Full Press Release Details
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| DR. REDDY'S LABORATORIES LTD. | Investor relationS | Media relationS |
| 8-2-337, Road No. 3, Banjara Hills, Hyderabad - 500034. Telangana, India. | AMIT AGARWAL amita@drreddys.com (Ph: +91-40-4900 2135) | DEEP GHATAK deepghatak@drreddys.com (Ph: +91-40-4900 2121) |
Dr. Reddy's Q3 & 9M FY20 Financial Results
Hyderabad, India, January 27, 2020: Dr. Reddy's Laboratories Ltd. (BSE: 500124 | NSE: DRREDDY | NYSE: RDY) today announced its consolidated financial results for the quarter ended December 31, 2019 under International Financial Reporting Standards (IFRS).
| Q3 Performance Summary | 9M Performance Summary | |
| Rs. 4,384 Cr Revenue [Down: 9% QoQ; Up: 14% YoY] 54.1% Gross Margin [Q2 FY20: 57.5%; Q3 FY19: 53.9%] Rs. 1,267 Cr SGNA expenses [Down: 4% QoQ, Up: 5% YoY] Rs. 395 Cr R&D expenses [9.0% of Revenues] Rs. 1,074 Cr EBITDA [Down: 25% QoQ; Up: 24% YoY] Rs. (527 Cr)* Profit before Tax [Down: 169% QoQ; 191% YoY] | Rs. 13,028 Cr Revenue [Up: 15% YoY] 54.7% Gross Margin [9M FY19: 54.9%] Rs. 3,795 Cr SGNA expenses [Up: 4% YoY] Rs. 1,122 Cr R&D expenses [8.6% of Revenues] Rs. 3,642 Cr EBITDA [Up: 44% YoY] Rs. 1,089 Cr Profit before Tax [Down: 34% YoY] |
* Excluding intangibles impairment of Rs. 1,320 Cr; Profit before tax is Rs. 793 Cr
Commenting on the results, Co-Chairman and MD, GV Prasad said "The current quarter performance has been good across all our businesses and we achieved strong EBITDA margins. The profits were impacted due to trigger based impairment charge taken on a few products including gNuvaring. We continue to focus on execution and have made significant progress on quality systems and operational efficiencies".
Dr. Reddy's Laboratories Limited and Subsidiaries
Consolidated Income Statement
| Q3 FY20 | Q3 FY19 | YoY | Q2 FY20 | QoQ | ||||||||||||||||||||||||||||
| Particulars | ($) | (Rs.) | ($) | (Rs.) | Gr % | ($) | (Rs.) | Gr% | ||||||||||||||||||||||||
| Revenues | 614 | 43,838 | 540 | 38,500 | 14 | 673 | 48,009 | (9 | ) | |||||||||||||||||||||||
| Cost of Revenues | 282 | 20,116 | 249 | 17,748 | 13 | 286 | 20,389 | (1 | ) | |||||||||||||||||||||||
| Gross Profit | 332 | 23,722 | 291 | 20,752 | 14 | 387 | 27,620 | (14 | ) | |||||||||||||||||||||||
| Operating Expenses | ||||||||||||||||||||||||||||||||
| Selling, General & Administrative expenses | 178 | 12,670 | 169 | 12,036 | 5 | 185 | 13,217 | (4 | ) | |||||||||||||||||||||||
| Research and Development expenses | 55 | 3,949 | 51 | 3,668 | 8 | 51 | 3,662 | 8 | ||||||||||||||||||||||||
| Impairment of non-current assets | 185 | 13,200 | - | - | 50 | 3,560 | 271 | |||||||||||||||||||||||||
| Other operating (income) | (3 | ) | (228 | ) | (10 | ) | (681 | ) | (67 | ) | (2 | ) | (135 | ) | 68 | |||||||||||||||||
| Results from operating activities | (82 | ) | (5,869 | ) | 80 | 5,729 | (202 | ) | 103 | 7,316 | (180 | ) | ||||||||||||||||||||
| Net finance (income) | (6 | ) | (419 | ) | 0 | 13 | (3 | ) | (231 | ) | 81 | |||||||||||||||||||||
| Share of (profit) / loss of equity accounted investees | (2 | ) | (176 | ) | (1 | ) | (89 | ) | 98 | (2 | ) | (117 | ) | 50 | ||||||||||||||||||
| Profit before income tax | (74 | ) | (5,274 | ) | 81 | 5,805 | (191 | ) | 107 | 7,664 | (169 | ) | ||||||||||||||||||||
| Income tax expense | 6 | 423 | 13 | 953 | (56 | ) | (46 | ) | (3,261 | ) | (113 | ) | ||||||||||||||||||||
| Profit for the period | (80 | ) | (5,697 | ) | 68 | 4,852 | (217 | ) | 153 | 10,925 | (152 | ) | ||||||||||||||||||||
| Diluted Earnings Per Share (EPS) | (0.48 | ) | (34.37 | ) | 0.41 | 29.21 | (217 | ) | 0.92 | 65.82 | (152 | ) |
| As % to Revenues | Q3 FY20 | Q3 FY19 | Q2 FY20 | |||||||||
| Gross Profit | 54.1 | 53.9 | 57.5 | |||||||||
| SG&A | 28.9 | 31.3 | 34.9 | |||||||||
| R&D | 9.0 | 9.5 | 7.6 | |||||||||
| EBITDA | 24.5 | 22.5 | 29.9 | |||||||||
| PBT* | (12.0 | ) | 15.1 | 16.0 | ||||||||
| PAT | (13.0 | ) | 12.6 | 22.8 |
*Excluding intangibles impairment Q3 FY20 PBT @ 18.1%
| Q3 FY20 | Q3 FY19 | Q2 FY20 | ||||||||||||||||||||||
| Particulars | ($) | (Rs.) | ($) | (Rs.) | ($) | (Rs.) | ||||||||||||||||||
