Citi has reiterated its Sell rating on Dr. Reddy’s Laboratories with a target price of ₹1,100, citing a subdued Q3FY25 performance. Adjusted PAT missed expectations by around 10%, impacted by a pronounced decline in US sales due to erosion and market share losses in certain products. gRevlimid sales also saw a decline.
Positively, the consolidation of NRT, lower R&D spending, and reduced SG&A costs helped EBITDA remain flat on a QoQ basis. Citi’s commentary pointed to optimism on long-term growth drivers like GLP-1, but noted delays in Iron Sucrose, a product expected by the Street in the near term.
Q3FY25 Performance:
- Revenue: Up 15.9% YoY at ₹8,358.6 crore.
- Net Profit: Up 2.5% YoY at ₹1,413.3 crore.
- Margins: Declined to 27.5% versus 29.3% YoY.
