Pharma major Dr Reddy's Laboratories on January 25 reported a 77 percent growth in consolidated net profit at Rs 1,247 crore for the quarter ended December 31, 2022 as against Rs 707 crore a year ago. On a sequential basis, the profit grew 12 percent.
The Hyderabad-based drugmaker also reported a 27 percent increase in consolidated revenue at Rs 6,770 crore as against Rs 5,320 crore in the year-ago period, while it was up 7 percent sequentially.
"Our strong financial performance was supported by growth in the US and the Russia markets. We continue to strengthen our development pipeline to reach more patients globally," Co-chairman & MD, G V Prasad, commented on its performance.
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EBITDA for the quarter stood at Rs 1,966 crore in December 2022 - up 55 percent - as against Rs 1,266 crore in the previous corresponding quarter. EBITDA margin expanded 520 bps Y-o-Y to 29 percent, while it contracted 160 basis points sequentially.
The gross margins for the quarter at 59.2 percent were 540 basis points higher from 53.8 percent a year ago. The gross margin in the quarter ended September 2022 stood at 59.1 percent.
SG&A and R&D Expenses
The selling, general and administrative (SG&A) expenses for the quarter as a percentage of revenue were down to 26.6 percent from 29.0 percent in the year-ago period and up 30bps Q-o-Q.
The expenses on research and development (R&D) were down by 70bps Y-o-Y at 7.1 percent. It was at 7.7 percent in the previous quarter.
Revenue mix
North America continued to be the largest contributor to the company’s revenues with 45 percent share and was followed by emerging markets (19 percent share), India (17 percent share), PSAI (11 percent), Europe at 6 percent and others at 1 percent of the total revenue.
The company generated Rs 3,060 crore of its revenue from North America, with a Y-o-Y growth of 64 percent and Q-o-Q growth of 9 percent driven by new products launches, increase in volumes and a favourable forex movement, which was partly offset by price erosion.
Revenue from emerging markets at Rs 1,310 crore was up 14 percent Y-o-Y and 7 percent Q-o-Q. Within emerging markets, the yearly growth was driven by 45 percent growth in Russia, primarily owing to increase in volumes and prices, new product launches, and favorable forex rates.
India, with revenues of Rs 1,130 crore, grew 10 percent year-on-year mainly led by increase in sales prices and new product launches, partly offset by reduction in volumes for certain products. The revenues were down 2 percent on a sequential basis.
Europe managed to grow at 6 percent Y-o-Y and 2 percent Q-o-Q to Rs 430 crore.
The Pharmaceutical Services and Active Ingredients (PSAI) business of Dr Reddy's generated revenues of Rs 780 crore for the quarter, up 7 percent Y-o-Y and 21 percent QoQ mainly owing to increase in volumes and product launches.
Other highlights
The company incurred a capex of Rs 290 crore during the quarter and generated a free cash flow of Rs 1,980 crore.
The net cash surplus at the end of the quarter stood at Rs 3,400 crore.
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