Dr Reddy's slips 3% post Q3 numbers, top Sensex loser

Shares of Dr Reddy’s slipped 3% as compared to 0.8% rise in Sensex after the drug major reported a consolidated net profit of Rs 470 crore in the December quarter, registering a 19% decline from Rs 579 crore in the same period a year ago.

Reacting to the numbers, the stock shed as much as 3% to Rs 3,050 on the BSE, and was the top Sensex loser. 

The company’s revenues for the quarter under review were down 7% to Rs 3,706.5 crore from Rs 3,967.9 crore in the corresponding quarter previous year.

However, on a sequential basis, the gross profit margin for the quarter rose to 59.1%, almost close to the levels in the year-ago period, from 56% in the second quarter.

Brokerage Emkay Global Financial Services said Q3 revenues were in line with estimates with margin surprise driven strong tailwinds from EM growth including benefit of strengthening currencies across multiple emerging markets.

“Strong earnings in Q3 anchors our FY17 earnings but FY17-19 EPS CAGR of 33% includes US revenues CAGR of 10%, which still has many uncertainties,” it said.

Emkay raised the rating on the stock to ‘hold’ with a revised target price of Rs 3,300 per share.