Dr Reddy's Labs Q1 results preview: Net profit likely at Rs 1,036 crore, margin may improve by 800 bps

Dr Reddy's Laboratories (DRL) — India's third largest drug maker by market capitalisation (mcap) — is scheduled to report its financial results for the April-June period on Wednesday, July 26. Analysts expect the pharmaceutical major to stage a strong quarterly performance driven by growing demand and improving margin. 

According to Zee Business research, Dr Reddy's Labs is estimated to report a consolidated net profit of Rs 1,036 crore for the quarter ended June 2023. The analysts estimate the company's revenue to increase 22.9 per cent on a year-on-year basis to Rs 6,432 crore for the first quarter of the current financial year. 

The drug maker is expected to report Rs 1,658 crore in earnings before interest, taxes, depreciation and ammortisation (EBITDA) for the three-month period, which translates to a year-on-year increase of 76 per cent, according to the research. 

Zee Business analysts peg Dr Reddy's Labs' margin at 26 per cent — an improvement of 800 basis points compared with the year-ago period. 

They estimate growth of 35 per cent in the company's revenue from the US and 14 per cent in that from Europe. 

How Dr Reddy's fared in Q4 

For the quarter ended March 2023, Dr Reddy's reported a net profit of Rs 960 crore and revenue of Rs 6315 crore. 

The drug maker's margin for the last quarter of the financial year 2022-23 stood at 24.3 per cent. 

Dr Reddy's shares: Past performance 

DRL shares finished the June quarter with a gain of 11.6 per cent, in line with a 10.5 per cent rise in the benchmark Nifty index. 

As of July 25, Dr Reddy's shares grew 26.2 per cent in the past one year, outperforming a 17.7 per cent gain in the Nifty index. 

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