Dr Reddys Labs Q4 results miss estimates, stock slips nearly 5%; Should you buy, sell or hold?
Dr Reddys Labs share price: Dr Reddys Laboratories reported a 36 per cent increase in its consolidated profit after tax at Rs 1,307 crore for the quarter that ended March 2024, aided by robust sales in the US market.
Dr Reddy's Labs share price: Shares of Dr Reddy's Laboratories slipped as much as 5 per cent in the early trade on Wednesday (May 8) and touched the day's low at Rs 5,952.1 apiece. The decline in the stock can be attributed to the pharmaceutical company missing its Q4 result estimates.
At around 9:40 a.m., shares of Dr Reddy's Labs were down 3.8 per cent or Rs 237.95 at Rs 6021.20 apiece. The market capitalisation of the company at around the same time stood at Rs 1,00,386.53 crore.
Dr Reddy's Laboratories reported a 36 per cent increase in its consolidated profit after tax at Rs 1,307 crore for the quarter that ended March 2024, aided by robust sales in the US market. Zee Business Research had estimated the profit after tax (PAT) at Rs 1,378 crore.
The Hyderabad-based drug major had reported a PAT of Rs 959 crore in the January-March quarter of 2022-23 fiscal.
Further, the company's revenue increased to Rs 7,083 crore in the period under review from Rs 6,297 crore in the fourth quarter of FY23. The revenue for the fourth quarter ended on March 31, 2024, was estimated at Rs 7,359 crore.
The company said its FY24 revenues in the domestic market stood at Rs 46.4 billion, a decline of 5 per cent as against FY23.
Management commentary
"Our growth and profitability in FY2024 has been driven by our performance in the US. We have also made significant progress on future growth drivers through licensing, collaboration and pipeline building," Dr Reddy's Co-Chairman and Managing Director GV Prasad said.
The company saw its revenue grow by 28 per cent in the North American market at Rs 129.9 billion in FY24.
"The growth was largely on account of increase in base business volumes, integration of Mayne portfolio, forex gains partly offset by price erosion," the company said.
Dr Reddy's Laboratories dividend
Dr Reddy's board, which met on Tuesday, recommended a final dividend of Rs 40 per share of Rs 5 each for the financial year 2023-24.
Should you buy, sell, or hold?
Brokerages had mixed views on Dr Reddy's Laboratories after the company posted Q4 results.
| Dr Reddy's Laboratories | |||
| Brokerage | Rating | New Target (Rs) | Old Target (Rs) |
| Jefefries | Underperform | 5010 | 5040 |
| JP Morgan | Underweight | 5170 | 5190 |
| CLSA | Reduce | 6080 | -- |
| Goldman Sachs | Neutral | 5950 | 5700 |
| Nomura | Neutral | 6499 | -- |
| Macquarie | Outperform | 6400 | -- |
| Citi | Sell | 5200 | -- |
| HSBC | Hold | 6690 | -- |
Source: Zee Business Research
Dr Reddy's Laboratories share price: Past performance
In a year, shares of Dr Reddy's Laboratories have given a return of 27 per cent against Nifty50's rise of over 22 per cent.
(With inputs from agencies.)
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