Why did RDY's Q4 2024 EPS fall short of forecasts?

Dr. Reddy's Laboratories Ltd (RDY) experienced a shortfall in its Q4 2024 EPS due to several key factors: 1. **Revenue Shortfall**: Although the company reported a 17% year-over-year revenue growth, reaching USD 957 million, there was a shortfall in revenue compared to analysts' expectations of USD 861.68 million. This shortfall could contribute to the EPS falling short of forecasts. 2. **Cost Management**: The company's Gross Profit Margin increased by 92 basis points year-over-year, reaching 59.6%. However, it decreased by 81 basis points sequentially. This sequential decrease in gross margin could indicate challenges in cost management, which might have impacted the EPS. 3. **S&A Expenses**: The SG&A Expenses increased by 22% year-over-year and 1% sequentially, reaching INR 2,301 crore (USD 275 million). Higher S&A expenses can dilute the net profit, leading to a lower EPS. 4. **R&D Investments**: The R&D Spend increased by 33% year-over-year and 17% sequentially, reaching INR 727 crore (USD 87 million). Increased investments in R&D can be a sign of the company's commitment to innovation, but they also contribute to higher expenses that can impact EPS. In summary, the Q4 2024 EPS shortfall for Dr. Reddy's Laboratories Ltd can be attributed to a combination of revenue falling short of expectations, challenges in cost management, increased S&A expenses, and higher R&D investments.