Le Lézard
Classified in: Health, Science and technology, Business, Covid-19 virus
Subjects: EARNINGS, Conference Call, Webcast

Dr. Reddy's Q2 FY24 Financial Results


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."

All amounts in millions, except EPS All US dollar amounts based on convenience translation rate of 1 USD = Rs. 83.08

Dr. Reddy's Laboratories Limited and Subsidiaries

 

Consolidated Income Statement

 

Particulars

Q2 FY24

Q2 FY23

YoY
Gr %

Q1 FY24

QoQ
Gr%

($)

(Rs.)

($)

(Rs.)

($)

(Rs.)

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

EBITDA Computation

 

Particulars

Q2 FY24

 

Q2 FY23

 

Q1 FY24

($)

(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

All amounts in millions, except EPS All US dollar amounts based on convenience translation rate of 1 USD = Rs. 83.08
 

Key Balance Sheet Items

 

Particulars

As on 30th Sep
2023

As on 30th Jun
2023

As on 30th Sep
2022

($)

(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

 

Segment

Q2 FY24

Q2 FY23

YoY
Gr %

Q1 FY24

QoQ
Gr %

(Rs.)

(Rs.)

(Rs.)

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)

North America

Europe

India

Emerging Markets

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 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
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

Net cash surplus

 

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, Oct 27, 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 DiamondPasstm

Pre-register with the below link and join without waiting for the operator.

https://services.choruscall.in/DiamondPassRegistration/register?confirmationNumber=7967211&linkSecurityString=2c6ede051b

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.


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