HYDERABAD, India–(BUSINESS WIRE)–$RDY #DRREDDY–Dr. Reddy’s Laboratories Ltd. (BSE: 500124 | NSE: DRREDDY | NYSE: RDY | NSEIFSC: DRREDDY) today announced its consolidated financial results for the quarter ended June 30, 2023. The information mentioned in this release is based on consolidated financial statements under International Financial Reporting Standards (IFRS).
Revenues | Rs. 67,384 Mn | |||
| [Up: 29%* YoY; Up: 7%* QoQ] | |||
|
| |||
Gross Margin | 58.7% | |||
| [Q1 FY23: 49.9%; Q4 FY23: 57.2%] | |||
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| |||
SG&A Expenses | Rs. 17,702 Mn | |||
| [Up: 14% YoY; Down: 2% QoQ] | |||
R&D Expenses | Rs. 4,984 Mn | |||
[7.4% of Revenues] | ||||
|
| |||
EBITDA | Rs. 21,372 Mn | |||
| [31.7% of Revenues] | |||
|
| |||
Profit before Tax | Rs. 18,463 Mn | |||
| [Up: 26%^ YoY; Up: 39%^ QoQ] | |||
|
| |||
Profit after Tax | Rs. 14,025 Mn | |||
| [Up: 18% YoY; Up: 46% QoQ] |
* Excluding brand divestment income during the previous periods, Q1 FY24 Sales YoY growth is 35% and QoQ growth is 12%
^ Excluding one offs (settlement income during the current and previous year and brand divestment income during the previous periods), Q1 FY24 PBT YoY growth is 165% and QoQ growth is 68%
Commenting on the results, Co-Chairman & MD, G V Prasad said: “We delivered strong sales growth and witnessed robust margin expansion in Q1FY24 driven by market share gains & new product momentum in our US generics business and superior performance in Russia. We are on track in executing our strategy, delivering growth while continuing to invest in future growth drivers and innovation to create sustainable value.”
All amounts in millions, except EPS. All US dollar amounts based on convenience translation rate of 1 USD = Rs. 82.06
Dr. Reddy’s Laboratories Limited and Subsidiaries | ||||||||||||||||
Consolidated Income Statement | ||||||||||||||||
Particulars | Q1 FY24 | Q1 FY23 |
YoY | Q4 FY23 |
QoQ | |||||||||||
($) | (Rs.) | ($) | (Rs.) | ($) | (Rs.) | |||||||||||
Revenues | 821 |
| 67,384 |
| 636 |
| 52,154 |
| 29 |
| 767 |
| 62,968 |
| 7 |
|
Cost of Revenues | 339 |
| 27,831 |
| 319 |
| 26,148 |
| 6 |
| 329 |
| 26,971 |
| 3 |
|
Gross Profit | 482 |
| 39,553 |
| 317 |
| 26,006 |
| 52 |
| 439 |
| 35,997 |
| 10 |
|
Operating Expenses |
|
|
|
|
|
|
|
| ||||||||
Selling, General & Administrative expenses | 216 |
| 17,702 |
| 189 |
| 15,493 |
| 14 |
| 219 |
| 17,992 |
| (2 | ) |
Research and Development expenses | 61 |
| 4,984 |
| 53 |
| 4,325 |
| 15 |
| 65 |
| 5,366 |
| (7 | ) |
Impairment of non-current assets | 0 |
| 11 |
| 0 |
| 0 |
| 7 |
| 540 |
| (98 | ) | ||
Other operating (income)/expense | (10 | ) | (780 | ) | (73 | ) | (6024 | ) | (87 | ) | (3 | ) | (281 | ) | 178 |
|
Results from operating activities | 215 |
| 17,636 |
| 149 |
| 12,212 |
| 44 |
| 151 |
| 12,380 |
| 42 |
|
Net finance (income)/expense | (10 | ) | (784 | ) | (29 | ) | (2349 | ) | (67 | ) | (10 | ) | (799 | ) | (2 | ) |
Share of profit of equity accounted investees | (1 | ) | (43 | ) | (1 | ) | (94 | ) | (54 | ) | (1 | ) | (76 | ) | (43 | ) |
Profit before income tax | 225 |
