Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

Dr. Reddy's Laboratories / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/dr-reddy-s-laboratories-ltd" target="_blank" data-smartkarma-citation="entities:16406:1" rel="noopener">Dr. Reddy's Laboratories (DRRD IN)</a> reported strong Q2FY23 results, with revenue growing 9% y/y, mainly driven by North America business due to launch of gRevlimid in the US market.</li>
<li>GRevlimid is not a one-off opportunity and will contribute meaningfully over the next few quarters as well. Price erosion in the base business continues to be within normal range.</li>
<li>Adjusted for the covid product sales during Q2 FY22, and the brand divestment income in Q1 FY23, Indian business has grown in mid-teens year-over-year and mid-single digit sequentially.</li>
</ul>



Dr. Reddy's Laboratories (DRRD IN) reported strong Q2FY23 results, with revenue growing 9% y/y, mainly driven by North America business due to launch of gRevlimid in the US market.
GRevlimid is not a one-off opportunity and will contribute meaningfully over the next few quarters as well. Price erosion in the base business continues to be within normal range.
Adjusted for the covid product sales during Q2 FY22, and the brand divestment income in Q1 FY23, Indian business has grown in mid-teens year-over-year and mid-single digit sequentially.


Dr. Reddy's Laboratories (DRRD IN): New Launch Aided Q2 Result; Rich Pipeline Lends Visibility

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>The National Company Law Tribunal (NCLT) has ordered a meeting of <a href="https://www.smartkarma.com/entities/housing-development-finance" target="_blank" data-smartkarma-citation="entities:252:1" rel="noopener">HDFC Limited</a> and <a href="https://www.smartkarma.com/entities/hdfc-bank-ltd-4b6b7a92-9087-468d-9dbe-ab169e77f014" target="_blank" data-smartkarma-citation="entities:558:1" rel="noopener">HDFC Bank</a> shareholders on 25 November to consider and approve the proposed Scheme of Amalgamation.</li>
<li>
<a href="https://www.smartkarma.com/entities/pidilite-industries-ltd" target="_blank" data-smartkarma-citation="entities:20573:1" rel="noopener">Pidilite Industries (PIDI IN)</a> is a high probability ad hoc inclusion to the <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index (NIFTY INDEX)</a> with <a href="https://www.smartkarma.com/entities/tata-power-co-ltd" target="_blank" data-smartkarma-citation="entities:15618:1" rel="noopener">Tata Power (TPWR IN)</a> a lower probability inclusion candidate.</li>
<li>
<a href="https://www.smartkarma.com/entities/tata-motors-ltd" target="_blank" data-smartkarma-citation="entities:216:1" rel="noopener">Tata Motors Ltd (TTMT IN)</a> and <a href="https://www.smartkarma.com/entities/adani-enterprises-ltd" target="_blank" data-smartkarma-citation="entities:245:1" rel="noopener">Adani Enterprises (ADE IN)</a> could be added to the <a href="https://www.smartkarma.com/entities/s-p-bse-sensex-index" target="_blank" data-smartkarma-citation="entities:31494:1" rel="noopener">SENSEX INDEX</a> in December replacing <a href="https://www.smartkarma.com/entities/housing-development-finance" target="_blank" data-smartkarma-citation="entities:252:1" rel="noopener">HDFC Limited (HDFC IN)</a> and <a href="https://www.smartkarma.com/entities/dr-reddy-s-laboratories-ltd" target="_blank" data-smartkarma-citation="entities:16406:1" rel="noopener">Dr. Reddy's Laboratories (DRRD IN)</a>.</li>
</ul>


The National Company Law Tribunal (NCLT) has ordered a meeting of HDFC Limited and HDFC Bank shareholders on 25 November to consider and approve the proposed Scheme of Amalgamation.

Pidilite Industries (PIDI IN) is a high probability ad hoc inclusion to the NIFTY Index (NIFTY INDEX) with Tata Power (TPWR IN) a lower probability inclusion candidate.

Tata Motors Ltd (TTMT IN) and Adani Enterprises (ADE IN) could be added to the SENSEX INDEX in December replacing HDFC Limited (HDFC IN) and Dr. Reddy's Laboratories (DRRD IN).


