Full Press Release Details
| CONTACT | ||
| DR. REDDY'S LABORATORIES LTD. | Investor relationS | Media relationS |
| 8-2-337, Road No. 3, Banjara Hills, Hyderabad - 500034. Telangana, India. | Saunak Savla saunaks@drreddys.com (Ph: +91-40-4900 2135) | Calvin Printer calvinprinter@drreddys.com (Ph: +91-40-4900 2121) |
Q4 and FY18 Financial Results
Hyderabad, India, May 22, 2018: Dr. Reddy's Laboratories
Ltd. (BSE: 500124 | NSE: DRREDDY | NYSE: RDY) today announced its consolidated financial results for the fourth quarter and full
year ended March 31, 2018 under International Financial Reporting Standards (IFRS).
| Q4 Performance Summary | FY18 Performance Summary | |
| Rs. 3,535 Cr | Rs. 14,203 Cr | |
| Revenue | Revenue | |
| [Down: 7% QoQ; 1% YoY] | [Up: 1% YoY] | |
| 53.5% | 53.7% | |
| Gross Margin | Gross Margin | |
| [Q3 FY18: 56.3%; Q4 FY17: 51.2%] | [FY17: 55.6%] | |
| Rs. 1,207 Cr | Rs. 4,691 Cr | |
| SGNA expenses | SGNA expenses | |
| [Up: 10% YoY] | [Up: 1% YoY] | |
| Rs. 435 Cr | Rs. 1,826 Cr | |
| R&D expenses | R&D expenses | |
| [12.3% of Revenues] | [12.9% of Revenues] | |
| Rs. 375 Cr | Rs. 1,434 Cr | |
| Profit before Tax | Profit before Tax | |
| [10.6% of Revenues] | [10.1% of Revenues] | |
| Rs. 302 Cr | Rs. 981 Cr | |
| Profit after Tax | Profit after Tax | |
| [8.5% of Revenues] | [6.9% of Revenues] |
Note: During 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 charge of Rs. 130 Crores for the full year.
Commenting on the results, CEO and Co-chairman,
G.V. Prasad said "We concluded a challenging year for Dr. Reddy's with a relatively muted fourth quarter's
performance. This was mainly on account of continuing headwinds in the U.S markets and a temporary drop in sales in Russia, attributable
to a shift in the channel purchasing pattern.
Looking ahead, we will continue to work
diligently on resolving pending regulatory issues. We will also focus on accelerating new products to market and improving our
Dr. Reddy's Laboratories Limited and
Consolidated Income Statement
| Q4 FY18 | Q4 FY17 | YoY | Q3 FY18 | QoQ | ||||||||||||||||||||||||||||
| Particulars | ($) | (Rs.) | ($) | (Rs.) | Gr % | ($) | (Rs.) | Gr% | ||||||||||||||||||||||||
| Revenues | 543 | 35,349 | 546 | 35,542 | (1 | ) | 585 | 38,060 | (7 | ) | ||||||||||||||||||||||
| Cost of Revenues | 253 | 16,454 | 267 | 17,360 | (5 | ) | 256 | 16,649 | (1 | ) | ||||||||||||||||||||||
| Gross Profit | 290 | 18,895 | 279 | 18,182 | 4 | 329 | 21,411 | (12 | ) | |||||||||||||||||||||||
| Operating Expenses | ||||||||||||||||||||||||||||||||
| Selling, General & Administrative expenses | 185 | 12,067 | 169 | 10,973 | 10 | 185 | 12,048 | 0 | ||||||||||||||||||||||||
| Research and Development expenses | 67 | 4,348 | 70 | 4,579 | (5 | ) | 72 | 4,667 | (7 | ) | ||||||||||||||||||||||
| Other operating (income) / expense | (3 | ) | (167 | ) | (8 | ) | (505 | ) | (67 | ) | (5 | ) | (313 | ) | (46 | ) | ||||||||||||||||
| Results from operating activities | 41 | 2,647 | 48 | 3,135 | (16 | ) | 77 | 5,009 | (47 | ) | ||||||||||||||||||||||
| Net finance (income) / expense | (16 | ) | (1,032 | ) | 1 | 48 | (13 | ) | (851 | ) | 21 | |||||||||||||||||||||
| Share of (profit) / loss of equity accounted investees | (1 | ) | (69 | ) | (2 | ) | (102 | ) | (32 | ) | (1 | ) | (85 | ) | (18 | ) | ||||||||||||||||
| Profit before income tax | 58 | 3,748 | 49 | 3,189 | 18 | 91 | 5,945 | (37 | ) | |||||||||||||||||||||||
| Income tax expense | 11 | 726 | 1 | 64 | 40 | 2,601 | (72 | ) | ||||||||||||||||||||||||
| Profit for the period | 46 | 3,022 | 48 | 3,125 | (3 | ) | 51 | 3,344 | (10 | ) | ||||||||||||||||||||||
| Diluted Earnings Per Share (EPS) | 0.28 | 18.18 | 0.29 | 18.83 | (3 | ) | 0.31 | 20.13 | (10 | ) |
| As % to Revenues | Q4 FY18 | Q4 FY17 | Q3 FY18 | |||||||||
