InCred Equities - Dr Reddy's Laboratories Ltd

	Mar-23A	Mar-24A	Mar-25F	Mar-26F
Revenue (Rsm)	245,879	279,163	328,023	349,808
Operating EBITDA (Rsm)	63,873	78,384	90,927	87,117
Net Profit (Rsm)	45,067	55,683	60,216	58,358
Core EPS (Rs)	54.1	66.8	72.2	70.0
Core EPS Growth	45.0%	23.6%	8.1%	(3.1%)
FD Core P/E (x)	22.44	18.16	16.80	17.33
DPS (Rs)	70.0	40.0	40.0	40.0
Dividend Yield	5.77%	3.30%	3.30%	3.30%
EV/EBITDA (x)	14.97	12.05	10.97	11.13
P/FCFE (x)	12.71	14.45	57.09	8.72
Net Gearing	(21.5%)	(22.0%)	(2.7%)	(10.7%)
P/BV (x)	4.38	3.61	3.29	3.03
ROE	21.4%	21.8%	20.5%	18.2%
% Change In Core EPS Estimates
InCred Research/Consensus EPS (x)

(Rs mn)	Mar-23A	Mar-24A	Mar-25F	Mar-26F
Total Net Revenues	245,879	279,163	328,023	349,808
Gross Profit	139,343	163,606	196,740	203,532
Operating EBITDA	63,873	78,384	90,927	87,117
Depreciation And Amortisation	(12,636)	(14,855)	(17,773)	(18,273)
Operating EBIT	51,237	63,529	73,155	68,844
Financial Income/(Expense)	(1,428)	(1,711)	(2,400)	(2,000)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)	10,188	9,904	9,000	10,000
Profit Before Tax (pre-EI)	59,997	71,722	79,755	76,844
Exceptional Items
Pre-tax Profit	59,997	71,722	79,755	76,844
Taxation	(15,300)	(16,186)	(19,939)	(19,211)
Exceptional Income - post-tax
Profit After Tax	44,697	55,536	59,816	57,633
Minority Interests	370	147	400	725
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit	45,067	55,683	60,216	58,358
Recurring Net Profit	45,067	55,683	60,216	58,358
Fully Diluted Recurring Net Profit	45,067	55,683	60,216	58,358

(Rs mn)	Mar-23A	Mar-24A	Mar-25F	Mar-26F
EBITDA	63,873	78,384	90,927	87,117
Cash Flow from Invt. & Assoc.
Change In Working Capital	(7,845)	(20,182)	(31,570)	(4,009)
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow	66,704	68,394	68,358	93,108
Net Interest (Paid)/Received	(1,428)	(1,711)	(2,400)	(2,000)
Tax Paid	(6,401)	(21,250)	(26,139)	(26,486)
Cashflow From Operations	58,875	45,433	39,819	64,622
Capex	(11,241)	(15,339)	(11,500)	(12,000)
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments			(55,000)
Other Investing Cashflow	(7,543)	(11,032)
Cash Flow From Investing	40,091	19,062	(26,681)	52,622
Debt Raised/(repaid)	(19,382)	5,493	4,577	(1,321)
Proceeds From Issue Of Shares	368	805
Shares Repurchased
Dividends Paid	(4,979)	(6,648)	(33,305)	(33,305)
Preferred Dividends
Other Financing Cashflow	660	(102)	6,600	8,000
Cash Flow From Financing	(23,333)	(452)	(22,128)	(26,626)
Total Cash Generated	16,758	18,610	(48,809)	25,996
Free Cashflow To Equity	79,584	69,988	17,715	115,922
Free Cashflow To Firm	100,394	66,206	15,538	119,243

(Rs mn)	Mar-23A	Mar-24A	Mar-25F	Mar-26F
Total Cash And Equivalents	63,029	81,639	32,830	58,826
Total Debtors	72,485	80,298	95,127	101,444
Inventories	48,670	63,552	75,445	80,456
Total Other Current Assets	22,756	26,278	32,802	34,981
Total Current Assets	206,940	251,767	236,204	275,707
Fixed Assets	66,462	76,886	70,613	64,341
Total Investments	5,362	5,255	5,255	5,255
Intangible Assets	35,094	41,204	96,204	96,204
Total Other Non-Current Assets	7,996	12,406	12,406	12,406
Total Non-current Assets	114,914	135,751	184,478	178,206
Short-term Debt	12,194	14,030	14,030	14,030
Current Portion of Long-Term Debt
Total Creditors	26,444	30,919	29,290	32,614
Other Current Liabilities	47,207	51,090	54,396	60,569
Total Current Liabilities	85,845	96,039	97,715	107,213
Total Long-term Debt	1,278	5,990	10,567	9,246
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities	3,740	4,939	4,939	4,939
Total Non-current Liabilities	5,018	10,929	15,506	14,185
Total Provisions
Total Liabilities	90,863	106,968	113,221	121,398
Shareholders Equity	230,991	280,550	307,861	333,640
Minority Interests			(400)	(1,125)
Total Equity	230,991	280,550	307,461	332,515

	Mar-23A	Mar-24A	Mar-25F	Mar-26F
Revenue Growth	14.7%	13.5%	17.5%	6.6%
Operating EBITDA Growth	38.7%	22.7%	16.0%	(4.2%)
Operating EBITDA Margin	26.0%	28.1%	27.7%	24.9%
Net Cash Per Share (Rs)	59.46	73.93	9.88	42.65
BVPS (Rs)	277.13	336.59	369.36	400.29
Gross Interest Cover	35.88	37.13	30.48	34.42
Effective Tax Rate	25.5%	22.6%	25.0%	25.0%
Net Dividend Payout Ratio
Accounts Receivables Days	103.36	99.88	97.60	102.55
Inventory Days	170.54	177.23	193.22	194.51
Accounts Payables Days	89.11	90.59	83.70	77.23
ROIC (%)	21.3%	21.7%	18.3%	17.4%
ROCE (%)	21.9%	23.3%	23.1%	20.0%
Return On Average Assets	14.8%	16.0%	15.2%	13.5%

(91) 22 4161 1552 praful.bohra@incredresearch.com

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

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Market Data

Source: Bloomberg