Full Press Release Details
| DR. REDDY'S LABORATORIES LTD. | CONTACT | |
| 8-2-337, Road No. 3, Banjara Hills, | Investor relationS | Media relationS |
| Hyderabad - 500034. Telangana, India. | Saunak Savla | Calvin Printer |
| CIN: L85195TG1984PLC004507 | saunaks@drreddys.com | calvinprinter@drreddys.com |
| (Ph: +91-40-4900 2135) | (Ph: +91-40-4900 2121) |
Q3 and 9M FY18 Financial Results
Hyderabad, India, January 25, 2018: Dr. Reddy's Laboratories
Ltd. (BSE: 500124 | NSE: DRREDDY | NYSE: RDY) today announced its consolidated financial results for the third quarter and nine
months ended December 31, 2017 under International Financial Reporting Standards (IFRS).
| Q3 Performance Summary | 9M Performance Summary | |
| Rs. 3,806 Cr | Rs. 10,668 Cr | |
| Revenue | Revenue | |
| [Up: 7% QoQ, Up: 3% YoY] | [Up: 1% YoY] | |
| 56.3% | 53.8% | |
| Gross Margin | Gross Margin | |
| [Q2 FY18: 53.3%; Q3 FY17: 59.1%] | [9M FY17: 57.2%] | |
| Rs. 1,205 Cr | Rs. 3,484 Cr | |
| SGNA expenses | SGNA expenses | |
| [Up: 6% YoY] | [Down: 2% YoY] | |
| Rs. 467 Cr | Rs. 1,392 Cr | |
| R&D expenses | R&D expenses | |
| [12.3% of Revenues] | [13.0% of Revenues] | |
| Rs. 806 Cr | Rs. 1,830 Cr | |
| EBITDA | EBITDA | |
| [21.2% of Revenues] | [17.2% of Revenues] | |
| Rs. 334 Cr* | Rs. 678 Cr* | |
| Profit after Tax | Profit after Tax | |
| [8.8% of Revenues] | [6.4% of Revenues] |
Q3 FY18, the Tax Cuts and Jobs Act of 2017' was approved and enacted in the United States. Consequent to this enactment
the deferred tax assets and liabilities of the US entity have been re-measured resulting in a one-time charge of Rs. 93 Crores.
[Adjusted PAT for Q3 FY 18: Rs. 427 Crores and 9M FY 18: Rs. 771 Crores]
Commenting on the results, CEO and Co-chairman, G.V. Prasad said
"We had a satisfactory third quarter performance, with all our key markets performing well. We recorded sequential revenue
growth of 7%, despite continuing challenges such as price erosion in the U.S. Our first-cycle NDA approval of Impoyz is
a significant milestone in the commercialization of our proprietary products pipeline. We will continue our focus on operational
excellence and controlling of SG&A costs across the organisation".
Dr. Reddy's Laboratories Limited and
Consolidated Income Statement
| Q3 FY 18 | Q3 FY 17 | Growth | ||||||||||||||||||||||||||
| Particulars | ($) | (Rs.) | % | ($) | (Rs.) | % | % | |||||||||||||||||||||
| Revenues | 596 | 38,060 | 100.0 | 581 | 37,065 | 100.0 | 3 | |||||||||||||||||||||
| Cost of revenues | 261 | 16,649 | 43.7 | 238 | 15,166 | 40.9 | 10 | |||||||||||||||||||||
| Gross profit | 335 | 21,411 | 56.3 | 343 | 21,899 | 59.1 | (2 | ) | ||||||||||||||||||||
| Operating Expenses | ||||||||||||||||||||||||||||
| Selling, general & administrative expenses | 189 | 12,048 | 31.7 | 178 | 11,341 | 30.6 | 6 | |||||||||||||||||||||
| Research and development expenses | 73 | 4,667 | 12.3 | 78 | 4,956 | 13.4 | (6 | ) | ||||||||||||||||||||
| Other operating expense / (income) | (5 | ) | (313 | ) | (0.8 | ) | (3 | ) | (187 | ) | (0.5 | ) | 67 | |||||||||||||||
| Results from operating activities | 78 | 5,009 | 13.2 | 91 | 5,789 | 15.6 | (13 | ) | ||||||||||||||||||||
| Finance expense / (income), net | (13 | ) | (851 | ) | (2.2 | ) | (1 | ) | (44 | ) | (0.1 | ) | 1850 | |||||||||||||||