| Gross Profit | 53.5 | 51.2 | 56.3 | |||||||||
| SG&A | 34.1 | 30.9 | 31.7 | |||||||||
| R&D | 12.3 | 12.9 | 12.3 | |||||||||
| PBT | 10.6 | 9.0 | 15.6 | |||||||||
| PAT | 8.5 | 8.8 | 8.8 |
| Particulars | Q4 FY18 | Q4 FY17 | Q3 FY18 | |||||||||||||||||||||
| ($) | (Rs.) | ($) | (Rs.) | ($) | (Rs.) | |||||||||||||||||||
| Profit before Income Tax | 58 | 3,748 | 49 | 3,189 | 91 | 5,945 | ||||||||||||||||||
| Interest (income) net* | (15 | ) | (1,001 | ) | (1 | ) | (90 | ) | (14 | ) | (881 | ) | ||||||||||||
| Depreciation # | 32 | 2,109 | 36 | 2,338 | 32 | 2,089 | ||||||||||||||||||
| Amortization # | 14 | 921 | 13 | 866 | 14 | 902 | ||||||||||||||||||
| EBITDA | 89 | 5,777 | 97 | 6,303 | 124 | 8,055 |
* - Includes income from Investments #
includes impairment charge
Revenue Mix by Segment
| Q4 FY18 | Q4 FY17 | YoY | Q3 FY18 | QoQ | ||||||||||||||||
| Particulars | (Rs.) | (Rs.) | Growth % | (Rs.) | Growth % | |||||||||||||||
| Global Generics | 27,836 | 29,138 | (4 | ) | 30,105 | (8 | ) | |||||||||||||
| North America | 14,487 | 15,349 | (6 | ) | 16,073 | (10 | ) | |||||||||||||
| Europe* | 1,711 | 2,066 | (17 | ) | 2,006 | (15 | ) | |||||||||||||
| India | 6,138 | 5,711 | 7 | 6,126 | 0 | |||||||||||||||
| Emerging Markets # | 5,500 | 6,012 | (9 | ) | 5,900 | (7 | ) | |||||||||||||
| Pharmaceutical Services and Active Ingredients (PSAI) | 6,251 | 5,401 | 16 | 5,436 | 15 | |||||||||||||||
| Proprietary Products & Others | 1,262 | 1,003 | 26 | 2,519 | (50 | ) | ||||||||||||||
| Total | 35,349 | 35,542 | (1 | ) | 38,060 | (7 | ) |
primarily includes Germany and UK
Markets refers to Russia, other CIS countries, Romania and Rest of the World markets
Dr. Reddy's Laboratories Limited and
Consolidated Income Statement
| FY 18 | FY 17 | Growth | ||||||||||||||||||||||||||
| Particulars | ($) | (Rs.) | % | ($) | (Rs.) | % | % | |||||||||||||||||||||
| Revenues | 2,181 | 1,42,028 | 100.0 | 2,163 | 1,40,809 | 100.0 | 1 | |||||||||||||||||||||
| Cost of Revenues | 1,009 | 65,724 | 46.3 | 959 | 62,453 | 44.4 | 5 | |||||||||||||||||||||
| Gross Profit | 1,172 | 76,304 | 53.7 | 1,203 | 78,356 | 55.6 | (3 | ) | ||||||||||||||||||||
| Operating Expenses | ||||||||||||||||||||||||||||
| Selling, General & Administrative expenses | 720 | 46,910 | 33.0 | 712 | 46,372 | 32.9 | 1 | |||||||||||||||||||||
| Research and Development expenses | 281 | 18,265 | 12.9 | 300 | 19,551 | 13.9 | (7 | ) | ||||||||||||||||||||
| Other operating expense / (income) | (12 | ) | (788 | ) | (0.6 | ) | (16 | ) | (1,065 | ) | (0.8 | ) | (26 | ) | ||||||||||||||
| Results from operating activities | 183 | 11,917 | 8.4 | 207 | 13,498 | 9.6 | (12 | ) | ||||||||||||||||||||
| Finance (income), net | (32 | ) | (2,080 | ) | (1.5 | ) | (12 | ) | (806 | ) | (0.6 | ) | 158 | |||||||||||||||
| Share of (profit) of equity accounted investees, net of income tax | (5 | ) | (344 | ) | (0.2 | ) | (5 | ) | (349 | ) | (0.2 | ) | (1 | ) | ||||||||||||||
| Profit before income tax | 220 | 14,341 | 10.1 | 225 | 14,653 | 10.4 | (2 | ) | ||||||||||||||||||||
| Income tax expense | 70 | 4,535 | 3.2 | 40 | 2,614 | 1.9 | 73 | |||||||||||||||||||||
| Profit for the period | 151 | 9,806 | 6.9 | 185 | 12,039 | 8.5 | (19 | ) | ||||||||||||||||||||
| Diluted Earnings Per Share (EPS) | 0.91 | 59.00 | 1.11 | 72.09 | (18 | ) |
| FY 18 | FY 17 | |||||||||||||||
| Particulars | ($) | (Rs.) | ($) | (Rs.) | ||||||||||||
| Profit before income tax | 220 | 14,341 | 225 | 14,653 | ||||||||||||
| Interest (income) / expense net* | (31 | ) | (2,022 | ) | (14 | ) | (880 | ) | ||||||||
| Depreciation # | 127 | 8,285 | 122 | 7,931 | ||||||||||||
| Amortization # | 53 | 3,477 | 58 | 3,791 | ||||||||||||
| EBITDA | 370 | 24,081 | 392 | 25,495 | ||||||||||||
