Dr. Reddy's Earnings: Growth Still Strong, but Sales in America Weak From Price, Competition

No-moat Dr. Reddy’s reported mixed third-quarter earnings. Revenue was up 15.9% year over year thanks to strong performance across all business units, but its EBIT margin of 22.4% slipped 150 basis points. Operating expenses incurred from ramping up the consumer health business and higher research and development costs weighed down the bottom line. We maintained our fair value estimate of $14 per share after making minor adjustments to our near-term estimates, and we see shares trading near our valuation.