| 18,463 |
| 179 |
| 14,655 |
| 26 |
| 162 |
| 13,255 |
| 39 |
|
Income tax expense | 54 |
| 4,438 |
| 34 |
| 2779 |
| 60 |
| 45 |
| 3,663 |
| 21 |
|
Profit for the period | 171 |
| 14,025 |
| 145 |
| 11,876 |
| 18 |
| 117 |
| 9,592 |
| 46 |
|
Diluted Earnings Per Share (EPS) | 1.03 |
| 84.22 |
| 0.87 |
| 71.40 |
| 18 |
| 0.70 |
| 57.62 |
| 46 |
|
As % to revenues | Q1 FY24 | Q1 FY23 | Q4 FY23 | ||||||
Gross Profit | 58.7 | 49.9 | 57.2 | ||||||
SG&A | 26.3 | 29.7 | 28.6 | ||||||
R&D | 7.4 | 8.3 | 8.5 | ||||||
EBITDA | 31.7 | 34.1 | 25.9 | ||||||
PBT | 27.4 | 28.1 | 21.1 | ||||||
PAT | 20.8 | 22.8 | 15.2 | ||||||
EBITDA Computation | ||||||||
Particulars | Q1 FY24 | Q1 FY23 | Q4 FY23 | |||||
($) | (Rs.) | ($) | (Rs.) | ($) | (Rs.) | |||
Profit before Income Tax | 225 | 18,463 | 179 | 14,655 | 162 | 13,255 | ||
Interest (income) / expense – Net* | (8) | (685) | 1 | 84 | (8) | (673) | ||
Depreciation | 28 | 2,281 | 25 | 2,050 | 27 | 2,213 | ||
Amortization | 16 | 1,302 | 12 | 1,000 | 12 | 977 | ||
Impairment | 0 | 11 | 0 | 0 | 7 | 540 | ||
EBITDA | 260 | 21,372 | 217 | 17,789 | 199 | 16,312 | ||
* Includes income from Investments | ||||||||
All amounts in millions, except EPS. All US dollar amounts based on convenience translation rate of 1 USD = Rs. 82.06
Key Balance Sheet Items | ||||||
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Particulars | As on 30th Jun 2023 |
| As on 31st Mar 2023 |
| As on 30th Jun 2022 |
|
($) | (Rs.) | ($) | (Rs.) | ($) | (Rs.) | |
Cash and cash equivalents and other investments | 745 | 61,162 | 761 | 62,456 | 432 | 35,468 |
Trade receivables | 939 | 77,095 | 883 | 72,486 | 893 | 73,274 |
Inventories | 639 | 52,398 | 593 | 48,670 | 631 | 51,810 |
Property, plant and equipment | 819 | 67,207 | 810 | 66,462 | 778 | 63,826 |
Goodwill and Other Intangible assets | 516 | 42,306 | 428 | 35,094 | 441 | 36,213 |
Loans and borrowings (current & non-current) | 153 | 12,520 | 164 | 13,472 | 301 | 24,666 |
Trade payables | 337 | 27,682 | 322 | 26,444 | 305 | 25,052 |
Equity | 2,989 | 2,45,259 | 2,815 | 2,30,991 | 2,442 | 2,00,389 |
Revenue Mix by Segment | |||||
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Segment | Q1 FY24 | Q1 FY23 |
YoY | Q4 FY23 |
QoQ |
(Rs.) | (Rs.) | (Rs.) | |||
Global Generics | 60,083 | 44,324 | 36% | 54,257 | 11% |
North America | 31,978 | 17,815 | 79% | 25,321 | 26% |
Europe | 5,071 | 4,141 | 22% | 4,960 | 2% |
India | 11,482 | 13,324 | -14% | 12,834 | -11% |
Emerging Markets | 11,552 | 9,043 | 28% | 11,142 | 4% |
Pharmaceutical Services and Active Ingredients (PSAI) | 6,709 | 7,090 | -5% | 7,787 | -14% |
Others | 592 | 740 | -20% | 924 | -36% |
Total | 67,384 | 52,154 | 29% | 62,968 | 7% |
Revenue Analysis [Q1 FY24]
Global Generics (GG)
North America
Europe
India
Emerging Markets
– Revenue from Russia for the quarter at Rs. 5.6 billion, YoY growth of 75% and QoQ growth of 9%. YoY growth was driven by uptick in base business, price increase and biosimilars. This was further aided by low base in previous year. QoQ growth was primarily driven by increase in volumes of existing products.