| EBITDA (% to revenues) | 17.0 | 18.1 |
* - Includes income from Investments #
includes impairment charge
Key Balance Sheet Items
| As on 31st Mar 2018 | As on 31st Dec 2017 | As on 31st Mar 2017 | ||||||||||||||||||||||
| Particulars | ($) | (Rs.) | ($) | (Rs.) | ($) | (Rs.) | ||||||||||||||||||
| Cash and cash equivalents and current investments | 322 | 20,967 | 337 | 21,958 | 279 | 18,136 | ||||||||||||||||||
| Trade receivables (current & non-current) | 626 | 40,786 | 654 | 42,593 | 588 | 38,271 | ||||||||||||||||||
| Inventories | 447 | 29,089 | 412 | 26,825 | 438 | 28,529 | ||||||||||||||||||
| Property, plant and equipment | 889 | 57,869 | 894 | 58,189 | 878 | 57,160 | ||||||||||||||||||
| Goodwill and Other Intangible assets | 747 | 48,610 | 740 | 48,182 | 748 | 48,677 | ||||||||||||||||||
| Loans and borrowings (current & non-current) | 779 | 50,714 | 843 | 54,911 | 755 | 49,185 | ||||||||||||||||||
| Trade payables | 247 | 16,052 | 224 | 14,575 | 206 | 13,417 | ||||||||||||||||||
| Equity | 1,942 | 1,26,460 | 1,900 | 1,23,685 | 1,905 | 1,24,044 |
Revenue Mix by Segment [Year on year]
| FY 18 | FY 17 | Growth | ||||||||||||||||||||||||||
| Particulars | ($) | (Rs.) | % | ($) | (Rs.) | % | % | |||||||||||||||||||||
| Global Generics | 1,751 | 1,14,014 | 80 | % | 1,773 | 1,15,409 | 82 | % | (1 | ) | ||||||||||||||||||
| North America | 59,822 | 63,601 | (6 | ) | ||||||||||||||||||||||||
| Europe* | 8,217 | 7,606 | 8 | |||||||||||||||||||||||||
| India | 23,322 | 23,131 | 1 | |||||||||||||||||||||||||
| Emerging Markets # | 22,653 | 21,071 | 8 | |||||||||||||||||||||||||
| Pharmaceutical Services and Active Ingredients (PSAI) | 338 | 21,992 | 16 | % | 327 | 21,277 | 15 | % | 3 | |||||||||||||||||||
| Proprietary Products & Others | 92 | 6,022 | 4 | % | 63 | 4,123 | 3 | % | 46 | |||||||||||||||||||
| Total | 2,181 | 1,42,028 | 100 | % | 2,163 | 1,40,809 | 100 | % | 1 |
* Europe primarily includes
# Emerging Markets refers to Russia, other CIS countries, Romania
and Rest of the World markets including Venezuela
Segmental Analysis [FY18]
Global Generics (GG)
Revenues from GG segment at Rs. 114
billion. Year-on-year (YoY) decline of 1%
Decline primarily on account of lower contribution
from North America generics markets due to higher price erosion and unfavorable US dollar conversion
As of 31st March 2018, cumulatively
110 generic filings are pending for approval with the USFDA (107 ANDAs and 3 NDAs under 505(b)(2) route). Of these 107 ANDAs, 63
are Para IVs out of which we believe 30 have First to File' status.
Pharmaceutical Services and Active Ingredients
Proprietary Products (PP)
During the year USFDA approved IMPOYZ
(clobetasol propionate) Cream 0.025%. In line with the existing out-licensing agreement with Encore Dermatalogy Inc. this approval
triggered milestone recognition of Rs. 1.5 billion.
Income Statement Highlights [FY18]
The Board has recommended payment of a dividend
of Rs. 20 per equity share of face value Rs 5/- each (400% of face value) for the year ended March 31, 2018 subject to approval
Earnings Call Details (06:30 pm IST, 09:00 am EDT, May 22, 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 below
| Primary number: | 91 22 6280 1219 |
| Secondary number: | 91 22 7115 8120 |
The numbers listed above are universally accessible from all
networks and all countries.
| International Toll Free Number | USA | 18667462133 |
| UK | 08081011573 | |
| Singapore | 8001012045 | |
| Hong Kong | 800964448 |
| Playback of call: | 91 22 7194 5757, 91 22 6181 3322 |
| Conference ID: | 375# |
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: 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 reorganisation
, including related integration issues.
The company assumes no obligation to update any information