Pharma major Dr Reddy’s Laboratories (DRL) on Friday posted Q2 profit at Rs 1482.20 crore, up 30 per cent in comparison to Rs 1114.20 crore during the corresponding quarter of FY23, surpassing estimates. It posted revenue from operations at Rs 6902.60 crore, up 9 per cent as against Rs 6331.80 crore during the quarter ended September 2022. The company EBITDA stood at Rs 2181 crore. The capital expenditure during the quarter was at Rs 320 crore and free cash-flow during the period was at Rs 1450 crore (before acquisition payout). Meanwhile, net cash surplus for the company stood at Rs 5910 crore as on September 30, 2023.
According to a CNBC TV18 poll, Dr Reddy’s Laboratories was expected to post Q2 profit at Rs 1272 crore and revenue at Rs 6820 crore.
“We delivered another quarter of strong results with highest ever sales and profits, driven by market share gains and 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,” said GV Prasad, Co-Chairman & MD, Dr Reddy’s Laboratories.
Research & development (R&D) expenses in Q2FY24 was at Rs 540 crore, 7.9 per cent of the total revenue. “R&D investments are driven by ongoing clinical trials on differentiated assets, as well as other developmental efforts to build a healthy pipeline of new products across our markets for both small molecules and biosimilars,” the company said.
Q2 performance across verticals, markets
For the Global Generics business, DRL posted Q2 revenue at Rs 6110.00 crore, up 9 per cent YoY, driven by growth in North America and Europe.
North America Q2 revenue was at Rs 3170 crore, up 13 per cent YoY. The growth was on account of growing momentum in our core portfolio, Mayne integration, favorable move from foreign exchange which was partly offset by price erosion. During the quarter, the company launched 4 new products in the US, filed 2 new ANDAs with the US Food and USFDA. As of 30th Sep 2023, cumulatively 79 generic filings are pending for approval with the USFDA.
Europe market posted Q2 revenue at Rs 530 crore, up 26 per cent YoY. The growth was driven by leveraging existing portfolio, contribution from new products and favorable forex which was partly offset by price erosion.
The India operations recorded a revenue growth of 3 per cent on-year to Rs 1190 crore, largely driven by pricing, new launches and partly offset by NLEM impact and muted demand due to weak acute season.
The emerging markets recorded Q2 revenue at Rs 1220 crore, down 1 per cent on-year. Among emerging markets, revenue from Russia was at Rs 580 crore, down 3 per cent YoY due to currency devaluation, excluding which, there was a YoY growth of 4 per cent mainly driven by favorable pricing. Revenue from other CIS countries and Romania for the year was at Rs 22o crore, up 1 per cent YoY primarily on account of price increases on certain products, favorable move from foreign exchange which was partly offset by decline in base business volumes. Revenue from Rest of World (RoW) territories for the year was at Rs 420 crore, up 1 per cent YoY led by new product launches, which was partly offset by pricing pressure and lower base business.
Meanwhile, the Pharmaceutical Services and Active ingredients segment recorded Q2FY24 revenue at Rs 700 crore, up 9 per cent YoY mainly driven by new product launches, favorable move from foreign exchange partly offset with price erosion.
