Dr. Reddy’s Laboratories Ltd. (BSE: 500124 | NSE: DRREDDY |
NYSE: RDY | NSEIFSC: DRREDDY) today announced its consolidated
financial results for the quarter ended June 30, 2024. The
information mentioned in this release is based on consolidated
financial statements under International Financial Reporting
Standards (IFRS).
Q1FY25
Revenues
₹ 76,727 Mn
[Up: 14% YoY; 8% QoQ]
Gross Margin 60.4%
[Q1FY24: 58.7%; Q4FY24: 58.6%]
SG&A Expenses
₹ 22,691 Mn
[Up: 28% YoY; 11% QoQ]
R&D Expenses
₹ 6,193 Mn
[8.1% of Revenues]
EBITDA
₹ 21,599 Mn
[28.2% of Revenues]
Profit before Tax
₹ 18,821 Mn
[Up: 2% YoY; 18% QoQ]
Profit after Tax
₹ 13,920 Mn
[Down: 1% YoY; Up: 7% QoQ]
Commenting on the results, Co-Chairman & MD, G V Prasad
said: “We had a good start to the new fiscal year and our growth
& profitability was mainly driven by our generics business. We
continue to strengthen our core businesses and have made strategic
investments in biologics, consumer healthcare and innovation to
drive patient impact and value creation.”
All amounts in millions, except EPS
All US dollar amounts based on
convenience translation rate of 1 USD = ₹ 83.33
Dr. Reddy’s Laboratories Limited & Subsidiaries
Revenue Mix by Segment for the
quarter
Particulars
Q1FY25
Q1FY24
YoY Gr %
Q4FY24
QoQ Gr%
(₹)
(₹)
(₹)
Global Generics
68,858
60,083
15
61,191
13%
North America
38,462
32,002
20
32,626
18%
Europe
5,265
5,047
4
5,208
1%
India
13,252
11,482
15
11,265
18%
Emerging Markets
11,878
11,552
3
12,091
(2%)
Pharmaceutical Services and Active
Ingredients (PSAI)
7,657
6,709
14
8,219
(7%)
Others
212
592
(64)
1,420
(85%)
Total
76,727
67,384
14
70,830
8%
Consolidated Income Statement for
the quarter
Particulars
Q1FY25
Q1FY24
YoY Gr %
Q4FY24
QoQ Gr%
($)
(₹)
($)
(₹)
($)
(₹)
Revenues
921
76,727
809
67,384
14
850
70,830
8
Cost of Revenues
365
30,383
334
27,831
9
352
29,347
4
Gross Profit
556
46,344
475
39,553
17
498
41,483
12
% of Revenues
60.4%
58.7%
58.6%
Operating Expenses
Selling, General & Administrative
Expenses
272
22,691
212
17,702
28
246
20,476
11
% of Revenues
29.6%
26.3%
28.9%
Research & Development Expenses
74
6,193
60
4,984
24
83
6,877
(10)
% of Revenues
8.1%
7.4%
9.7%
Impairment of Non-Current Assets, net
0
5
0
11
(55)
(2)
(173)
(103)
Other Operating (Income)/Expense
(6)
(470)
(9)
(780)
(40)
(8)
(656)
(28)
Results from Operating
Activities
215
17,925
212
17,636
2
180
14,959
20
Finance (Income)/Expense, net
(10)
(837)
(9)
(784)
7
(12)
(1022)
(18)
Share of Profit of Equity Accounted
Investees, net of tax
(1)
(59)
(1)
(43)
37
(0)
(35)
69
Profit before Income Tax
226
18,821
222
18,463
2
192
16,016
18
% of Revenues
24.5%
27.4%
22.6%
Income Tax Expense
59
4,901
53
4,438
10
35
2,946
66
Profit for the Period
167
13,920
168
14,025
(1)
157
13,070
7
% of Revenues
18.1%
20.8%
18.5%
Diluted Earnings per Share
(EPS)
1.00
83.46
1.01
84.22
(1)
0.94
78.35
7
EBITDA Computation for the
quarter
Particulars
Q1FY25
Q1FY24
Q4FY24
($)
(₹)
($)
(₹)
($)
(₹)
Profit before Income Tax
226
18,821
222
18,463
192
16,016
Interest (Income) / Expense, net*
(12)
(1,037)
(8)
(685)
(10)
(835)
Depreciation
30
2,508
27
2,281
29
2,421
Amortization
16
1,302
16
1,302
15
1,291
Impairment
0
5
0
11
(2)
(173)
EBITDA
259
21,599
256
21,372
225
18,720
% of Revenues
28.2%
31.7%
26.4%
*Includes Income from Investment
Key Balance Sheet Items
Particulars
As on 30th Jun 2024
As on 31st Mar 2024
As on 30th Jun 2023
($)
(₹)
($)
(₹)
($)
(₹)
Cash and Cash Equivalents and Other
Investments
1,147
95,599
990
