InCred Equities - Dr Reddy's Laboratories Ltd

	Mar-24A	Mar-25A	Mar-26F	Mar-27F
Revenue (Rsm)	279,163	325,535	355,454	332,602
Operating EBITDA (Rsm)	78,384	84,544	92,086	80,432
Net Profit (Rsm)	55,683	56,545	58,860	48,870
Core EPS (Rs)	66.8	67.8	70.6	58.6
Core EPS Growth	23.6%	1.5%	4.1%	(17.0%)
FD Core P/E (x)	19.71	19.41	18.65	22.46
DPS (Rs)	40.0	8.0	8.0	8.0
Dividend Yield	3.04%	0.61%	0.61%	0.61%
EV/EBITDA (x)	13.15	12.71	11.44	12.37
P/FCFE (x)	15.68	36.53	15.51	8.28
Net Gearing	(22.0%)	(3.5%)	(8.1%)	(20.7%)
P/BV (x)	3.91	3.29	2.84	2.56
ROE	21.8%	18.4%	16.4%	12.0%
% Change In Core EPS Estimates
InCred Research/Consensus EPS (x)

(Rs mn)	Mar-24A	Mar-25A	Mar-26F	Mar-27F
Total Net Revenues	279,163	325,535	355,454	332,602
Gross Profit	163,606	190,428	202,744	180,977
Operating EBITDA	78,384	84,544	92,086	80,432
Depreciation And Amortisation	(14,855)	(17,059)	(18,273)	(20,273)
Operating EBIT	63,529	67,485	73,813	60,160
Financial Income/(Expense)	(1,711)	(2,829)	(2,300)	(2,000)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)	9,904	11,911	6,000	6,000
Profit Before Tax (pre-EI)	71,722	76,567	77,513	64,160
Exceptional Items
Pre-tax Profit	71,722	76,567	77,513	64,160
Taxation	(16,186)	(19,538)	(19,378)	(16,040)
Exceptional Income - post-tax
Profit After Tax	55,536	57,029	58,135	48,120
Minority Interests	147	(484)	725	750
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit	55,683	56,545	58,860	48,870
Recurring Net Profit	55,683	56,545	58,860	48,870
Fully Diluted Recurring Net Profit	55,683	56,545	58,860	48,870

(Rs mn)	Mar-24A	Mar-25A	Mar-26F	Mar-27F
EBITDA	78,384	84,544	92,086	80,432
Cash Flow from Invt. & Assoc.
Change In Working Capital	(20,182)	(29,989)	(25,541)	10,374
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow	68,394	66,683	72,545	96,807
Net Interest (Paid)/Received	(1,711)	(2,829)	(2,300)	(2,000)
Tax Paid	(21,250)	(17,426)	(22,353)	(19,290)
Cashflow From Operations	45,433	46,428	47,892	75,517
Capex	(15,339)	(26,992)	(25,000)	(15,000)
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments		(53,413)
Other Investing Cashflow	(11,032)	(6,894)
Cash Flow From Investing	19,062	(40,871)	22,892	60,517
Debt Raised/(repaid)	5,493	24,490	(42)	(3,566)
Proceeds From Issue Of Shares	805	(1,196)
Shares Repurchased
Dividends Paid	(6,648)	(6,662)	(6,661)	(6,661)
Preferred Dividends
Other Financing Cashflow	(102)	1,065	3,700	4,000
Cash Flow From Financing	(452)	17,697	(3,003)	(6,227)
Total Cash Generated	18,610	(23,174)	19,889	54,289
Free Cashflow To Equity	69,988	30,047	70,741	132,467
Free Cashflow To Firm	66,206	8,386	73,083	138,034

(Rs mn)	Mar-24A	Mar-25A	Mar-26F	Mar-27F
Total Cash And Equivalents	81,639	58,465	78,354	132,643
Total Debtors	80,298	90,420	103,082	96,455
Inventories	63,552	71,085	81,754	76,498
Total Other Current Assets	26,278	30,142	35,545	33,260
Total Current Assets	251,767	250,112	298,735	338,856
Fixed Assets	76,886	97,761	104,488	99,216
Total Investments	5,255	15,202	15,202	15,202
Intangible Assets	41,204	108,613	108,613	108,613
Total Other Non-Current Assets	12,406	21,301	21,301	21,301
Total Non-current Assets	135,751	242,877	249,604	244,332
Short-term Debt	14,030	38,902	38,902	38,902
Current Portion of Long-Term Debt
Total Creditors	30,919	35,523	33,139	31,811
Other Current Liabilities	51,090	55,967	61,544	59,078
Total Current Liabilities	96,039	130,392	133,586	129,792
Total Long-term Debt	5,990	7,864	7,822	4,255
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities	4,939	17,567	17,567	17,567
Total Non-current Liabilities	10,929	25,431	25,389	21,822
Total Provisions
Total Liabilities	106,968	155,823	158,974	151,614
Shareholders Equity	280,550	333,388	386,312	429,271
Minority Interests		3,778	3,053	2,303
Total Equity	280,550	337,166	389,365	431,574

	Mar-24A	Mar-25A	Mar-26F	Mar-27F
Revenue Growth	13.5%	16.6%	9.2%	(6.4%)
Operating EBITDA Growth	22.7%	7.9%	8.9%	(12.7%)
Operating EBITDA Margin	28.1%	26.0%	25.9%	24.2%
Net Cash Per Share (Rs)	73.93	14.04	37.95	107.36
BVPS (Rs)	336.59	399.99	463.48	515.02
Gross Interest Cover	37.13	23.85	32.09	30.08
Effective Tax Rate	22.6%	25.5%	25.0%	25.0%
Net Dividend Payout Ratio
Accounts Receivables Days	99.88	95.71	99.35	109.49
Inventory Days	177.23	181.87	182.65	190.48
Accounts Payables Days	90.59	89.75	82.06	78.18
ROIC (%)	21.7%	15.4%	15.3%	13.1%
ROCE (%)	23.3%	19.7%	18.0%	13.2%
Return On Average Assets	16.0%	13.4%	11.5%	8.8%

(91) 22 4161 1566 yogesh.soni@incredresearch.com

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Market Data

Source: Bloomberg