Dr. Reddy's Q3 Results Review - Strong Performance Driven By gRevlimid: Dolat Capital

Dolat Capital Report

Dr. Reddy's Laboratories Ltd.'s earnings were above our estimates on higher than expected gRevlimid sales during the quarter. Revenue grew at 27.3%/7.4% YoY/QoQ in Q3 to Rs 67.7 billion.

Ebitda stood at Rs 20.5 billion grew 71%/9% YoY/QoQ and Ebitda margin at 30.4% expanded by 778 basis points/33 bps YoY/QoQ.

Dr. Reddy's profit after tax at Rs 12.5 billion grew 75%/12% YoY/QoQ.

Excluding Revlimid, base business sales was above our estimates on back of higher than expected growth in India/Russia business while base business margin was slightly lower than estimated.

We upgrade our earnings per share estimates by 17.5% in FY23E building higher gRevlimid sales and downgrading EPS estimates by 1.5%/4.2% in FY24E/FY25E assuming lower than expected base margin.

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