82,529
734
61,162
Trade Receivables
973
81,088
964
80,298
925
77,095
Inventories
823
68,568
763
63,552
629
52,398
Property, Plant, and Equipment
964
80,343
923
76,886
807
67,207
Goodwill and Other Intangible Assets
497
41,374
494
41,204
508
42,306
Loans and Borrowings (Current &
Non-Current)
368
30,675
240
20,020
150
12,520
Trade Payables
409
34,109
371
30,919
332
27,682
Equity
3,536
2,94,627
3,367
2,80,550
2,943
2,45,259
Key Business Highlights
- Acquired Nicotinell® and related brands in the Nicotine
Replacement Therapy category in markets outside the US from Haleon
plc for a total consideration of GBP 500 million, with an upfront
cash payment of GBP 458 million and performance-based contingent
payments of up to GBP 42 million, payable in 2025 and 2026. The
transaction is expected to close in early Q4 of calendar year
2024.
- Entered into a joint venture agreement with Nestlé
India to bring science-backed nutritional portfolio to more
consumers in India. The JV is expected to become operational in
Q2FY25.
- Partnered with Novartis Pharma LLC to distribute two of
their leading anti-diabetes brands, Galvus® and Galvus
Met®, in the Russian retail market.
- Received exclusive rights from Ingenus Pharmaceuticals to
commercialize Cyclophosphamide Injection in the US.
- Collaborated with Alvotech for commercialization of their
denosumab biosimilar candidate in the US on an exclusive
basis, as well as in Europe and UK.
- Launched drug-free migraine management device, Nerivio®,
in Germany, Spain, UK and South Africa.
- Inaugurated a 70,000 sq.ft. state-of-the-art
Biologics facility of Aurigene Pharmaceutical Services in
Genome Valley, Hyderabad, India. The process and analytical
development laboratories are operational while the commissioning of
manufacturing capacity will be completed in 2024.
ESG & other Updates
- Only Indian Pharma Company which featured in the 2024
list of Global 500 Most Sustainable Companies by Time
Magazine and Statista.
- Named ‘Asia-Pacific Climate Leader’ by Financial Times
for the second consecutive year in 2024, scoring the highest
amongst Indian Pharma peers.
- Won the 'Masters of Risk’ award in ‘Healthcare and
Pharma' at the India Risk Management Awards.
- Improved FTSE Russel’s ESG Score from 3.9 to 4.2 out of
5.
- Received a Form 483 with two observations after the
USFDA completed a routine GMP inspection at two of our
formulations manufacturing facilities in Duvvada,
Visakhapatnam.
- Received a Form 483 with four observations after the
USFDA completed a GMP inspection at our API manufacturing
facility in Srikakulam, Andhra Pradesh.
Revenue Analysis
- Q1FY25 consolidated revenues at ₹ 76.7 billion, YoY
growth of 14% and QoQ growth of 8%. The growth was largely driven
by growth in global generics revenues in North America as well as
India.
Global Generics (GG)
- Q1FY25 revenues at ₹ 68.9 billion, YoY growth of 15% and
QoQ growth of 13%. YoY growth was primarily volume led, aided by
new launches and integration of recently in-licensed vaccine
portfolio in India, partially offset by price erosion. Sequential
growth was due to change in product mix partly offset with adverse
price erosion.
North America
- Q1FY25 revenues at ₹ 38.5 billion, YoY growth of 20% and
QoQ growth of 18%. Our growth was largely on account of increase in
volumes of our base business, contribution from new launches,
partly offset by price erosion.
- During the quarter, we launched 3 new products in the U.S.
