4FY23 reported profitability was in line with our estimate. Adjusted for one-time divestment income (Rs 2.65 billion), EBITDA was 20% below our estimates impacted by lower GMs and higher overheads. Our FY24E and FY25E EPS stands reduced by 10% and 6% as we factor in lower margins ex of gRevlimid,” it said.
JM Financial
JM Financial maintained its Buy rating on Dr Reddys with a target price of Rs 5,980.
“DRRD’s 4Q earnings were below our estimates on account of lower gRevlimid sales which reflected in EBITDA and PAT misses. We have factored in Mayne Pharma acquisition into our estimates and expect it to be earnings accretive in FY24 itself. The US base business ex-Revlimid is around USD 250mn, in our view, which should see some improvement from upcoming launches (25-30 in FY24),” it said.
YES Securities
YES Securities downgraded Dr Reddy’s to Neutral with a target price of Rs 5,150.
“Dr Reddys’ reported an all round miss vs our expectation as US revenues declined 17% QoQ and margin stood at 25%. Management commentary reaffirmed growth in US business though we sense it may be difficult to grow on a Revlimid base in FY25 and beyond,” YES Securities said.
Motilal Oswal
Motilal maintained its Neutral rating on Dr Reddy’s with a target price of Rs 4,500.
While DRRD delivered 39% YoY earnings growth in FY23, we expect moderation in the earnings CAGR to 3.6% over FY23-25 due to a high base of FY23 and limited visibility of potential products to deliver growth over the next two years.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
For all the latest Business News Click Here
For the latest news and updates, follow us on Google News.
