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. | RICHA PERIWAL richaperiwal@drreddys.com | USHA IYER ushaiyer@drreddys.com |
Dr. Reddy's Q2 FY24 Financial Results
Hyderabad, India, Oct 27, 2023: Dr. Reddy's
Laboratories Ltd. (BSE: 500124 | NSE: DRREDDY | NYSE: RDY | NSEIFSC: DRREDDY) today announced its consolidated financial results for the
quarter ended Sep 30, 2023. The information mentioned in this release is based on consolidated financial statements under International
Financial Reporting Standards (IFRS).
| Revenues | Rs. 68,802 Mn [Up: 9% YoY; Up: 2% QoQ] | |
| Gross Margin | 58.7% [Q2 FY23: 59.1%; Q1 FY24: 58.7%] | |
| SG&A Expenses | Rs. 18,795 Mn [Up: 13% YoY; 6% QoQ] | |
| R&D Expenses | Rs. 5,447 Mn [7.9% of Revenues] | |
| EBITDA | Rs. 21,813 Mn [31.7% of Revenues] | |
| Profit before Tax | Rs. 19,134 Mn [Up: 19% YoY; Up: 4% QoQ] | |
| Profit after Tax | Rs. 14,800 Mn [Up: 33% YoY; Up: 6% QoQ] |
Commenting on the results, Co-Chairman &
MD, G V Prasad said: "We delivered another quarter of strong results with highest ever sales and profits, driven by market
share gains & momentum in our US generics business and robust growth in Europe. We are continuing to strengthen our pipeline both
organically and through business development to drive growth and create differentiation."
Dr. Reddy's Laboratories Limited and Subsidiaries
Consolidated Income Statement
| Q2 FY24 | Q2 FY23 | YoY | Q1 FY24 | QoQ | ||||||||||||||||||||||||||||
| Particulars | ($) | (Rs.) | ($) | (Rs.) | Gr % | ($) | (Rs.) | Gr % | ||||||||||||||||||||||||
| Revenues | 828 | 68,802 | 759 | 63,057 | 9 | 811 | 67,384 | 2 | ||||||||||||||||||||||||
| Cost of Revenues | 342 | 28,434 | 311 | 25,810 | 10 | 335 | 27,831 | 2 | ||||||||||||||||||||||||
| Gross Profit | 486 | 40,368 | 448 | 37,247 | 8 | 476 | 39,553 | 2 | ||||||||||||||||||||||||
| Operating Expenses | ||||||||||||||||||||||||||||||||
| Selling, General & Administrative expenses | 226 | 18,795 | 199 | 16,560 | 13 | 213 | 17,702 | 6.2 | ||||||||||||||||||||||||
| Research and Development expenses | 66 | 5,447 | 59 | 4,869 | 12 | 60 | 4,984 | 9 | ||||||||||||||||||||||||
| Impairment of non-current assets | 1 | 55 | 0 | 25 | 120 | 0 | 11 | 400 | ||||||||||||||||||||||||
| Other operating (income)/expense | (22 | ) | (1796 | ) | (4 | ) | (334 | ) | 438 | (9 | ) | (780 | ) | 130 | ||||||||||||||||||
| Results from operating activities | 215 | 17,867 | 194 | 16,127 | 11 | 212 | 17,636 | 1 | ||||||||||||||||||||||||
| Net finance (income)/expense | (15 | ) | (1225 | ) | 2 | 156 | (885 | ) | (9 | ) | (784 | ) | 56 | |||||||||||||||||||
| Share of profit of equity accounted investees | (1 | ) | (42 | ) | (2 | ) | (140 | ) | (70 | ) | (1 | ) | (43 | ) | (2 | ) | ||||||||||||||||
| Profit before income tax | 230 | 19,134 | 194 | 16,111 | 19 | 222 | 18,463 | 4 | ||||||||||||||||||||||||
| Income tax expense | 52 | 4,334 | 60 | 4983 | (13 | ) | 53 | 4,438 | (2 | ) | ||||||||||||||||||||||
