Against a previous close of Rs 6,514.15 apiece, Dr Reddys Laboratories Ltd shares opened at Rs 1,328.90 apiece on Monday, down 79.59 per cent, surprising a few investors. The fall in the shares of the pharma major was due to the stock getting split from face value of Rs 5 each into shares with face value of Re 1 each.
In a stock split, already owned shares are split into shares with smaller face values in a bid to increase liquidity on the counter. It is possible that trading apps of certain brokerages might be showing the unadjusted price for Dr Reddy's Labs and, thus, suggesting an 80 per cent plunge on the counter. Adjusted of stock split, Dr Reddy's shares were later trading at Rs 1,295 on BSE, down 0.60 per cent.
Ahead of its quarterly results on November 5, JM Financial in a preview note said the profitability for DRL excluding Revlimid may remain muted. Commentary on US base business and margin trend will be key monitorables, it said.
The brokerage expects Dr Reddy's Labs to report a 4.9 per cent YoY fall in net profit at Rs 1,407.30 crore compared with Rs 1,480 crore in the same quarter last year. It sees sales for DRL rising 13.8 per cent YoY to Rs 7,831.30 crore from Rs 6,880.20 crore YoY. Ebitda is seen rising 6.4 per cent to Rs 2,118 crore but Ebitda margin is seen falling 189 basis points to 27.1 per cent from 28.9 per cent YoY.