- During the quarter, we filed one new Abbreviated New Drug
Application (ANDA) with the U.S. FDA. As of June 30, 2024, 80
generic filings were approvals pending from the U.S. FDA. These
comprise of 75 ANDAs and five New Drug Applications (NDAs) filed
under the Section 505(b)(2) route of the US Federal Food, Drug, and
Cosmetic Act. Of the 75 ANDAs, 45 are Paragraph IV applications,
and we believe that 23 of these have the ‘First to File’
status.
Europe
- Q1FY25 revenues at ₹ 5.3 billion, YoY growth of 4% and
sequential growth of 1%. Growth was primarily on account of
improvement in base business volumes, new product launches, partly
offset by price erosion.
- Germany at ₹ 2.8 billion, YoY growth of 14% and QoQ
decline of 1%.
- UK at ₹ 1.6 billion, YoY decline of 7% and QoQ growth of
5%.
- Rest of Europe at ₹ 0.9 billion, YoY growth of 1% and
flat QoQ.
- During the quarter, we launched 12 new products across various
countries in the region.
India
- Q1FY25 revenues at ₹ 13.3 billion, YoY growth of 15% and
QoQ growth of 18%. YoY growth was mainly on account of new product
launches including the recently in-licensed vaccine portfolio. As
per IQVIA, our IPM rank was at 10 for the quarter.
- During the quarter, we launched 13 new brands in the country,
in addition to exclusive rights to promote and distribute Sanofi's
vaccine brands.
Emerging Markets
- Q1FY25 revenues at ₹ 11.9 billion, YoY growth of 3% and
QoQ decline of 2%. YoY growth is attributable to market share
expansion and new product launches, partly offset by unfavorable
forex and price erosion.
- Revenues from Russia at ₹ 5.5 billion, YoY decline of 2%
and QoQ growth of 11%.
- YoY decline was majorly due to unfavorable currency exchange
rate movements, partially offset by price increases and higher base
business volumes.
- QoQ growth was driven by increase in base business
volumes.
- Revenues from other Commonwealth of Independent States (CIS)
countries and Romania at ₹ 1.9 billion, decline of 2% YoY and
11% QoQ.
- YoY decline was primarily on account of decline in base
business volumes, partly offset by increase in prices.
- QoQ decline was driven by decline in base business
volumes.
- Revenues from Rest of World (RoW) territories at ₹ 4.4
billion, growth of 11% YoY and a decline of 11% QoQ.
- YoY growth was largely attributable to increase in volumes of
base business, contribution from new products, partly offset by
price erosion.
- QoQ decline was primarily driven by decline in base business
volumes and erosion.
- During the quarter, we launched 17 new products across various
countries in the region.
Pharmaceutical Services and Active Ingredients (PSAI)
- Q1FY25 revenues at ₹ 7.7 billion, with a growth of 14%
YoY and a decline of 7% QoQ. YoY growth was mainly driven by
improved volumes in base business, and contribution from new
products, QoQ decline was driven by decrease in volumes of certain
existing products.
- During the quarter, we filed 11 Drug Master Files (DMFs)
globally.
Income Statement Highlights:
Gross Margin
- Q1FY25 at 60.4% (GG: 64.7%, PSAI: 23.1%), an increase of
170 basis points (bps) over previous year and 183 bps sequentially.
The increase is on account of favourable product mix and overhead
leverage, partially offset by price erosion in generics
markets.
Selling, General & Administrative (SG&A)
Expenses
- Q1FY25 at ₹ 22.7 billion, YoY increase of 28% and 11%
QoQ. The increase is primarily on account of investment in new
business initiatives, higher freight costs, business integration
costs, annual merit increases, and building commercial capabilities
to enhance operational efficiencies.
Research & Development (R&D) Expenses
- Q1FY25 at ₹ 6.2 billion. As % to Revenues – Q1FY25: 8.1%
| Q1FY24: 7.4% | Q4FY24: 9.7%. R&D investments is reflecting
our biosimilars pipeline, development efforts across generics as
well as our novel oncology assets, which will support future
growth.
Other Operating Income
- Q1FY25 at ₹ 0.5 billion as compared to ₹ 0.8 billion in
Q1FY24.
Net Finance Income
- Q1FY25 at ₹0.8 billion compared to ₹ 0.8 billion in
Q1FY24.
Profit before Tax
- Q1FY25 at ₹ 18.8 billion, a YoY growth of 2% and a QoQ
growth of 18%. As % to Revenues – Q1FY25: 24.5% |
Q1FY24: 27.4% | Q4FY24: 22.6%.