| Profit for the period | 178 | 14,800 | 134 | 11,128 | 33 | 169 | 14,025 | 6 | ||||||||||||||||||||||||
| Diluted Earnings Per Share (EPS) | 1.07 | 88.78 | 0.81 | 66.89 | 33 | 1.01 | 84.22 | 5 |
| As % to revenues | Q2 FY24 | Q2 FY23 | Q1 FY24 | |||||||||
| Gross Profit | 58.7 | 59.1 | 58.7 | |||||||||
| SG&A | 27.3 | 26.3 | 26.3 | |||||||||
| R&D | 7.9 | 7.7 | 7.4 | |||||||||
| EBITDA | 31.7 | 30.6 | 31.7 | |||||||||
| PBT | 27.8 | 25.5 | 27.4 | |||||||||
| PAT | 21.5 | 17.6 | 20.8 |
| Q2 FY24 | Q2 FY23 | Q1 FY24 | ||||||||||||||||||||||
| Particulars | ($) | (Rs.) | ($) | (Rs.) | ($) | (Rs.) | ||||||||||||||||||
| Profit before Income Tax | 230 | 19,134 | 194 | 16,111 | 222 | 18,463 | ||||||||||||||||||
| Interest (income) / expense - Net* | (14 | ) | (1,166 | ) | 1 | 61 | (8 | ) | (685 | ) | ||||||||||||||
| Depreciation | 29 | 2,437 | 25 | 2,107 | 27 | 2,281 | ||||||||||||||||||
| Amortization | 16 | 1,353 | 12 | 1,018 | 16 | 1,302 | ||||||||||||||||||
| Impairment | 0 | 55 | 0 | 25 | 0 | 11 | ||||||||||||||||||
| EBITDA | 262 | 21,813 | 233 | 19,322 | 257 | 21,372 |
* Includes income from Investments
Key Balance Sheet Items
| As on 30 th Sep 2023 | As on 30 th Jun 2023 | As on 30 th Sep 2022 | ||||||||||||||||||||||
| Particulars | ($) | (Rs.) | ($) | (Rs.) | ($) | (Rs.) | ||||||||||||||||||
| Cash and cash equivalents and other investments | 840 | 69,784 | 736 | 61,162 | 353 | 29,306 | ||||||||||||||||||
| Trade receivables | 839 | 69,722 | 928 | 77,095 | 927 | 76,987 | ||||||||||||||||||
| Inventories | 681 | 56,592 | 631 | 52,398 | 590 | 49,042 | ||||||||||||||||||
| Property, plant, and equipment | 848 | 70,478 | 809 | 67,207 | 768 | 63,817 | ||||||||||||||||||
| Goodwill and Other Intangible assets | 497 | 41,278 | 509 | 42,306 | 434 | 36,084 | ||||||||||||||||||
| Loans and borrowings (current & non-current) | 159 | 13,230 | 151 | 12,520 | 208 | 17,289 | ||||||||||||||||||
| Trade payables | 367 | 30,485 | 333 | 27,682 | 274 | 22,778 | ||||||||||||||||||
| Equity | 3,046 | 2,53,086 | 2,952 | 2,45,259 | 2,482 | 2,06,225 |
Revenue Mix by Segment
| Q2 FY24 | Q2 FY23 | YoY | Q1 FY24 | QoQ | ||||||||||||||||
| Segment | (Rs.) | (Rs.) | Gr % | (Rs.) | Gr % | |||||||||||||||
| Global Generics | 61,084 | 55,946 | 9 | 60,083 | 2 | |||||||||||||||
| North America | 31,700 | 28,001 | 13 | 31,978 | (1 | ) | ||||||||||||||
| Europe | 5,286 | 4,199 | 26 | 5,071 | 4 | |||||||||||||||
| India | 11,860 | 11,500 | 3 | 11,482 | 3 | |||||||||||||||
| Emerging Markets | 12,163 | 12,246 | (1 | ) | 11,552 | 5 | ||||||||||||||
| Pharmaceutical Services and Active Ingredients (PSAI) | 7,034 | 6,434 | 9 | 6,709 | 5 | |||||||||||||||
| Others | 684 | 677 | 1 | 592 | 15 | |||||||||||||||
| Total | 68,802 | 63,057 | 9 | 67,384 | 2 |
Revenue Analysis [Q2 FY24]
Global Generics (GG)
Pharmaceutical Services and Active Ingredients
Income Statement Highlights:
All amounts in millions, except EPS
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
