Q2FY24 Preview: Dr. Reddy's Laboratories: Revenue seen at Rs. 65,393 million, PAT at Rs. 11,141 million

26 Oct 2023 , 10:56 AM

Result date: October 27, 2023

Recommendation: Reduce

Target price: Rs. 4,970

Dr. Reddy’s Laboratories could post 4% growth in revenue over the year-ago quarter. Decline in Revlimid sales on a sequential basis from $125 million in Q1 to $90 million in Q2. Analysts at IIFL Capital Services expect weak monsoons to drive muted growth for acute players in the September 2023 quarter.

Sequential decline in RUB/INR of 13% will impact gross margins in the quarter. Consequently, EBITDA margins could decline significantly.

Profit After Tax (PAT) could grow 9% over the year ago quarter, while declining 21% sequentially.

Important management insights to watch out for:

• Growth outlook 
• Margin drivers and trends thereof

Rs. Million	September 2023 estimates	YoY change	QoQ change
Revenue	65,393	3.7%	(3.0)%
EBITDA	17,240	(4.3)%	(15.7)%
EBITDA margin (%)	26.4%	(220) bps	(398) bps
Profit After Tax	11,141	9.0%	(20.6)%

Source: IIFL Research