DRL Dips 2% On Dismal Expectations

Mumbai, January 27: | Updated: Jan 28 2003, 05:30am hrs
Dr Reddys Laboratories (DRL) was downcast on Monday, continuing its recent downtrend, on the back of a few negative developments and expectations of unimpressive results.

On The Stock Exchange, Mumbai (BSE), the scrip of the domestic pharma major declined 1.8 per cent as it closed at Rs 900.90 as against its previous close at Rs 917.80. A total number of 77,236 shares of DRL changed hands on the counter today.

According to dealers, the market expects the companys third quarter results to turn out dismal.

Pharma analysts said DRL was expected to register a fall between 34-42 per cent in its bottomline on a rise of a mere 1-7 per cent in its topline.

A poor performance on the export front is the key reason for the drop in profit. Another reason is the lack of exclusivity to any products in the US, analysts say. Novartis had decided to discontinue further development of DRF 4158, its diabetes compound ( a drug licensed by DRL).

However, recently a US court ruled in the companys favour in respect of a patent infringement case relating to a blockbuster hypertension drug. Analysts say the ruling in favour of DRL was quite a positive development for the company as the drug has a huge market.

But they still feel that it is better to wait and watch, as the final approval for the drug is contingent upon the successful completion of ongoing discussions with US FDA.