Dear All,
Forwarding you the Result Update on Dr. Reddy’s Laboratories for 4QFY2011 with a Buy recommendation and a Target Price of `1,920 (12 months).
Dr. Reddy’s Laboratories (DRL) reported higher-than-expected 4QFY2011 results. Net sales increased by 22.8% yoy, led by 26.9% yoy and 31.3% yoy growth across the global generics and proprietary products businesses, respectively. Net profit doubled during the quarter, higher than our estimates, to `334cr on the back of better OPM, which came in at 16.5% (11.4%). However, adjusting for exceptional items like profit on sale of land, impact of negative goodwill and betapharm restructuring costs during 4QFY2011, net profit grew by 57.4% yoy to `307cr (`195cr). DRL has revised its FY2013 guidance of US$3bn on the top-line front to US$2.7bn, with RoCE to come in at 25%. We maintain our Buy recommendation on the stock with a revised target price of `1,920.
Good set of numbers: DRL reported net sales of `2,017cr (`1,642cr), growth of 22.8% yoy, which was higher than our estimates of `1,904cr. The US market reported strong growth of 67.6% yoy, led by the launch of fexofinadine pseudoephedrine during the quarter. Sales from Russia grew by 25.7% yoy. The domestic market reported single-digit growth of 4.9% yoy on account of price cuts taken in certain products.
Outlook and valuation: DRL has revised its earlier revenue guidance of US$3bn to US$2.7bn by FY2013E with a RoCE of 25%. We expect net sales to report a 13.3% CAGR to `9,584cr and adjusted EPS to record a 22.7% CAGR to `96.0 over FY2011–13E. We maintain our Buy recommendation on the stock with a revised target price of `1,920.
Kindly click on the following link to view the Report.
Dr. Reddy's Laboratories - RU4QFY2011
If you have any further queries, feel free to call us on 022 39357600, Extn: 6865 or mail us at advisory@angelbroking.com
With best regards,
Fundamental Advisory Desk
Angel Broking
Akruti Star,6th Floor, Road No.7,MIDC, Andheri (E),Mumbai – 93.
Call : (91) (022) 39357600 Ext. 6865
Website : www.angelbroking.com
Disclaimer: Ours is an advisory role. The final decision and consequences based on our information is solely yours. Moreover, in keeping with regulatory guidelines, we do not guarantee any returns on investments. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice.
No comments:
Post a Comment