Views on Dr Reddys 2QFY2016 Result: Angel Broking

Views of Ms. Sarabjit Kour Nangra (VP Research - Pharma, Angel Broking) on Dr Reddys 2QFY2016 Results:

"For 2QFY2016, the company posted sales in line while, the net profit grew higher than estimates. The company, posted an 11.2% growth in sales to end the period at INR 3989cr V/s INR 4000cr expected and INR 3588cr in 2QFY2015, mainly driven by global generics. Global generics (INR 3276.8cr), posted a growth of 15% YoY, while PSAI (INR 591.8cr) posted a dip of 7% YoY. In global generics, the key markets - USA, Europe, India and Emerging markets, posted a growth of 32%, 65%, 14% and -22% YoY.

On operating front, the EBIT margins came in at 22.4% V/s 18.7% expected V/s 17.3% in 2QFY2015, driven by the expansion in gross margins (285bps) and moderate growth in SG&A and R&D expenditure, which rose by 8.8% and 3.6% YoY respectively. Thus, the net profit came in at INR 722cr V/s INR 631cr expected and INR 574cr in 2QFY2015, a YoY growth of 25.7%. The stock has seen decent up move, making valuations, fair, thus we maintain our NEUTRAL stance on the stock."

Shares of DR.REDDY'S LABORATORIES LTD. was last trading in BSE at Rs.4107.5 as compared to the previous close of Rs. 4182.3. The total number of shares traded during the day was 16977 in over 2790 trades.

The stock hit an intraday high of Rs. 4192.8 and intraday low of 4080. The net turnover during the day was Rs. 69945201.

Source : Equity Bulls

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