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Result Update


Dr. Reddy's Laboratories - RU3QFY2013
Dr. Reddy’s Laboratories (DRL) reported more or less just-in 3QFY2013 top-line and bottom-line performance. The company’s net sales increased by 3.5% yoy    (23%  adjusted  for  the  base  effect).  The  growth  came  in  on  back  of  24%  yoy (adjusted) in the US and Emerging Markets. On the EBIT margins came in at 15.0% V/s expected 15.8%. Consequently the net profit came in at `363cr, a dip of 29.1%, mostly in line with expectations of `339cr. DRL reported net sales of `2,865cr for 3QFY2013, registering 23.0% yoy growth, which was a tad lower than our estimate of `2,700cr. The U.S. and Emerging markets grew by 24% yoy (adjusted) were the key growth drivers for the company. The domestic market reported a strong growth of 12.0% yoy. On the positive side the PSAI segment posted a robust growth of 28.0% yoy during the quarter. The company’s EBIT margin came in at 15.0% V/s expected 15.8% and contracting by 11.7%, leading to a dip of 29.1% to `363cr during the quarter. DRL has reinforced its earlier revenue guidance of US$2.7bn by FY2013E with RoCE of 25%. We expect net sales to report a 9.8% CAGR to  `11,662cr and adjusted EPS to record a 2.3% CAGR to  `92.9 over FY2012-14E. Source: AngelBroking

GSK Consumer - RU4QCY2012
For 4QCY2012 GlaxoSmithkline Consumer Healthcare (GSK Consumer) posted a 17.9% yoy growth in net profit to `70cr, aided by a 161bp yoy improvement in gross margin and a 46.6% yoy increase in auxiliary income. For 4QCY2012 GSK Consumer posted a 17.8% yoy growth in net sales, aided by an  8% volume growth. The top-line growth was reasonably strong despite lower offtake by the canteen stores department (CSD). The company’s sales volume has been impacted by low CSD offtake since the beginning of CY2012. Better pricing resulted in a 161bp yoy increase in gross margin, despite the increase in cost of raw materials such as wheat, sugar etc. However, OPM was down by 305bp yoy to 7.2%, due to the steep 37.1% yoy increase in other expenses to `206cr. On a positive note, the company posted a 46.6% yoy increase in auxiliary income to  `25cr. The effective tax rate too was down by 658bp yoy resulting in a 17.9% yoy increase in net profit to `70cr. We expect the company’s malted food drinks (MFD) division to continue to post double digit growth, aided by the company’s efforts to strengthen its distribution network. The stock has run up steeply post the open offer announcement by the promoters. At  the current market price, the stock is trading at 31.2x CY2013E EPS of `123. Source: AngelBroking


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