Profit after Tax
- Q1FY25 at ₹ 13.9 billion, a YoY decline of 1% and a QoQ
growth of 7%. As % to Revenues – Q1FY25: 18.1% |
Q1FY24: 20.8% | Q4FY24: 18.5%. The Effective Tax Rate (ETR) for the
quarter was 26.0% as compared to 24.0% in Q1FY24.
Diluted Earnings per Share (EPS)
Other Highlights:
Earnings before Interest, Tax, Depreciation and Amortization
(EBITDA)
- Q1FY25 at ₹ 21.6 billion, YoY growth of 1% and QoQ
growth of 15%. As % to Revenues – Q1FY25: 28.2% | Q1FY24: 31.7% |
Q4FY24: 26.4%.
Others:
- Operating Working Capital: As on 30th June 2024 at ₹
115.5 billion.
- Capital Expenditure: Q1FY25 at ₹ 4.9 billion.
- Free Cash Flow: Q1FY25 at ₹ 2.3 billion.
- Net Cash Surplus: As on 30th June 2024 at ₹ 67.3
billion
- Debt to Equity: As on 30th June 2024 is (0.23)
- RoCE: Q1FY25 annualized at 33%.
About key metrics and non-GAAP Financial Measures
This press release contains non-GAAP financial measures within
the meaning of Regulation G and Item 10(e) of Regulation S-K. Such
non-GAAP financial measures are measures of our historical
performance, financial position or cash flows that are adjusted to
exclude or include amounts from the most directly comparable
financial measure calculated and presented in accordance with
IFRS.
The presentation of this financial information is not intended
to be considered in isolation or as a substitute for, or superior
to, the financial information prepared and presented in accordance
with IFRS. Our non-GAAP financial measures are not based on any
comprehensive set of accounting rules or principles. These measures
may be different from non-GAAP financial measures used by other
companies, limiting their usefulness for comparison purposes.
We believe these non-GAAP financial measures provide investors
with useful supplemental information about the financial
performance of our business, enable comparison of financial results
between periods where certain items may vary independent of
business performance, and allow for greater transparency with
respect to key metrics used by management in operating our
business.
For more information on our non-GAAP financial measures and a
reconciliation of GAAP to non-GAAP measures, please refer to
"Reconciliation of GAAP to Non-GAAP
Results" table in this press release.
All amounts in millions, except EPS
Reconciliation of GAAP Measures to Non-GAAP Measures
Operating Working Capital
Particulars
As on 30th Jun 2024
(₹)
Inventories
68,568
Trade Receivables
81,088
Less:
Trade Payables
34,109
Operating Working Capital
115,547
Free Cash Flow
Particulars
Three months ended 30th Jun
2024
(₹)
Net cash generated from operating
activities
10,027
Less:
Taxes
(1,531)
Investments in Property, Plant &
Equipment, and Intangibles
(6,224)
Free Cash Flow
2,272
Net Cash Surplus and Debt to
Equity
Particulars
As on 30th Jun 2024
(₹)
Cash and Cash Equivalents
4,913
Investments
90,686
Short-term Borrowings
(23,165)
Long-term Borrowings, Non-Current
(6,229)
Less:
Restricted Cash Balance – Unclaimed
Dividend
155
Lease liabilities (included in Long-term
Borrowings, Non-Current)
(2,429)
Equity Investments (Included in
Investments)
1,174
Net Cash Surplus
67,305
Equity
2,94,628
Net Debt/Equity
(0.23)
Computation of Return on Capital
Employed
Particulars
As on 30th Jun 2024
(₹)
Profit before Tax
18,821
Less:
Interest and Investment Income (Excluding
forex gain/loss)
1,037
Earnings Before Interest and taxes
[A]
17,784
Average Capital Employed [B]
215,327
Return on Capital Employed (A/B)
(Ratio)
Annualised Return on Capital Employed
(A/B)
33%
Computation of Capital
Employed:
Particulars
As on
30th Jun, 2024
31st Mar, 2024
Property Plant and Equipment
80,343
76,886
Intangibles
37,131
36,951
Goodwill
4,243
4,253
Investment in Equity Accounted
Associates
4,236
4,196
Other Current Assets
24,483
22,560
Other Investments
973
1,059
Other Non-Current Assets
1,659
1,632
Inventories
68,568
63,552
Trade Receivables
81,088
80,298
Derivative Financial Instruments
91
(299)
Less:
Other Liabilities
40,379
46,866
Provisions
5,532
5,444
Trade payables
34,109
30,919
Operating Capital Employed
222,795
207,859
Average Capital Employed
215,327
Computation of EBITDA
Refer page no. 3.
