Dr Reddy’s Q4 Preview: PAT may rise over 50% YoY on strong US sales

Pharma major Dr Reddy’s Laboratories is expected to post robust numbers in the fourth quarter ended March 2024, led by stable price erosion and improved US generic industry dynamics.

According to an average estimate of four brokerages, revenue from operations in the January-March 2023 period is seen growing up to 18% year-on-year (YoY).

Meanwhile, net profit after tax (PAT) is likely to surge up to 54% YoY.

Analysts estimate the US sales growth to be strong at around 32% YoY to $412 million with strong traction likely in the existing portfolio and niche launches.

In the recent third quarter, Dr Reddy’s posted an 11% growth in its consolidated net profit at Rs 1,379 crore, and revenue from operations increased 7% YoY to Rs 7,215 crore.

Here’s what to expect from Dr Reddy’s Q4

Kotak Equities

We expect North American base business (ex-Revlimid) sales to grow 5% quarter-on-quarter (QoQ) to $310 million, led by volume ramp-up of products such as gSuboxone, gKuvan, and gVascepa.

In our estimates, we factor in $115 million of gRevlimid sales in the US in 4QFY24 for DRRD, higher than $105 million in 3QFY24. Within the base business, we baked in $28 million in sales from the Mayne portfolio, in 4QFY24.

We expect DRRD’s domestic sales to grow by 2% YoY in 4QFY24. We expect 7% YoY growth in Europe and 19% YoY growth in Russia. We built some recovery in PSAI sales, factoring in an 8% QoQ growth. Overall, we expect DRRD’s sales to grow 21% YoY (+6% QoQ) in 4QFY24.

Nuvama

Revenue to grow 18% YoY with US revenue expected to be $429 million. gRevlimid contribution expected to be $140 million in Q4FY24 versus $135 million in Q3FY23 and $70 million in Q4FY23.

Domestic revenue to grow 13% YoY on an India base, adjusted for product divestment income of Rs 260 in Q4FY23. On the base, in Q4FY23, Russia and PSAI business to be soft in Q4FY24. EBITDA margins are expected to be 28.4%, 330bps YoY/40bps QoQ.

Motilal Oswal

Expect sales of Russia/other CIS countries to rise 11% YoY to Rs 8.3 billion led by new launches and favorable currency. India revenue to grow 9% YoY. Strong traction in Pain/Derma/Anti-Diabetic is expected to be offset by a double-digit decline in cardiac therapy.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)