Most analysts have downgraded Dr Reddy’s Labs and slashed target price on dismal June quarter results dragged by US pricing issue. Shares of the Hyderabad-based company plunged over 10 percent intraday on Wednesday (stock lost over 4 percent yesterday). The drug major missed analysts' expectations on all counts with consolidated profit falling sharply by 76.3 percent year-on-year to Rs 153.5 crore, impacted largely by US business and weak operational performance. Revenue declined 14 percent to Rs 3222.5 crore in the quarter ended June 2016 from Rs 3,752.2 crore in same period last year. Decline in volume growth, particularly in the US market, loss of business in Venezuela, price erosion and delayed launches due to warning letter impacted its performance in April-June quarter. Its US business declined 20 percent and margins fell to 4 percent on annual basis while the management has already warned that there are more headwinds ahead with other businesses also underperforming.
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