Dr. Reddy's Laboratories Ltd. (RDY): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
We are initiating coverage on Dr. Reddy's with an Outperform recommendation. The company's third quarter fiscal 2014 results were strong with both earnings and revenues beating expectations. While earnings of $0.59 per American Depositary Share
ADS
were above the year-ago earnings of $0.36 per ADS, revenues grew 23% from the year-ago period. We are encouraged by the company's strong generics portfolio and its geographic reach. Following the release of third quarter results, estimates have been increasing. The company has a strong ANDA pipeline and is also targeting the lucrative biosimilars market. The company is also focusing on emerging markets and OTC products.


Overview:

India based Dr. Reddy's Laboratories Ltd. is an integrated global pharmaceutical company engaged in providing affordable and innovative medicines since 1984.

The company markets its products in countries like the U.S., U.K., Germany, India, Russia, Venezuela, Romania and South Africa. Dr. Reddy's operates through three segments:

Global Generics This segment includes branded and unbranded prescription drugs along with over the counter (OTC) drugs.

Pharmaceutical Services & Active Ingredients (PSAI) This segment is composed of active pharmaceutical ingredients API and custom pharmaceutical services.

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Proprietary Products and Others This segment involves the new chemical entities, differentiated formulations business and a dermatology specialty business.

Dr. Reddy's reported fiscal year 2013 (ending Mar 31, 2013) revenues of $2.1 billion (up 20%). Global Generics segment revenues were up 17.5% to $1.5 billion. PSAI revenues climbed 28.8% to $563 million while Proprietary Products and Others segment revenues climbed 12.2% to $55 million during the year.

2013 Revenue Mix 2013 Geographical Mix


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