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Dr. Reddy’s Q3 & 9M FY24 Financial Results

HYDERABAD, India–(BUSINESS WIRE)–$RDY #9MFY24–Dr. Reddy’s Laboratories Ltd. (BSE: 500124 | NSE: DRREDDY | NYSE: RDY | NSEIFSC: DRREDDY) today announced its consolidated financial results for the quarter and nine months ended December 31, 2023. The information mentioned in this release is based on consolidated financial statements under International Financial Reporting Standards (IFRS).


Q3FY24 9MFY24
 
Revenues Rs. 72,148 Mn
[Up: 7% YoY; Up: 5% QoQ]
Rs. 208,334 Mn
[Up: 14% YoY; Up]
 
Gross Margin 58.5%
[Q3FY23: 59.2%; Q2FY24: 58.7%]
58.6%
[9M FY23: 56.5%]
 
SG&A Expenses Rs. 20,228 Mn
[Up: 12% YoY; 8% QoQ]
Rs. 56,725 Mn
[Up: 13% YoY]
 
R&D Expenses Rs. 5,565 Mn
[7.7% of Revenues]
Rs. 15,996 Mn
[7.7% of Revenues]
 
EBITDA Rs. 21,107 Mn
[29.3% of Revenues]
Rs. 64,278 Mn
[30.9% of Revenues]
 
Profit before Tax Rs. 18,257 Mn
[Up: 12% YoY; Down: 5% QoQ]
Rs. 55,854 Mn
[Up: 19% YoY]
 
Profit after Tax Rs. 13,789 Mn
[Up: 11% YoY; Down: 7% QoQ]
Rs. 42,614 Mn
[Up: 20% YoY]

Commenting on the results, Co-Chairman & MD, G V Prasad said: We delivered another quarter of highest-ever sales and robust financial performance aided by new products performance and base business market share gain in the U.S., new products launch momentum and strong performance in Europe. We continue to strengthen our core businesses and invest in innovative products including strategic collaborations for novel molecules to meet unmet needs of patients.

All amounts in millions, except EPS

All US dollar amounts based on convenience translation rate of 1 USD = Rs. 83.19

Dr. Reddy’s Laboratories Limited & Subsidiaries

Revenue Mix by Segment [Q3FY24]

Particulars

Q3FY24

 

Q3FY23

 

YoY

 

Q2FY24

 

QoQ

(Rs.)

 

(Rs.)

 

Gr %

 

(Rs.)

 

Gr%

Global Generics

63,095

 

59,241

 

7%

 

61,084

 

3%

North America

33,492

 

30,567

 

9%

 

31,700

 

5%

Europe

4,970

 

4,303

 

15%

 

5,286

 

-6%

India

11,800

 

11,274

 

5%

 

11,860

 

-1%

Emerging Markets

12,833

 

13,097

 

-2%

 

12,163

 

6%

Pharmaceutical Services and Active Ingredients (PSAI)

7,839

 

7,758

 

1%

 

7,034

 

11%

Others

1,214

 

701

 

73%

 

684

 

78%

Total

72,148

 

67,700

 

7%

 

68,802

 

5%

Revenue Mix by Segment [9M FY24]

Particulars

9MFY24

 

9MFY23

 

YoY

(Rs.)

 

(Rs.)

 

Gr%

Global Generics

184,262

 

159,511

 

16%

North America

97,245

 

76,383

 

27%

Europe

15,326

 

12,644

 

21%

India

35,141

 

36,113^

 

-3%

Emerging Markets

36,550

 

34,371

 

6%

Pharmaceutical Services and Active Ingredients (PSAI)

21,582

 

21,282

 

1%

Others

2,490

 

2,119

 

18%

Total

208,334

 

182,911

 

14%

^ includes divestment income in India in Q1FY23, excluding which India YoY growth is at 4% and total company growth is at 15%

Consolidated Income Statement [Q3FY24]

Particulars

Q3FY24

 

Q3FY23

 

YoY

 

Q2FY24

 

QoQ

($)

 

(Rs.)

 

($)

 

(Rs.)

 

Gr %

 

($)

 

(Rs.)

