Views on Dr. Reddy’s Laboratories Ltd. Q4FY24 Result

The company has delivered healthy revenue growth during the quarter, aided by new product performance, an increase in the volume of base business in the US, new product launch momentum, and strong performance in Europe and partly offset by price erosion in the US and Europe. During the quarter, the company launched five new products in the US market. The company is focused on higher investments in sales & marketing activities to strengthen existing brands and new business initiatives including scaling up OTC and consumer health & wellness businesses, digitalization initiatives and building strong commercial capabilities. The company will also actively look for new investment avenues for growth across all the business segments and strengthen its R&D in the biosimilar products pipeline, development efforts across generics, and novel oncology assets. DrReddy’s long-term growth outlook remains intact and we expect the company to continue to deliver robust performance in the upcoming quarters, led by new product launches, market share gains and an increased volume of the base business.

DrReddy’s Laboratories LtdQ4FY24 Result First Cut – Revenue and PAT above market expectations

  • Company reported revenue growth of 12.6% YoY / down 1.7% QoQ to Rs. 7,114 crores and above market expectations of Rs. 6,927 crores.
  • The Global Generics (GG) segment witnessed a revenue growth of 13.0% YoY / down 3.0% QoQ to Rs. 6,120 crores. This was primarily driven by increased base business volumes and new product launches, despite price erosion in certain markets. The sequential decline can be attributed to a change in product mix, price erosion, and an unfavourable forex impact.
  • EBITDA increased 19.4% YoY / down 9.5% QoQ to Rs. 1,831 crores, while EBITDA margin stood at 25.7% (up 145bps YoY / down 221bps QoQ) in Q4FY24, owing to an expansion in gross margins by 65 bps YoY to 70.6% led by improvement in product mix and productivity cost savings, partially offset by income from non-core brands divested in the previous period.
  • Profit after Tax stood at Rs. 1,310 crores (up 36.4% YoY / down 5.1% QoQ) in Q4FY24, above market expectations of Rs. 1,215 crores. PAT margin came at 18.4% versus 19.1% in the previous quarter.
  • R&D expenses stood at Rs. 690 crores (9.7% of sales), and the company continued to invest in R&D to build a healthy pipeline of new products across markets for both small molecules and biosimilars.
  • During the quarter, the company filed 9 ANDAs with the USFDA. As of 31 March 2024, 86 generic filings are cumulatively pending approval with the USFDA (81 ANDAs and 5 NDAs under 505(b)(2) route).
  • The company recommended a final dividend of Rs. 40 per equity share.

Disclaimer: This press release serves for informational purposes only and does not constitute professional advice. Any reliance on the information provided is at the reader’s discretion.

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