Dr.Reddy’s down in the red

Dr.Reddy’s Labs posted a dismal set of numbers for Q3FY17. Its net profit for the quarter slipped 19% (YoY) at Rs.470 crore on a 7% drop in total revenues at Rs.3706 crore.

EBITDA was also down, 13% at Rs.8793 crore while margins contracted to 23.7% from 25.5%.

The company’s generics business showed a 9% decline and revenue from North America and Venezuela dropped; the only silver lining – revenue from pharma services and active ingredients rose 6%.

Though the numbers are good sequentially, the market has chosen to look at the YoY numbers; plus the uncertainty over the upcoming situation in North America has caused an overreaction.

The stock was amongst the top losers on the BSE, currently down around 2% at Rs.3089 levels. Its 52-week low is at Rs.3689.