 

Gr%

Revenues

867

 

72,148

 

814

 

67,700

 

7

 

827

 

68,802

 

5

Cost of Revenues

360

 

29,945

 

332

 

27,607

 

8

 

342

 

28,434

 

5

Gross Profit

507

 

42,203

 

482

 

40,093

 

5

 

485

 

40,368

 

5

% of revenues

 

 

58.5%

 

 

 

59.2%

 

 

 

 

 

58.7%

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, General & Administrative expenses

243

 

20,228

 

216

 

17,981

 

12

 

226

 

18,795

 

8

% of revenues

 

 

28.0%

 

 

 

26.6%

 

 

 

 

 

27.3%

 

 

Research & Development expenses

67

 

5,565

 

58

 

4,821

 

15

 

65

 

5,447

 

2

% of revenues

 

 

7.7%

 

 

 

7.1%

 

 

 

 

 

7.9%

 

 

Impairment of non-current assets

1

 

110

 

2

 

134

 

(18)

 

1

 

55

 

100

Other operating (income)/expense

(12)

 

(967)

 

9

 

732

 

(232)

 

(22)

 

(1796)

 

(46)

Results from operating activities

208

 

17,267

 

197

 

16,425

 

5

 

215

 

17,867

 

(3)

Net finance (income)/expense

(12)

 

(963)

 

2

 

139

 

(793)

 

(15)

 

(1225)

 

(21)

Share of profit of equity accounted investees, net of tax

(0)

 

(27)

 

(1)

 

(60)

 

(55)

 

(1)

 

(42)

 

(36)

Profit before income tax

219

 

18,257

 

196

 

16,346

 

12

 

230

 

19,134

 

(5)

% of revenues

 

 

25.3%

 

 

 

24.1%

 

 

 

 

 

27.8%

 

 

Income tax expense

54

 

4,468

 

47

 

3875

 

15

 

52

 

4,334

 

3

Profit for the period

166

 

13,789

 

150

 

12,471

 

11

 

178

 

14,800

 

(7)

% of revenues

 

 

19.1%

 

 

 

18.4%

 

 

 

 

 

21.5%

 

 

 

Diluted Earnings Per Share (EPS)

0.99

 

82.68

 

0.90

 

74.95

 

10

 

1.07

 

88.78

 

(7)

EBITDA Computation [Q3FY24]

*Includes income from Investments

Particulars

Q3FY24

 

Q3FY23

 

Q2FY24

($)

 

(Rs.)

 

($)

 

(Rs.)

 

($)

 

(Rs.)

Profit before Income Tax

219

 

18,257

 

196

 

16,346

 

230

 

19,134

Interest (income) / expense – Net*

(12)

 

(1,030)

 

(1)

 

(93)

 

(14)

 

(1,166)

Depreciation

29

 

2,437

 

27

 

2,245

 

29

 

2,437

Amortization

16

 

1,333

 

12

 

1,026

 

16

 

1,353

Impairment

1

 

110

 

2

 

134

 

1

 

55

EBITDA

254

 

21,107

 

236

 

19,658

 

262

 

21,813

% of revenues

 

 

29.3%

 

 

 

29.0%

 

 

 

31.7%

Consolidated Income Statement [9MFY24]

Particulars

9MFY24

9MFY23

YoY

($)

(Rs.)

($)

(Rs.)

Gr %

Revenues

2,504

 

208,334

 

2,199

 

182,911

 

14

Cost of Revenues

1,036

 

86,210

 

956

 

79,565

 

8

Gross Profit

1,468

 

122,124

 

1,242

 

103,346

 

18

% of revenues

 

 

58.6%

 

 

 

56.5%

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

Selling, General & Administrative expenses

682

 

56,725

 

601

 

50,034

 

13

% of revenues

 

 

27.2%

 

 

 

27.4%

 

 

Research & Development expenses

192

 

15,996

 

168

 

14,015

 

14

% of revenues

 

 

7.7%

 

 

 

7.7%

 

 

Impairment of non-current assets

2

 

176

 

2

 

159

 

11

Other operating (income)/expense

(43)

 

(3,543)

 

(68)

 

(5,626)

 

(37)

Results from operating activities

634

 

52,770

 

538

 

44,764

 

18

Net finance (income)/expense

(36)

 

(2,972)

 

(25)

 

(2,054)

 

45

Share of profit of equity accounted investees

(1)

 

(112)

 

(4)

 

(294)

 

(62)

Profit before income tax

671

 

55,854

 

566

 

47,112

 

19

% of revenues

 

 

26.8%

 

 

 

25.8%

 

 

Income tax expense

159

 

13,240

 

140

 

11,637

 

14

Profit for the period

512

 

42,614

 

426

 

35,475

 

20

% of revenues

 

 

20.5%

 

 

 

19.4%

 

 

Diluted Earnings Per Share (EPS)

3.07

 

255.68

 

2.56

 

213.24

 

20

EBITDA Computation [9MFY24]

*Includes income from Investments

Particulars

9MFY24

9MFY23

($)

(Rs.)

($)

(Rs.)

