Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Dr. Reddy’s Q3 & 9M FY24 Financial Results By: Dr. Reddy’s Laboratories Ltd. via Business Wire January 31, 2024 at 09:44 AM EST 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] Acquired the MenoLabs branded portfolio of women’s health focused supplements in the U.S. Exclusive collaboration with Coya Therapeutics for development and commercialization of COYA 302, an Investigational Combination Therapy for treatment of Amyotrophic Lateral Sclerosis (ALS) Inspections completed by U.S. FDA at Bachupally facility. The response to the observations were submitted within stipulated timelines. Product specific Pre-Approval Inspection (PAI) at biologics manufacturing facility in October 2023, post which a Form 483 with 9 observations was issued, Routine cGMP inspection at formulations manufacturing facility (FTO-3) in October 2023, post which a Form 483 with 10 observations was issued and GMP and Pre-Approval Inspection (PAI) at R&D unit in December 2023, post which a Form 483 with 3 observations was issued. ESG & other Highlights [Q3FY24] 1st Indian pharma company to be featured in the Dow Jones Sustainability World Index for 2023 and retaining our place in the Emerging Markets Index for the 8th year in a row. Awarded ‘Gold Medal’ status by EcoVadis. MSCI ESG ratings upgraded from BB to BBB Awarded Golden Peacock awards for Corporate Social Responsibility, 2023 and Excellence in Corporate Governance, 2023 Received ICSI Corporate Social Responsibility Excellence award - 2023, in recognition of our contribution to society through our CSR initiatives. 1st Indian pharma company to pledge towards a plantation initiative covering 2,900 hectares by 2028 as part of the World Economic Forum’s 1t.org. Revenue Analysis [Q3FY24] Q3FY24 consolidated revenue at Rs. 72.1 billion, YoY growth of 7% and QoQ growth of 5%. The YoY growth was primarily driven by market share gains for our existing products in North America and continuation of our growth journey in Europe. Global Generics (GG) Q3FY24 revenue at Rs. 63.1 billion, YoY growth of 7% and QoQ growth of 3%. YoY growth was primarily driven by increase in volumes of our base business, new product launches, partially offset by price erosion in certain markets. Sequential growth was driven by increase in volumes of our base business, offset partially due to price erosion in certain markets. North America Q3FY24 revenue at Rs. 33.5 billion, YoY growth of 9% and QoQ growth of 5%. YoY growth was on account of market share expansion in certain existing key products and revenues from new product launches, partly offset by price erosion. Sequential growth was driven by net increase in volumes of our base business. During the quarter, we launched 4 new products in the region, of which 2 were launched in the U.S. During the quarter, we filed 2 new Abbreviated New Drug Applications (ANDAs) with the US Food and Drug Administration (USFDA). As of 31st December 2023, cumulatively 79 generic filings are pending for approval with the USFDA (75 ANDAs and 4 NDAs under 505(b)(2) route). Out of the pending 79 generic filings, 41 are Para IVs, and we believe 21 have ‘First to File’ status. Europe Q3FY24 revenue at Rs. 5.0 billion, YoY growth of 15% and QoQ decline of 6%. YoY growth was primarily on account of contribution from new product launches, improvement in base business volumes and favourable currency exchange rate movements, partly offset by price erosion. QoQ decline was primarily on account of price erosion in certain countries, partly offset by increase in volumes of our base business. Germany at Rs. 2.7 billion, YoY growth of 21% and QoQ growth of 0.1%. UK/OL at Rs. 1.4 billion, YoY growth of 9% and QoQ decline of 22%. Rest of Europe at Rs. 0.9 billion, YoY growth of 11% and QoQ growth of 7%. During the quarter, we launched 6 new products in the region. India Q3FY24 revenue at Rs. 11.8 billion, YoY growth of 5% and QoQ decline of 1%. YoY growth was largely attributable to revenues from new products launches while QoQ decline was largely on lower volumes in base business. During the quarter, we launched 3 new brands in the country. Emerging Markets Q3FY24 revenue at Rs. 12.8 billion, YoY decline of 2% and QoQ growth of 6%. YoY decline is attributable to unfavorable forex movement, while QoQ growth was driven by volume gains for few existing products and partially offset by unfavorable currency exchange rate movements. Revenue from Russia at Rs. 5.9 billion, YoY decline of 14% and QoQ growth of 2%. YoY decline was majorly due to unfavorable currency exchange rate movements & high base business. QoQ growth was largely on account of improved volumes and increase in certain brand prices, partially offset by unfavorable currency exchange rate movements. Revenue from other CIS countries and Romania at Rs. 2.3 billion, YoY growth of 4% and QoQ growth of 7%. YoY growth was primarily on account of increase in price of certain brands, new product launches and favorable forex. QoQ growth was driven by increase in base business volumes and new launches. Revenue from Rest of World (RoW) territories at Rs. 4.6 billion, YoY growth of 16% and QoQ growth of 10%. YoY growth was largely attributable to contribution from new products. QoQ growth was primarily driven by increase in base business volumes and new product launches. Pharmaceutical Services and Active Ingredients (PSAI) Q3FY24 revenue at Rs. 7.8 billion, with a growth of 1% YoY and 11% QoQ. YoY growth was mainly driven by revenues from new products, favourable forex, partially offset by price decline and low business volumes. QoQ growth was driven by improved volumes in base business and contributions from new product launches. Excluding revenue in base period from COVID-19 products, PSAI business grew in double-digit. During the quarter, we filed 38 Drug Master Files (DMFs) globally. Income Statement Highlights: Q3FY24 gross margin at 58.5% (GG: 61.9%, PSAI: 29.4%). Gross margin decreased by ~73 bps YoY and 18 bps sequentially. The decline in margin was primarily driven by lower prices for certain products in generic markets, partly offset by improvement in product mix and productivity. Selling, general & administrative (SG&A) expenses for Q3FY24 at Rs. 20.2 billion, YoY increase of 12% and by 8% QoQ. The YoY SG&A spend increase is largely on account of investments in sales & marketing activities, digitalization capabilities, and new business initiatives. Research & development (R&D) expenses in Q3FY24 at Rs. 5.6 billion. As % to Revenues – Q3FY24: 7.7% | Q2FY24: 7.9% | Q3FY23: 7.1%. 