Durg maker Dr. Reddy's Laboratories is likely to report healthy double-digit growth in sales in the second quarter, mainly driven by strong domestic and US businesses. However, the bottom line is seen declining in the reporting period.Net profit for the July-September 2024 period may fall 3% year-on-year, according to an average estimate of four brokerages. Meanwhile, sales are likely to grow 13% year-on-year, the estimates revealed.Analysts are building US revenue at $419 million, driven by strong gRevlimid contribution. The India business may rise 19% YoY driven by organic 11% YoY growth and Rs 100 crore contribution of the vaccine business.Here's what to expect from Dr Reddy's Q2:Kotak EquitiesWe expect the North American base business (ex-gRevlimid) sales to decline 2% QoQ to $330 million driven by flat volumes across most molecules. In our estimates, we factor in $130 million of gRevlimid sales in the US in 2QFY25 for DRRD, higher than $125 million in 1QFY25.We bake in $29 million sales from the Mayne portfolio, in 2QFY25. DRRD's domestic sales are expected to grow by 14% YoY in 2QFY25, led by 8% YoY growth in its organic business, as well as, contributions from the in-licencing deals with Sanofi and Bayer. We expect 6% YoY and 2% YoY growth in Europe and Russia, respectively.For ROW and PSAI segments, we factor in 12% and 16% YoY sales growth, respectively. Overall, we expect DRRD's sales to grow 14% YoY (+2% QoQ) in 2QFY25.Prabhudas LilladherProfitability ex-gRevlimid will likely remain muted. The commentary on US base business and margin trends are key monitorable.NuvamaWe expect Dr. Reddy’s revenue/EBITDA to grow by 10%/ 9% YoY with EBITDA margins at 28.8% for Q2FY25. We build US revenue at $419 million, driven by strong gRevlimid contribution. We expect the India business to grow 19% YoY, driven by organic 11% YoY growth and Rs 100 crore contribution of the vaccine business. EM/PSAI businesses are expected to grow 5%/8% YoY.The US sales are likely to grow 15.8% YoY to $440 million, led by market share gains, Mayne portfolio integration, and volume offtake in a differentiated portfolio. Expect Russia/other CIS countries’ sales to decline 4% YoY to Rs 770 crore due to unfavourable currency.Motilal OswalIndia revenue is likely to grow 15% YoY due to strong traction in Pain/Derma, new launches, and in-licencing opportunities. Update on the approval of Rituximab in the US, filing of Denosumab and Abatacept, and launches in consumer healthcare are key monitorables.Updates on filings, approvals, and launches in China are critical too.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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