Market round-up – Profit booking pulls down Nifty nearly 1%

Profit booking in index heavyweights pulled down Nifty by 98 points (0.9%) to close at 11203.
Heavyweights like Reliance, HDFC Bank, TCS, Maruti and Infosys were major losers among the Nifty
stocks on account of profit booking. India equity fell on back of losses in Asian equities, as investors
awaited the outcome of the U.S. Federal Reserve’s policy meeting. Moreover, sentiment has been
dampened after Maruti announced disappointing Q1 results. Index heavyweight - Reliance
witnessed profit booking today after a long time. Reliance has declined 4% to close at Rs2097 as
traders were booking profit after a relentless buying in the last few months. On the other hand,
Pharma major Dr Reddy recorded smart rally after the company reported strong Q1 results.
Company reported impressive revenue growth in the European and North America. Dr Reddy gained
6% to close at Rs4302. Auto, Tech and Oil & Gas stocks witnessed profit booking. However, select
Metal, FMCG, Pharma and Cement stocks gained. India VIX advance 2% to close at 24. Among the
global markets, European market open on a positive note while US Dow Future is trading flat.

Auto major Maruti slipped 1.5% to close at Rs6185 after announced Q1 results. M&M, Hero
Motocorp, Bajaj Auto and Tata Motors declined 1-2% on account of profit booking. Tech stocks like
TCS, Infosys, HCL Tech and Tech Mahindra also declined between 1-2%. FMCG major Colgate gained
4% to close at Rs1448 after announced strong Q1 results. Banking stocks like ICICI Bank ended flat to
close at Rs351. Company is planning to launch QIP Rs15000cr over next few weeks according by
media report. IndusInd Bank gained 4% to close at Rs550 as the company reported impressive Q1
results. Metal stocks like Tata Steel gained 4% to close at Rs374 after the news that the proposal by
Tata Steel for the UK government to invest over 900 million pounds or $1.2 billion in the company is
part of the talks between the two sides. Pharma stocks like Sun Pharma, Divi’s Labs, Cipla, Cadila and
Strides gained between 2-3% each.

*Dr. Reddys Laboratories Ltd.* | *CMP* Rs. 4188 | *M Cap* Rs. 69614 Cr | *52 W H/L* 4190/2351

(Nirmal Bang Retail Research)

*Result is above expectations*

Revenue from Operations came at Rs. 4417.5 Cr (-0.3% QoQ, 14.9% YoY) vs expectation of Rs. 4204
Cr, QoQ Rs. 4431.9 Cr, YoY Rs. 3843.5 Cr

EBIDTA came at Rs. 1112.9 Cr (18.3% QoQ, 53.1% YoY) vs expectation of Rs. 904.9 Cr, QoQ Rs. 940.7
Cr, YoY Rs. 726.7 Cr

EBITDA Margin came at 25.2% vs expectation of 21.5%, QoQ 21.2%, YoY 18.9%

Adj. PAT came at Rs. 579.3 Cr vs expectation of Rs. 512.7 Cr, QoQ Rs. 763.6 Cr, YoY Rs. 662.8 Cr

Quarter EPS is Rs. 34.9

Share is trading at P/E of 27.4x FY21E EPS

#DRREDDY