Profit before Income Tax

671

 

55,854

 

566

 

47,112

Interest (income) / expense – Net*

-35

 

-2,881

 

1

 

52

Depreciation

86

 

7,155

 

77

 

6,402

Amortization

48

 

3,974

 

37

 

3,045

Impairment

2

 

176

 

2

 

159

EBITDA

773

 

64,278

 

682

 

56,769

% of revenues

 

 

30.9%

 

 

 

31.0%

Key Balance Sheet Items

Particulars

As on 31st Dec 2023

As on 30th Sep 2023

As on 31st Dec 2022

($)

(Rs.)

($)

(Rs.)

($)

(Rs.)

Cash and cash equivalents and other investments

922

 

76,665

 

839

 

69,784

 

603

 

50,164

Trade receivables

943

 

78,417

 

838

 

69,722

 

902

 

75,046

Inventories

731

 

60,796

 

680

 

56,592

 

593

 

49,326

Property, plant, and equipment

875

 

72,795

 

847

 

70,478

 

781

 

64,996

Goodwill and Other Intangible assets

495

 

41,192

 

496

 

41,278

 

426

 

35,401

Loans and borrowings (current & non-current)

239

 

19,851

 

159

 

13,230

 

212

 

17,663

Trade payables

374

 

31,113

 

366

 

30,485

 

313

 

26,023

Equity

3,220

 

267,850

 

3,042

 

253,086

 

2,648

 

220,273

Key Business Highlights [Q3FY24]

ESG & other Highlights [Q3FY24]

Revenue Analysis [Q3FY24]

Global Generics (GG)

North America

Europe

India

Emerging Markets

Pharmaceutical Services and Active Ingredients (PSAI)

Income Statement Highlights:

Other Highlights:

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

Free Cash Flow

Particulars

Three months ended Dec. 31, 2023

(Rs.)

Net cash generated from operating activities

10,762

Less:

 

Taxes

6027

Investments in PPE and Intangibles

4518

Free Cash Flow

217

Operating working capital

Particulars

As on 31st Dec 2023

(Rs.)

Inventories

60,796

Trade Receivables

78,417

Less:

 

Trade Payables

31,113

Operating Working Capital

108,100

Net cash surplus

Particulars

As on 31st Dec 2023

(Rs.)

Cash and cash equivalents

7,535

Investments

69,130

Short-term borrowings

(12,343)

Long-term borrowings, non-current

(6,152)

Less:

 

Restricted cash balance – Unclaimed dividend

122

Lease liabilities (included in Long-term borrowings, non-current)

(2,352)

Equity Investments (Included in Investments)

1328

Net Cash Surplus

59,072

Computation of Return on Capital Employed

Particulars

As on 31st Dec 2023

(Rs.)

Profit before tax

18,257

Less:

 

Interest and Investment Income (Excluding forex gain/loss)

1,030

Earnings Before Interest and taxes [A]

17,227

 

 

Average Capital Employed [B]

191,125

 

 

Annualized Return on Capital Employed (A/B) (Ratio)

37%

Computation of capital employed

Particulars

Year Ended

Dec 31, 2023

Mar 31, 2023

Property Plant and Equipment

72,795

 

66,462

Intangibles

36,905

 

30,849

Goodwill

4,287

 

4,245

Investment in equity accounted associates

4,218

 

4,702

Other Current Assets

23,512

 

20,069

Other investments

4,115

 

660

Other non-current assets

1,128

 

800

Inventories

60,796

 

48,670

Trade Receivables

78,417

 

72,485

Derivative Financial Instruments

-16

 

1,095

Less:

 

 

 

Other Liabilities

43,159

 

42,320

Provisions

5,394

 

5,513

Trade payables

31,113

 

26,444

Operating Capital Employed

206,491

 

175,760

Average Capital Employed

191,125

Computation of EBITDA

Refer page no. 3 & 4.

Earnings Call Details

The management of the Company will host an Earnings call to discuss the Company’s financial performance and answer any questions from the participants.

Date: January 30, 2024

Time: 19:30 pm IST | 10:00 am EDT

Conference Joining Information

Option 1: Pre-register with the below link and join without waiting for the operator

https://services.choruscall.in/DiamondPassRegistration/register?confirmationNumber=1745002&linkSecurityString=a262ce748

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 February 6th, 2024. For play back dial in phone No: +91 22 7194 5757, and Playback Code is 61003.

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, 2023. The company assumes no obligation to update any information contained herein.” The company assumes no obligation to update any information contained herein.

Contacts

INVESTOR RELATIONS

RICHA PERIWAL

richaperiwal@drreddys.com

AISHWARYA SITHARAM

aishwaryasitharam@drreddys.com

MEDIA RELATIONS

USHA IYER

ushaiyer@drreddys.com

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