HDFC/HDFCB Merger in the Home Stretch: Potential Changes to NIFTY50, NIFTY100 & SENSEX Indices

Index Rebalance

Tata Motors Passenger Vehicles / Index Rebalance

<ul>
<li>AIPL has commenced a market consultation on amending the index universe to only include stocks that are a part of the Futures &amp; Options (F&amp;O) segment of the market.</li>
<li>This is likely driven by a bunch of Adani-group companies that are at the cusp of index inclusion and are not a part of the F&amp;O market.</li>
<li>Post implementation of the change, <a href="https://www.smartkarma.com/entities/tata-motors-ltd" target="_blank" data-smartkarma-citation="entities:216:1" rel="noopener">Tata Motors Ltd (TTMT IN)</a> is a likely inclusion to the index in December, though that depends on <a href="https://www.smartkarma.com/entities/dr-reddy-s-laboratories-ltd" target="_blank" data-smartkarma-citation="entities:16406:1" rel="noopener">Dr. Reddy's Laboratories (DRRD IN)</a> being deleted.</li>
</ul>


AIPL has commenced a market consultation on amending the index universe to only include stocks that are a part of the Futures &amp; Options (F&amp;O) segment of the market.
This is likely driven by a bunch of Adani-group companies that are at the cusp of index inclusion and are not a part of the F&amp;O market.
Post implementation of the change, Tata Motors Ltd (TTMT IN) is a likely inclusion to the index in December, though that depends on Dr. Reddy's Laboratories (DRRD IN) being deleted.


SENSEX Index Rebalance Preview: Market Consultation on Derivative Linkage & Impact

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lupin-ltd" target="_blank" data-smartkarma-citation="entities:17910:1" rel="noopener">Lupin Ltd (LPC IN)</a> reported muted Q1FY23 performance, with revenue declining 15% y/y and 7% q/q to INR36 billion. Revenue from North America is down 24% y/y and 29% q/q.</li>
<li>Price erosion in the U.S. coupled with shelf stock adjustment on the higher trade inventory are creating a dent to the quarterly numbers.</li>
<li>We would like to see a sustainable revival in the company’s North America revenue performance and margin improvement, before taking any position in the stock.</li>
</ul>



Lupin Ltd (LPC IN) reported muted Q1FY23 performance, with revenue declining 15% y/y and 7% q/q to INR36 billion. Revenue from North America is down 24% y/y and 29% q/q.
Price erosion in the U.S. coupled with shelf stock adjustment on the higher trade inventory are creating a dent to the quarterly numbers.
We would like to see a sustainable revival in the company’s North America revenue performance and margin improvement, before taking any position in the stock.


Lupin Ltd (LPC IN): Muted Q1FY23 Results as The US Sales Dipped Significantly

<ul>
<li>
<a href="https://www.smartkarma.com/entities/dr-reddy-s-laboratories-ltd" target="_blank" data-smartkarma-citation="entities:16406:1" rel="noopener">Dr. Reddy's Laboratories (DRRD IN)</a> reported Q1FY23 results, with revenue growing 6% and 108% y/y, mainly driven by a 26% y/y growth in India business.</li>
<li>Despite price erosion and increasing competition in some of the key products, North America revenue grew 2% y/y, driven by launch of new products and favorable forex rates.</li>
<li>Bottom line got benefitted from one-off items including settlement income and non-core brand divestment proceeds. Net profit surged 108% y/y.</li>
</ul>



Dr. Reddy's Laboratories (DRRD IN) reported Q1FY23 results, with revenue growing 6% and 108% y/y, mainly driven by a 26% y/y growth in India business.
Despite price erosion and increasing competition in some of the key products, North America revenue grew 2% y/y, driven by launch of new products and favorable forex rates.
Bottom line got benefitted from one-off items including settlement income and non-core brand divestment proceeds. Net profit surged 108% y/y.


Dr. Reddy's Laboratories (DRRD IN): India Business Still the Brightest Spot; Slow Recovery in the US

India

Dr. Reddy's Laboratories is an Indian multinational pharmaceutical company that researches, develops, manufactures, and markets a wide array of pharmaceutical products and services. The company produces over 190 medications, 60 active pharmaceutical ingredients, diagnostic kits, critical care, and biotechnology products. It operates globally across multiple regions, offering generic drugs, active pharmaceutical ingredients (APIs), differentiated formulations, biosimilars, and proprietary products. The company was founded in 1984 and is headquartered in Hyderabad, Telangana, India.

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Dr. Reddy's Laboratories (DRRD IN)