New Delhi: Dr. Reddy’s Laboratories slipped around 7% during the morning trade though the equity benchmark indices saw a sharp upsurge.
The drug major on Friday posted a 44% rise in consolidated profit after tax to ₹434.4 crore for the fourth quarter as against ₹302.2 crore in the third quarter of FY18.
Revenue for the fourth quarter was up by 14% at ₹4,016.60 crore against ₹3,534.90 crore in the same quarter last fiscal, the company had said.
On BSE, the scrip was trading at ₹2,550, down 198.10 points, or 7.21%, around 11:30 am. On NSE, the company was down 7.15% at ₹2,548.75.
Brokerage firm, Prabhudas Lilladher, on Monday, changed its view for the company after its fourth quarter results. It has revised the outlook to a hold rating with a target price of ₹2,997 on better visibility for Dr. Reddy's.
Motilal Oswal Financial Services has also changed its estimate for the company on Monday. “We tweak our FY20/21 EPS estimate by (+2%)/ (-5%) to factor in the one-time settlement income in FY20, delay in niche launches and increased costs," said a Motilal Oswal report. “While Dr. Reddy’s is progressing towards resolving regulatory issues, potential launches are yet to kick in. Also, valuation provides limited upside at current levels," the report added.
It has shifted its estimates to a neutral stance with a target price for the stock at ₹2,700.
The US sales for the company declined 4% to $213 million (year-on-year) during the fourth quarter. This was one of the drawbacks for the company. Also, regulatory delays affecting the US launches, delay in the clearance for pending FDA issues are one of the key risks for the company, according to brokerage firms.
Another brokerage firm, Elara Capital, however reiterated its view for the company with reduce rating and with target price of ₹2,759.