Dr Reddy’s Laboratories shares fell 2.9 per cent in morning trade on Friday after its consolidated net profit declined by 85.6 per cent to Rs 74.6 crore for the March quarter on account of provisioning for outstanding receivables from the Venezuelan market. The company had reported Rs 518.8 crore net profit for the same quarter last fiscal.
At 10.49 am, Dr Reddy’s Laboratories shares were trading 1.74 per cent down at Rs 2922. The scrip opened at Rs 2920 and has touched a high and low of Rs 2937.95 and Rs 2887.80, respectively, in trade so far.
Deutsche Bank has cut its sales and EPS forecast for the company by about 3 per cent for FY17 and FY18, citing increased competition on the US business. Maintaing the ‘SELL’ rating, the brokerage as cut target price to Rs 2,676 from Rs 2,748.
“This (provisioning) is largely due to the rules in the Venezuelan market. We are not able to repatriate full amount from the market due to rules. We are getting some. We made provisioning of about Rs 430 crore during the quarter. That has impacted the net,” President, CFO and Global Head of HR Saumen Chakraborty said.
He also said the revenues have been impacted due to ruble’s depreciation against world currencies.
Dr Reddy’s Co-chairman and CEO G V Prasad said it has been a challenging quarter for the company.
With agency inputs