Q3FY23 Preview: Dr. Reddy's Laboratories: Revenue seen at Rs62,016 million, PAT at Rs9,919 million

24 Jan 2023 , 12:15 PM

Dr. Reddy’s Laboratories could post healthy growth in US sales during the quarter, following continued momentum in niche products. Domestic business could post 6-7% revenue growth over the year-ago quarter, with gastro, respiratory and cardiac therapies taking the lead. Analysts at IIFL Capital Services expect revenue to grow 17% over the year-ago quarter and decline 2% sequentially. Exluding Revlimid, growth could be subdued.

Key margin pressures include price pressures in US, high input cost inflation and integration of low-margin Cidmus brand in India.

The company is likely to post 39% in Profit After Tax (PAT) over the year-ago quarter.

Important management insights to watch out for:

• Outlook on the PSAI segment, amid COVID-related volatility seen globally
• Growth drivers of the branded generics segment
• Margin levers and outlook

	December 2022 estimates	YoY change	QoQ change
Revenue (Rs mn)	62,016	17%	(2)%
EBITDA (Rs mn)	15,339	28%	(15)%
EBITDA margin	24.7%	214 bps	(383) bps
Profit After Tax (Rs mn)	9,919	39%	(3)%

Source: IIFL Research