Dr.Reddy’s gets a bitter taste

Over the last three sessions, Dr.Reddy’s Labs has losing and has fallen 9% during this time; today it is the top loser since morning, going down 7.5% to Rs.2544.

The market is not too happy with the company’s subdued performance. It posted a 44% (YoY) decline in consolidated net profit at Rs.434 crore. This was on a 14% rise in revenue at Rs.402 crore. And the revenue does not include Rs.181 crore it received for the sale of its US rights for three dermatology brands.

The market is unhappy with the sequential performance where US revenue rose by a small 1% while that from India fell 4%. It is disappointing because the subdued sales is despite some new product launches. For the market it is crucial that the US markets improve, especially offtake of Suboxone, which if it remains low, could impact sales in the current fiscal.