| Share of (profit) of equity accounted investees, net of income tax | (1 | ) | (85 | ) | (0.2 | ) | (1 | ) | (89 | ) | (0.2 | ) | (5 | ) | ||||||||||||||
| Profit before income tax | 93 | 5,945 | 15.6 | 93 | 5,922 | 16.0 | 0 | |||||||||||||||||||||
| Income tax expense | 41 | 2,601 | * | 6.8 | 19 | 1,221 | 3.3 | 113 | ||||||||||||||||||||
| Profit for the period | 52 | 3,344 | 8.8 | 74 | 4,701 | 12.7 | (29 | ) | ||||||||||||||||||||
| Diluted EPS | 0.32 | 20.13 | 0.44 | 28.32 | (29 | ) |
* ~Rs. 930 million impact on account
of reforms in US tax laws
| Q3 FY 18 | Q3 FY 17 | |||||||||||||||
| Particulars | ($) | (Rs.) | ($) | (Rs.) | ||||||||||||
| Profit before income tax | 93 | 5,945 | 93 | 5,922 | ||||||||||||
| Interest (income) / expense net* | (14 | ) | (881 | ) | (1 | ) | (53 | ) | ||||||||
| Depreciation | 33 | 2,089 | 30 | 1,936 | ||||||||||||
| Amortization | 14 | 882 | 15 | 956 | ||||||||||||
| Impairment | 0.3 | 20 | 0.5 | 32 | ||||||||||||
| EBITDA | 126 | 8,055 | 138 | 8,793 | ||||||||||||
| EBITDA (% to revenues) | 21.2 | 23.7 |
* - Includes income from Investments
Key Balance Sheet Items
| As on 31 st Dec 17 | As on 30 th Sep 17 | |||||||||||||||
| Particulars | ($) | (Rs.) | ($) | (Rs.) | ||||||||||||
| Cash and cash equivalents and Other current Investments | 344 | 21,958 | 263 | 16,793 | ||||||||||||
| Trade receivables (current) | 665 | 42,432 | 661 | 42,203 | ||||||||||||
| Inventories | 420 | 26,825 | 423 | 26,998 | ||||||||||||
| Property, plant and equipment | 912 | 58,189 | 907 | 57,905 | ||||||||||||
| Goodwill and Other Intangible assets | 755 | 48,182 | 778 | 49,634 | ||||||||||||
| Loans and borrowings (current & non-current) | 860 | 54,911 | 841 | 53,668 | ||||||||||||
| Trade payables | 228 | 14,575 | 222 | 14,193 | ||||||||||||
| Equity | 1,938 | 1,23,685 | 1,909 | 1,21,840 |
Revenue Mix by Segment [Year on year]
| Q3 FY 18 | Q3 FY 17 | Growth | ||||||||||||||||||||||||||
| Particulars | ($) | (Rs.) | % | ($) | (Rs.) | % | % | |||||||||||||||||||||
| Global Generics | 472 | 30,105 | 79 | 480 | 30,638 | 83 | -2 | |||||||||||||||||||||
| North America | 16,073 | 16,595 | -3 | |||||||||||||||||||||||||
| Europe* | 2,006 | 2,148 | -7 | |||||||||||||||||||||||||
| India | 6,126 | 5,947 | 3 | |||||||||||||||||||||||||
| Emerging Markets # | 5,900 | 5,948 | -1 | |||||||||||||||||||||||||
| PSAI | 85 | 5,436 | 14 | 85 | 5,400 | 14 | 1 | |||||||||||||||||||||
| North America | 863 | 1,259 | -31 | |||||||||||||||||||||||||
| Europe | 1,572 | 1,828 | -14 | |||||||||||||||||||||||||
| India | 627 | 409 | 53 | |||||||||||||||||||||||||
| Rest of World | 2,374 | 1,904 | 25 | |||||||||||||||||||||||||
| Proprietary Products & Others | 39 | 2,519 | 7 | 16 | 1,027 | 3 | 145 | |||||||||||||||||||||
| Total | 596 | 38,060 | 100 | 581 | 37,065 | 100 | 3 |
Revenue Mix by Segment [Sequential]
| Q3 FY 18 | Q2 FY 18 | Growth | ||||||||||||||||||||||||||
| Particulars | ($) | (Rs.) | % | ($) | (Rs.) | % | % | |||||||||||||||||||||
| Global Generics | 472 | 30,105 | 79 | 448 | 28,618 | 81 | 5 | |||||||||||||||||||||
| North America | 16,073 | 14,318 | 12 | |||||||||||||||||||||||||
| Europe* | 2,006 | 2,424 | -17 | |||||||||||||||||||||||||
| India | 6,126 | 6,370 | -4 | |||||||||||||||||||||||||
