Reduction in bad debt provision swells Dr Reddy's net
Dr. Reddy's has reported a stupendous 125% growth in the first quarter net profit on the back of a meagre 10% growth in the topline. While the topline has been led by a 21% growth in domestic finished dosages and an 81% growth in finished dosage exports, the reasons for the increase in profits is the reduction in the provision of bad debts as compared to the first quarter last year.
Operating Profit (EBDIT)
Operating Profit Margin (%)
Profit before Tax
Profit after Tax/(Loss)
Net profit margin (%)
No. of Shares (m) (eoy)
Diluted no. of shares (m)
Diluted Earnings per share*
The provision was made on account of exports made to the CIS countries. In the first quarter of last year this provision amounted to Rs 162 m; this has declined by Rs 89 m in the first quarter of the current year. If one were to exclude this provision, the net profits have grown by 11% year on year.
Other income growth from Rs 3.9 m to Rs 16.46 m was responsible in part for the growth in the bottomline but the fact remains that it hardly amounts to less than 10% of the company's pre–tax profit.
The current stock price of Rs 1,080 implies an earning multiple of 36.4 times FY2001 annualised earnings
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