Moneycontrol » News » Business » Earnings Thu, Jul 19, 2012 at 10:20 Dr Reddy's Labs' Q1 PAT likely to grow 34% to Rs 353 cr Pharma major Dr Reddy's Labs (DRL) is going to declare its results for the April-June quarter today. Analysts on average expect the company to mirror last quarter's performance. Source: CNBC-TV18 COMMENTS (1) . SHARE . EMAIL . PRINT . A+
Pharma major Dr Reddy's Labs (DRL) is going to declare its results for the April-June quarter today. Analysts on average expect the company to mirror last quarter's performance. The profit after tax is likely to grow by 34% year-on-year and 3% quarter-on-quarter to Rs 353 crore in the first quarter of FY13, according to CNBC-TV18 estimates.
Revenues are seen going up by 33% YoY to Rs 2,632 crore during the quarter, but QoQ it may be seen a decline.
EBITDA is expected to be Rs 539 crore during the quarter as against adjusted EBITDA of Rs 433.7 crore in a year ago period.
In the first quarter of previous financial year, company's reported EBITDA stood at Rs 539 crore as against Rs 279 crore in corresponding quarter of last fiscal, with operating profit margin of 20.5% versus 14.1% during same quarters.
In Q1FY12, the company took a one time charge of Rs 13.6 crore on Voluntary Retirement Scheme; therefore the adjusted EBITDA reported by the company is Rs 433.7 crore and margin of 22%.
So operating profit margin is likely to be at 20.5% in the quarter ended June 2012 as against adjusted margin of 22% in a year ago period.
US and pharmaceutical services & active ingredients (PSAI) are expected to be strong contributors in FY13. Therefore watch out for the German markets. Earlier the management guidance was that pricing pressure was high due to tenderization of German markets. Margins are expected to be in the 20% plus range.
Investors should watch out for
Analysts expect a similar performance to Q4FY12 where the US & ROW markets were key drivers.
QoQ similarity will be the most prominent in the US markets. Analysts expect Geoden generic to contribute like Q4.
In the fourth quarter of FY12, US region's revenues grew by 47.5% to Rs 873 crore.
Ziprasidone of Geoden was launched in the first week of March (which is worth USD 1.35 billion anti-psychotic drug) along with Seroquel generic that both contributed USD 33 million in the March quarter.
Other new launches included Boniva, Plavix & Requib XL generic, but there was no material impact.
Analysts on an average expect Russia/CIS (20% growth in previous quarter) & India (15% on a low base) to continue with the same trajectory as previous quarter. In Q4FY12, Russia/CIS region's sales grew by 23% to Rs 290 crore and India's 16% to Rs 320 crore.
In Q4, India formulations business was expected to show better performance from FY13 (FY12 growth was just 11%). Management has guided that it expects to be record 14-15% growth for this business
Investors should watch out for any red flags in Germany: Management had mentioned that they expect pricing pressure to continue in the tender based German market.
Germany (revenues) for FY12 fell 15% in local currency due to continued tenderization of the German market - and in Q4, company took a goodwill write-off of Rs 104 crore.
PSAI segment is expected to continue with 30% growth. In the March quarter, PSAI grew by 35% YoY to Rs 750 crore.
ACL Price at posting:
50.0¢ Sentiment: LT Buy Disclosure: Held
(20min delay)