Dr.Reddy's slumps on Russian worries

Dr.Reddy’s Labs was a prominent loser on the bourses yesterday and today too, it continues with the falling trend. The stock price is down currently almost 2% at Rs.3085 after opening at Rs.3117. It hit an intra day at Rs.3060.

The market is nervous about the impact of the falling rouble and hike in interest rate by Russia as the company’s 17% global generic revenue in current Q2 came from Russia. In fact in Q2FY15, the falling rouble is what pushed down the company’s revenue from Russia down by 11%.

The company has stated in some TV interviews that it is too early to gauge the impact of the falling rouble as it feels that it could also benefit from the falling rupee. Also the company has stated that this could affect revenue if currency volatility continues, effect of which could be felt only in Q4 and not Q3.