InCred Equities - Dr Reddy's Laboratories Ltd

	Mar-23A	Mar-24A	Mar-25F	Mar-26F
Revenue (Rsm)	245,879	279,163	325,559	349,031
Operating EBITDA (Rsm)	63,873	78,384	88,178	85,624
Net Profit (Rsm)	45,067	55,683	56,154	53,638
Core EPS (Rs)	54.1	66.8	67.4	64.4
Core EPS Growth	45.0%	23.6%	0.8%	(4.5%)
FD Core P/E (x)	21.27	17.21	17.07	17.87
DPS (Rs)	70.0	40.0	40.0	40.0
Dividend Yield	6.09%	3.48%	3.48%	3.48%
EV/EBITDA (x)	14.15	11.38	10.75	10.81
P/FCFE (x)	12.04	13.70	60.22	8.41
Net Gearing	(21.5%)	(22.0%)	(1.8%)	(8.4%)
P/BV (x)	4.15	3.42	3.16	2.96
ROE	21.4%	21.8%	19.2%	17.1%
% 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	325,559	349,031
Gross Profit	139,343	163,606	193,735	202,001
Operating EBITDA	63,873	78,384	88,178	85,624
Depreciation And Amortisation	(12,636)	(14,855)	(17,273)	(18,273)
Operating EBIT	51,237	63,529	70,905	67,351
Financial Income/(Expense)	(1,428)	(1,711)	(3,000)	(2,800)
Pretax Income/(Loss) from Assoc.
Non-Operating Income/(Expense)	10,188	9,904	7,500	6,000
Profit Before Tax (pre-EI)	59,997	71,722	75,405	70,551
Exceptional Items
Pre-tax Profit	59,997	71,722	75,405	70,551
Taxation	(15,300)	(16,186)	(18,851)	(17,638)
Exceptional Income - post-tax
Profit After Tax	44,697	55,536	56,554	52,913
Minority Interests	370	147	(400)	725
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit	45,067	55,683	56,154	53,638
Recurring Net Profit	45,067	55,683	56,154	53,638
Fully Diluted Recurring Net Profit	45,067	55,683	56,154	53,638

(Rs mn)	Mar-23A	Mar-24A	Mar-25F	Mar-26F
EBITDA	63,873	78,384	88,178	85,624
Cash Flow from Invt. & Assoc.
Change In Working Capital	(7,845)	(20,182)	(29,844)	(4,940)
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow	66,704	68,394	65,834	86,683
Net Interest (Paid)/Received	(1,428)	(1,711)	(3,000)	(2,800)
Tax Paid	(6,401)	(21,250)	(23,751)	(20,113)
Cashflow From Operations	58,875	45,433	39,083	63,771
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	(27,417)	51,771
Debt Raised/(repaid)	(19,382)	5,493	4,252	(1,611)
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)	4,500	3,200
Cash Flow From Financing	(23,333)	(452)	(24,553)	(31,715)
Total Cash Generated	16,758	18,610	(51,970)	20,055
Free Cashflow To Equity	79,584	69,988	15,917	113,931
Free Cashflow To Firm	100,394	66,206	14,665	118,342

(Rs mn)	Mar-23A	Mar-24A	Mar-25F	Mar-26F
Total Cash And Equivalents	63,029	81,639	29,669	49,724
Total Debtors	72,485	80,298	94,412	101,219
Inventories	48,670	63,552	74,879	80,277
Total Other Current Assets	22,756	26,278	32,556	34,903
Total Current Assets	206,940	251,767	231,515	266,123
Fixed Assets	66,462	76,886	71,113	64,841
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	184,978	178,706
Short-term Debt	12,194	14,030	14,030	14,030
Current Portion of Long-Term Debt
Total Creditors	26,444	30,919	29,359	32,724
Other Current Liabilities	47,207	51,090	54,524	60,772
Total Current Liabilities	85,845	96,039	97,913	107,526
Total Long-term Debt	1,278	5,990	10,242	8,631
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	15,181	13,570
Total Provisions
Total Liabilities	90,863	106,968	113,094	121,096
Shareholders Equity	230,991	280,550	302,999	324,058
Minority Interests			400	(325)
Total Equity	230,991	280,550	303,399	323,733

	Mar-23A	Mar-24A	Mar-25F	Mar-26F
Revenue Growth	14.7%	13.5%	16.6%	7.2%
Operating EBITDA Growth	38.7%	22.7%	12.5%	(2.9%)
Operating EBITDA Margin	26.0%	28.1%	27.1%	24.5%
Net Cash Per Share (Rs)	59.46	73.93	6.47	32.47
BVPS (Rs)	277.13	336.59	363.53	388.79
Gross Interest Cover	35.88	37.13	23.64	24.05
Effective Tax Rate	25.5%	22.6%	25.0%	25.0%
Net Dividend Payout Ratio
Accounts Receivables Days	103.36	99.88	97.94	102.29
Inventory Days	170.54	177.23	191.65	192.59
Accounts Payables Days	89.11	90.59	83.45	77.06
ROIC (%)	21.3%	21.7%	17.8%	17.0%
ROCE (%)	21.9%	23.3%	22.6%	20.0%
Return On Average Assets	14.8%	16.0%	14.6%	12.8%

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

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Market Data

Source: Bloomberg