• Dr Reddy's Laboratories Ltd. discloses third-quarter net profit for the six months ended December 2022 that was 77% more than anticipated.
Dr Reddy's Laboratories Ltd, a pharmaceutical company, reported an unexpected 77% increase in net profit for the third quarter ending December 2022 compared to the same period a year earlier, coming in at 1,247 crore. In contrast, its quarterly revenue increased 27% to 6,770 crore from 5,319.7 crore year over year (YoY). The business said that generic Revlimid, a multiple myeloma medication introduced in the US last September, is significantly boosting topline.
Following the Q3 results, brokerage on Dr. Reddy's shares -
"With a number of complicated chemicals in its pipeline and prospective business opportunities in China, Dr. Reddy's offers long-term promise. However, performance issues resulting from price erosion and competition among current compounds will affect ex-Revlimid US development. We still put a lot of work into developing biosimilars." Keep an eye on it, but be careful of its long-term prospects. We extend our comfort. Due to gRevlimid, FY24E/25E EPS were 13%/12% higher than anticipated, although core EPS remained unchanged. targeting a price of 4,675 Keep your grip, "said Edelweiss.
"With higher than anticipated sales of gRevlimid, Dr. Reddy's announced a great Q2 result, exceeding both our and consensus projections. Total gRevlimid was the source of the income. A good adj. EBITDA margin of 29.7% was achieved by an adjusted gross margin of 58.6% that was supported by gRevlimid. Excluding gRevlimid, core EBITDA margin was, in our opinion, in the range of 21-22%.
The ramp-up in the US, fresh launches in India, and normalised EBITDA margin (25%) are anticipated, and they will be backed by stable growth in EM. With a new target price of $4,880, we retain our Buy recommendation, brokerage Centrum reported.
"Despite recent subpar performance in the core business, DRL's near- to medium-term view remains consistent with guidance of 30 new launches in the US (and no significant regulatory delay), excellent growth expectations in India (assisted by recent deals), and PSAI Driven to improve. and the ongoing development of RoW formulations. Strong gRevlimid contribution anticipated over FY23-FY26E will support this. Another catalyst is free cash flow supported by a solid balance sheet and acquisition readiness. Dam Capital has a target price of 4,825 and is maintaining its Buy* rating.
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