Q1FY24 Preview: Dr. Reddy's Laboratories: Revenue seen at Rs. 65,349 million, PAT at Rs. 9,847 million

25 Jul 2023 , 12:00 PM

Result date: 26^th July, 2023

Recommendation: Reduce

Target price: Rs. 4,350 

Dr. Reddy’s Laboratories (Dr. Reddy’s) could post sequentially flat Revlimid sales at $75 million. Mayne acquisition could contribute $25 million per quarter from June 2023 quarter onwards, believe analysts at IIFL Capital Services. They expect sequential growth ex-Mayne to come in at 4%. Delayed monsoons in India will drive muted growth for acute players. The company’s total sales could grow 8.3% sequentially, while US sales could grow 12.1% on a sequential basis. Ramp-up of gAmitiza, gNuvaring, gRemodulin and gLexiscan will aid US business but could be partly offset by lower market share in gKuvan.

Analysts at IIFL Capital Services expect the company’s margin to shoot up 324 basis points sequentially largely due to higher sales of gRevlimid.

The company’s Profit After Tax (PAT) could grow 37% on a sequential basis.

	June 2023 estimates	QoQ change	YoY change
US Revenue (US$ mn)	345	12.1%	49.2%
Revenue (Rs. mn)	65,349	8.3%	31.1%
EBITDA (Rs. mn)	16,076	24.8%	147.4%
EBITDA margin	24.6%	324 bps	1,156 bps
Profit After Tax (Rs. mn)	9,847	37.0%	181.4%

Source: IIFL Research