– Revenue from other CIS countries and Romania for the year at Rs. 2.0 billion, YoY growth of 2% and QoQ decline of 14%. YoY growth, primarily on account of price increases on certain products, was offset with decline in base business volumes. QoQ decline was mainly on account of decline in volumes of existing products.
– Revenue from Rest of World (RoW) territories for the year at Rs. 4.0 billion, YoY growth of 1% and QoQ growth of 8%. YoY growth, led by new product launches, was offset by price erosion and lower base business volumes. QoQ growth was mainly driven by new product launches and increase in volumes of existing products.
Pharmaceutical Services and Active Ingredients (PSAI)
Income Statement Highlights:
Other 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, as the case may be, 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 | ||
Free Cash Flow | ||
| Three months Ended June 30, 2023 | |
Net cash generated from operating activities | 13,634 |
|
Less: |
| |
Taxes | (2,384 | ) |
Investments in PPE and Intangibles | (4,512 | ) |
Free Cash Flow before acquisition | 6,738 |
|
Less: |
| |
Acquisitions related pay-out | (7,640 | ) |
Free Cash Flow | (902 | ) |
Operating working capital | ||
| Quarter Ended June 30, 2023 | |
Inventories | 52,398 |
|
Trade Receivables | 77,095 |
|
Less: |
| |
Trade Payables | (27,682 | ) |
Operating Working Capital | 101,811 |
|
Net cash surplus | ||
| Quarter Ended June 30, 2023 | |
Cash and cash equivalents | 7,228 |
|
Investments | 53,934 |
|
Short-term borrowings | (6,468 | ) |
Long-term borrowings, non-current | (4,930 | ) |
Less: |
| |
Restricted cash balance – Unclaimed dividend | 84 |
|
Lease liabilities (included in Long-term borrowings, non-current) | (1,130 | ) |
Equity Investments (included in Investments) | 957 |
|
Net Cash Surplus | 49,853 |
|
All amounts in millions, except EPS
Computation of Return on Capital Employed | |
| Year Ended June 30, 2023 |
Profit before tax | 18,463 |
Less: | |
Interest and Investment Income (Excluding forex gain/loss) | 685 |
Earnings Before Interest and taxes [A] | 17,778 |
| |
Average Capital Employed [B] | 1,84,327 |
| |
Return on Capital Employed (A/B) (Ratio) | 38.6% |
Computation of capital employed | ||
| ||
| Year Ended June 30, 2023 | Year Ended March 31, 2023 |
Property Plant and Equipment | 67,207 | 66,462 |
Intangibles | 38,068 | 30,849 |
Goodwill | 4,238 | 4,245 |
Investment in equity accounted associates | 4,002 | 4,702 |
Other Current Assets | 18,511 | 20,069 |
Other investments | 902 | 660 |
Other non-current assets | 821 | 800 |
Inventories | 52,398 | 48,670 |
Trade Receivables | 77,095 | 72,485 |
Derivative Financial Instruments | 1,760 | 1,095 |
Less: |
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Other Liabilities | 38,973 | 42,320 |
Provisions | 5,451 | 5,513 |
Trade payables | 27,682 | 26,444 |
Operating Capital Employed | 1,92,896 | 1,75,760 |
Average Capital Employed | 1,84,327 |
Computation of EBITDA
Refer page no. 2 for EBITDA computations.
Earnings Call Details (07:30 pm IST, 10:00 am EDT, July 26, 2023)
The management of the Company will host an Earnings call to discuss the Company’s financial performance and answer any questions from the participants.
Conference Joining Information |
Option 1: Express Join with DiamondPass™ |
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 Aug 2nd, 2023. For play back dial in phone No: +91 22 7194 5757, and Playback Code is 75822.
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 ahead 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, (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, 2023. The company assumes no obligation to update any information contained herein.”
Contacts
INVESTOR RELATIONS
RICHA PERIWAL
richaperiwal@drreddys.com
MEDIA RELATIONS
USHA IYER
ushaiyer@drreddys.com
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