Dr. Reddy’s Q1 Review - India Drives Earnings Growth, While North America, PSAI Drags It Down: Motilal Oswal
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Motilal Oswal Report
Dr. Reddy’s Laboratories Ltd. delivered a miss on earnings in Q1 FY22, affected by
higher price erosion in North America sales,
the deferment of offtake by Dr. Reddy’s customer in the pharma services and active ingredients segments, and
quarterly lumpiness in the tender business in the Russia segment.
The company exhibited strong growth in domestic formulations, led by demand recovery, Covid-19 products, and the addition of Wockhardt’s DF business.
We reduce our earnings per share estimate by 4% each for FY22/FY23E, factoring in delays in the ramp-up of potential launches in the U.S. market and the commercial scale-up of the Sputnik vaccine, as well as increased opex toward marketing activity in DF.
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