Earnings Call Details
The management of the Company will host an Earnings call to
discuss the Company’s financial performance and answer any
questions from the participants.
Date: Saturday, July 27, 2024
Time: 16:30 pm IST | 07:00 am
ET
Conference Joining Information
Option 1: Pre-register with the below
link and join without waiting for the operator
https://services.choruscall.in/DiamondPassRegistration/register?confirmationNumber=9959258&linkSecurityString=3f1c80877a
Option 2: Join through below Dial-In
Numbers
Universal Access Number:
+91 22 6280 1219
+91 22 7115 8120
International Toll-Free Number:
USA: 1 866 746 2133
UK: 0 808 101 1573
Singapore: 800 101 2045
Hong Kong: 800 964 448
No password/pin number is necessary to dial in to any of the
above numbers. The operator will provide instructions on asking
questions before and during the call.
Play Back: The play back will be available after the
earnings call, till August 3rd, 2024. For play back dial in phone
No: +91 22 7194 5757, and Playback Code is 57537.
Audio and Transcript: Audio and Transcript of the
Earnings call will be available on the Company’s website:
www.drreddys.com
About Dr. Reddy’s: Dr. Reddy’s Laboratories Ltd. (BSE:
500124, NSE: DRREDDY, NYSE: RDY, NSEIFSC: DRREDDY) is a global
pharmaceutical company headquartered in Hyderabad, India.
Established in 1984, we are committed to providing access to
affordable and innovative medicines. Driven by our purpose of ‘Good
Health Can’t Wait’, we offer a portfolio of products and services
including APIs, generics, branded generics, biosimilars and OTC.
Our major therapeutic areas of focus are gastrointestinal,
cardiovascular, diabetology, oncology, pain management and
dermatology. Our major markets include – USA, India, Russia &
CIS countries, China, Brazil, and Europe. As a company with a
history of deep science that has led to several industry firsts, we
continue to plan and invest in businesses of the future. As an
early adopter of sustainability and ESG actions, we released our
first Sustainability Report in 2004. Our current ESG goals aim to
set the bar high in environmental stewardship; access and
affordability for patients; diversity; and governance. For more
information, log on to: www.drreddys.com.
Disclaimer: This press release may include statements of
future expectations and other forward-looking statements that are
based on the management’s current views and assumptions and involve
known or unknown risks and uncertainties that could cause actual
results, performance, or events to differ materially from those
expressed or implied in such statements. In addition to statements
which are forward-looking by reason of context, the words "may",
"will", "should", "expects", "plans", "intends", "anticipates",
"believes", "estimates", "predicts", "potential", or "continue" and
similar expressions identify forward-looking statements. Actual
results, performance or events may differ materially from those in
such statements due to without limitation, (i) general economic
conditions such as performance of financial markets, credit
defaults , currency exchange rates , interest rates , persistency
levels and frequency / severity of insured loss events (ii)
mortality and morbidity levels and trends, (iii) changing levels of
competition and general competitive factors, (iv) changes in laws
and regulations and in the policies of central banks and/or
governments, (v) the impact of acquisitions or reorganization ,
including related integration issues, and (vi) the susceptibility
of our industry and the markets addressed by our, and our
customers’, products and services to economic downturns as a result
of natural disasters, epidemics, pandemics or other widespread
illness, including coronavirus (or COVID-19), and (vii) other risks
and uncertainties identified in our public filings with the
Securities and Exchange Commission, including those listed under
the "Risk Factors" and "Forward-Looking Statements" sections of our
Annual Report on Form 20-F for the year ended March 31, 2024. The
company assumes no obligation to update any information contained
herein.” The company assumes no obligation to update any
information contained herein.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240727061586/en/
INVESTOR RELATIONS RICHA PERIWAL
richaperiwal@drreddys.com AISHWARYA SITHARAM
aishwaryasitharam@drreddys.com MEDIA RELATIONS USHA IYER
ushaiyer@drreddys.com
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