| Profit before Income Tax | (74 | ) | (5,274 | ) | 81 | 5,805 | 107 | 7,664 | ||||||||||||||||
| Interest (income) net* | (4 | ) | (274 | ) | (4 | ) | (260 | ) | (3 | ) | (226 | ) | ||||||||||||
| Depreciation | 30 | 2,130 | 29 | 2,073 | 32 | 2,306 | ||||||||||||||||||
| Amortization | 13 | 955 | 14 | 1,035 | 14 | 1,033 | ||||||||||||||||||
| Impairment | 185 | 13,200 | - | - | 50 | 3,561 | ||||||||||||||||||
| EBITDA | 150 | 10,737 | 121 | 8,652 | 201 | 14,338 |
* Includes income from Investments
Key Balance Sheet Items
| As on 31 st Dec, 2019 | As on 30 th Sep 2019 | As on 31 st Dec 2018 | ||||||||||||||||||||||
| Particulars | ($) | (Rs.) | ($) | (Rs.) | ($) | (Rs.) | ||||||||||||||||||
| Cash and cash equivalents and other investments | 287 | 20,457 | 427 | 30,446 | 359 | 25,593 | ||||||||||||||||||
| Trade receivables (current & non-current) | 646 | 46,095 | 591 | 42,153 | 523 | 37,302 | ||||||||||||||||||
| Inventories | 529 | 37,746 | 491 | 35,033 | 475 | 33,911 | ||||||||||||||||||
| Property, plant and equipment | 739 | 52,709 | 743 | 53,008 | 776 | 55,344 | ||||||||||||||||||
| Goodwill and Other Intangible assets | 432 | 30,847 | 621 | 44,340 | 690 | 49,205 | ||||||||||||||||||
| Loans and borrowings (current & non-current) | 229 | 16,320 | 442 | 31,545 | 614 | 43,836 | ||||||||||||||||||
| Trade payables | 250 | 17,810 | 216 | 15,434 | 223 | 15,939 | ||||||||||||||||||
| Equity | 2,083 | 1,48,672 | 2,155 | 1,53,816 | 1,902 | 1,35,708 |
Revenue Mix by Segment
| Q3 FY20 | Q3 FY19 | YoY | Q2 FY20 | QoQ | ||||||||||||||||
| Particulars | (Rs.) | (Rs.) | Growth % | (Rs.) | Growth % | |||||||||||||||
| Global Generics | 35,927 | 31,347 | 15 | % | 32,816 | 9 | % | |||||||||||||
| North America | 15,999 | 14,832 | 8 | % | 14,265 | 12 | % | |||||||||||||
| Europe | 3,093 | 2,030 | 52 | % | 2,764 | 12 | % | |||||||||||||
| India | 7,636 | 6,741 | 13 | % | 7,511 | 2 | % | |||||||||||||
| Emerging Markets | 9,199 | 7,744 | 19 | % | 8,276 | 11 | % | |||||||||||||
| Pharmaceutical Services and Active Ingredients (PSAI) | 6,906 | 5,937 | 16 | % | 7,107 | -3 | % | |||||||||||||
| Proprietary Products & Others | 1,005 | 1,216 | (18 | )% | 8,086 | (88 | )% | |||||||||||||
| Total | 43,838 | 38,500 | 14 | % | 48,009 | (9 | )% |
Revenue analysis (Segment wise)
Sales for the quarter is Rs. 43.8 billion with a year-on-year growth of 14%. Sequentially, it has declined by 9%. In Q2 FY 20, we had out-licensed 2 neuro products of the proprietary products business and recognized a revenue of Rs. 7.2 billion. Adjusted for this, the sequential quarter growth is 7%, and is highest ever quarterly sales from operations, without any one-off item.
Global Generics (GG)
Revenues from GG segment at Rs. 35.9 billion. Year-on-year growth of 15%, primarily driven by Europe, Emerging Markets and India. Sequential growth of 9%, primarily driven by NAG, Europe and EM.
As of 31st December 2019, cumulatively 101 generic filings are pending for approval with the USFDA (99 ANDAs and 2 NDAs under 505(b)(2) route). Of these 99 ANDAs, 53 are Para IVs out of which we believe 32 have First to File' status.
Pharmaceutical Services and Active Ingredients (PSAI)
Proprietary Products Segment (PP)
Income Statement Highlights:
Earnings Call Details (06:30 pm IST, 08:00 am EST, January 27, 2020)
The Company will host an earnings call to discuss the performance and answer any questions from participants.
Audio conference Participants can dial-in on the numbers below:
| Universal Access Number: | +91 22 6280 1219 |
| Secondary number: | +91 22 7115 8120 |
| Local Access number: | +91 70456 71221 |
| (Available all over India) |
| International Toll Free Number | USA | 1 866 746 2133 |
| UK | 0 808 101 1573 | |
| Singapore | 800 101 2045 | |
| Hong Kong | 800 964 448 |
| Playback of call: | +91 22 7194 5757, +91 22 6663 5757 |
| Conference ID: | 58113 |
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 gastrointestinal, cardiovascular, diabetology, oncology, pain management and dermatology. Dr. Reddy's operates in markets across the globe. Our major markets include - USA, India, Russia & CIS countries, and Europe. 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 contained herein.