Dr Reddy's shares down 9% sharp slump in Q1 profit

The shares of Dr Reddy's Laboratories fell 9.72% intraday on Wednesday after international rating agencies downgraded the stock.

The pharmaceutical company reported an 80% drop in its net profits in the April - June quarter at Rs 126.3 crore on the back of price erosion and a dip in US sales. Sales to Venezuela also took a hit due to the ongoing currency crisis in the country. In the year ago period, the parma major had posted a net profit of Rs 625.7 crore. 

On Wednesday, intraday, Dr Reddy's stock plunged 9,72% to Rs 2,999.85 a piece. However, at 1055 hours, it recovered slightly but was still 8.81% below the red line, shedding Rs 292.80 and trading at Rs 3,030.05 from previous day's close. 

Net sales were down 14% to Rs 3,234 crore, taking a huge hit from Venezuela its fourth largest market. Thanks to the restrictions imposed on the country from sending money out because of a forex shortage, Dr Reddy's did not make any sales there in the quarter. 

According to an NDTV report, Prabhudas Lilladher downgraded the stock, to "reduce" from "accumulate" and cut the target price to Rs 2,945. The brokerage said it believed that the fall in sales of key US generics were permanent in nature, the report said. 

Dr Reddy's stock was downgraded by Kotak Institutional Equities too. The brokerage changed its stance on the stock to "sell" cutting the target price to Rs 2,500. 

At the time, the BSE was trading in the green, up nearly 160 points at 28,136.02.