| Emerging Markets # | 5,900 | 5,506 | 7 | |||||||||||||||||||||||||
| PSAI | 85 | 5,436 | 14 | 89 | 5,654 | 16 | -4 | |||||||||||||||||||||
| North America | 863 | 962 | -10 | |||||||||||||||||||||||||
| Europe | 1,572 | 1,938 | -19 | |||||||||||||||||||||||||
| India | 627 | 436 | 44 | |||||||||||||||||||||||||
| Rest of World | 2,374 | 2,318 | 2 | |||||||||||||||||||||||||
| Proprietary Products & Others | 39 | 2,519 | 7 | 19 | 1,188 | 3 | 112 | |||||||||||||||||||||
| Total | 596 | 38,060 | 100 | 556 | 35,460 | 100 | 7 |
primarily includes Germany, UK and out licensing sales business
Markets refers to Russia, other CIS countries, Romania and Rest of the World markets including Venezuela
Global Generics (GG)
Revenues from GG segment
at Rs. 30.1 billion.
Sequential growth of 5%, primarily
driven by the US and Emerging Markets
Year-on-year decline of 2%, primarily
on account of adverse foreign exchange as the US dollar depreciated by ~4% and lower contribution from Europe generics market.
As of 31st December 2017,
cumulatively 102 generic filings are pending for approval with the USFDA (99 ANDAs and 3 NDAs under 505(b)(2) route). Of these
99 ANDAs, 59 are Para IVs out of which we believe 29 have First to File' status.
Pharmaceutical Services and Active Ingredients (PSAI)
Proprietary Products (PP)
During Q3 FY18 USFDA approved IMPOYZ
(clobetasol propionate) Cream 0.025%. In line with the existing outlicensing agreement with Encore Dermatology Inc. this approval
triggered milestone recognition of Rs. 1.3 billion during Q3 FY18.
Income Statement Highlights:
Earnings Call Details
(06:30 pm IST, 08:00 am EST, January 25, 2018)
The Company will host an earnings call to discuss the
performance and answer any questions from participants. This call will be accessible through an audio dial-in and a web-cast.
Audio conference Participants can dial-in on the numbers
| Primary number: | 91 22 3960 0616 | |
| Secondary number: | 91 22 6746 5826 | |
| International Toll Free Number | USA | 18667462133 |
| UK | 08081011573 | |
| Singapore | 8001012045 | |
| Hong Kong | 800964448 |
| Playback of call: | 91 22 3065 2322, 91 22 6181 3322 |
| Conference ID: | 375# |
| Web-cast | More details will be provided through our website, www.drreddys.com |
Transcript of the event will be available at www.drreddys.com.
Playback will be available for a few days.
About Dr. Reddy's: Dr. Reddy's
Laboratories Ltd. (BSE: 500124, NSE: DRREDDY, NYSE: RDY) is an integrated pharmaceutical company, committed to providing affordable
and innovative medicines for healthier lives. Through its three businesses - Pharmaceutical Services & Active Ingredients,
Global Generics and Proprietary Products - Dr. Reddy's offers a portfolio of products and services including APIs,
custom pharmaceutical services, generics, biosimilars and differentiated formulations. Our major therapeutic areas of focus are
gastro-intestinal, cardiovascular, diabetology, oncology, pain management and dermatology. Dr. Reddy's operates in markets
across the globe. Our major markets include - USA, India, Russia and other CIS countries. For more information, log on to:
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 reorganisation , including
related integration issues.
The company assumes no obligation to update any information contained