| Three months Ended Sep 30, 2023 | ||||
| Net cash generated from operating activities | 24,030 | |||
| Less: | ||||
| Taxes | (6102 | ) | ||
| Investments in PPE and Intangibles | (3450 | ) | ||
| Free Cash Flow before acquisition | 14,478 | |||
| Less: | ||||
| Acquisitions related pay-out | - | |||
| Free Cash Flow | 14,478 |
Operating working capital
| Quarter Ended Sep 30, 2023 | ||||
| Inventories | 56,592 | |||
| Trade Receivables | 69,722 | |||
| Less: | ||||
| Trade Payables | (30,485 | ) | ||
| Operating Working Capital | 95,829 |
| Quarter Ended Sep 30, 2023 | ||||
| Cash and cash equivalents | 13,539 | |||
| Investments | 56,245 | |||
| Short-term borrowings | (5,847 | ) | ||
| Long-term borrowings, non-current | (6043 | ) | ||
| Less: | ||||
| Restricted cash balance - Unclaimed dividend | 89 | |||
| Lease liabilities (included in Long-term borrowings, non-current) | (2243 | ) | ||
| Equity Investments (included in Investments) | 988 | |||
| Net Cash Surplus | 59,060 |
All amounts in millions, except EPS
Computation of Return on Capital Employed
| Year Ended Sep 30, 2023 | ||||
| Profit before tax | 19,134 | |||
| Less: | ||||
| Interest and Investment Income (Excluding forex gain/loss) | 1,166 | |||
| Earnings Before Interest and taxes [A] | 17,968 | |||
| Average Capital Employed [B] | 1,83,550 | |||
| Return on Capital Employed (A/B) (Ratio) | 38.9 | % |
Computation of capital employed.
| Year Ended Sep 30, 2023 | Year Ended Mar 31, 2023 | |||||||
| Property Plant and Equipment | 70,478 | 66,462 | ||||||
| Intangibles | 37,055 | 30,849 | ||||||
| Goodwill | 4,223 | 4,245 | ||||||
| Investment in equity accounted associates | 4,069 | 4,702 | ||||||
| Other Current Assets | 22,423 | 20,069 | ||||||
| Other investments | 1,855 | 660 | ||||||
| Other non-current assets | 812 | 800 | ||||||
| Inventories | 56,592 | 48,670 | ||||||
| Trade Receivables | 69,722 | 72,485 | ||||||
| Derivative Financial Instruments | 189 | 1,095 | ||||||
| Less: | ||||||||
| Other Liabilities | 40,297 | 42,320 | ||||||
| Provisions | 5,298 | 5,513 | ||||||
| Trade payables | 30,485 | 26,444 | ||||||
| Operating Capital Employed | 1,91,341 | 1,75,760 | ||||||
| Average Capital Employed | 1,83,550 |
Computation of EBITDA
Refer page no. 2 for EBITDA computations.
Earnings Call Details (07:30 pm IST, 10:00 am EDT,
The management of the Company will host an Earnings
call to discuss the Company's financial performance and answer any questions from the participants.
Pre-register with the below link and join without
waiting for the operator.
| 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 Nov 3rd, 2023. For play back dial in phone No: +91 22 7194 5757, and Playback Code is 02796.
Transcript: 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, 2022. The company assumes no obligation to update any information
contained herein." The company assumes no obligation to update any information contained herein.