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. Other operating income for Q3FY24 at Rs. 0.9 billion compared to other operating expenses of Rs. 0.7 billion in Q3FY23. Other operating income was largely on account of sale of non-current assets. Net Finance income for Q3FY24 at Rs.0.9 billion compared to net finance expense of Rs. 0.1 billion in Q3FY23. The higher income was primarily on account of profit on sale of units of mutual funds and other investments. Profit before Tax for Q3FY24 at Rs. 18.3 billion, YoY growth of 12%. QoQ decline of 5%. Profit after Tax for Q3FY24 at Rs. 13.8 billion, YoY growth of 11%. QoQ decline of 7%. The effective tax rate for the quarter has been 24.5% as compared to 23.7% in Q3FY23. The higher tax rate is mainly due to increase in the proportion of the Company's profits coming from higher tax jurisdictions, partly offset by adoption of corporate tax rate under section 115BAA of the Income Tax Act of India. Diluted earnings per share for Q3FY24 is Rs. 82.68 Other Highlights: EBITDA for Q3FY24 at Rs. 21.1 billion and the EBITDA margin is 29.3%. Operating Working Capital at Rs. 108.1 billion. Capital expenditure for Q3FY24 at Rs. 3.1 billion. Free cash-flow for Q3FY24 at Rs. 0.2 billion. Net cash surplus at Rs. 59.1 billion as on December 31, 2023. Debt to Equity is (0.21). ROCE for the company is 37% (annualized). 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. View source version on businesswire.com: https://www.businesswire.com/news/home/20240131470785/en/Contacts INVESTOR RELATIONS RICHA PERIWAL richaperiwal@drreddys.com AISHWARYA SITHARAM aishwaryasitharam@drreddys.com MEDIA RELATIONS USHA IYER ushaiyer@drreddys.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Dr. Reddy’s Q3 & 9M FY24 Financial Results By: Dr. Reddy’s Laboratories Ltd. via Business Wire January 31, 2024 at 09:44 AM EST 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] Acquired the MenoLabs branded portfolio of women’s health focused supplements in the U.S. Exclusive collaboration with Coya Therapeutics for development and commercialization of COYA 302, an Investigational Combination Therapy for treatment of Amyotrophic Lateral Sclerosis (ALS) Inspections completed by U.S. FDA at Bachupally facility. The response to the observations were submitted within stipulated timelines. Product specific Pre-Approval Inspection (PAI) at biologics manufacturing facility in October 2023, post which a Form 483 with 9 observations was issued, Routine cGMP inspection at formulations manufacturing facility (FTO-3) in October 2023, post which a Form 483 with 10 observations was issued and GMP and Pre-Approval Inspection (PAI) at R&D unit in December 2023, post which a Form 483 with 3 observations was issued. ESG & other Highlights [Q3FY24] 1st Indian pharma company to be featured in the Dow Jones Sustainability World Index for 2023 and retaining our place in the Emerging Markets Index for the 8th year in a row. Awarded ‘Gold Medal’ status by EcoVadis. MSCI ESG ratings upgraded from BB to BBB Awarded Golden Peacock awards for Corporate Social Responsibility, 2023 and Excellence in Corporate Governance, 2023 Received ICSI Corporate Social Responsibility Excellence award - 2023, in recognition of our contribution to society through our CSR initiatives. 1st Indian pharma company to pledge towards a plantation initiative covering 2,900 hectares by 2028 as part of the World Economic Forum’s 1t.org. Revenue Analysis [Q3FY24] Q3FY24 consolidated revenue at Rs. 72.1 billion, YoY growth of 7% and QoQ growth of 5%. The YoY growth was primarily driven by market share gains for our existing products in North America and continuation of our growth journey in Europe. Global Generics (GG) Q3FY24 revenue at Rs. 63.1 billion, YoY growth of 7% and QoQ growth of 3%. YoY growth was primarily driven by increase in volumes of our base business, new product launches, partially offset by price erosion in certain markets. Sequential growth was driven by increase in volumes of our base business, offset partially due to price erosion in certain markets. North America Q3FY24 revenue at Rs. 33.5 billion, YoY growth of 9% and QoQ growth of 5%. YoY growth was on account of market share expansion in certain existing key products and revenues from new product launches, partly offset by price erosion. Sequential growth was driven by net increase in volumes of our base business. During the quarter, we launched 4 new products in the region, of which 2 were launched in the U.S. During the quarter, we filed 2 new Abbreviated New Drug Applications (ANDAs) with the US Food and Drug Administration (USFDA). As of 31st December 2023, cumulatively 79 generic filings are pending for approval with the USFDA (75 ANDAs and 4 NDAs under 505(b)(2) route). Out of the pending 79 generic filings, 41 are Para IVs, and we believe 21 have ‘First to File’ status. Europe Q3FY24 revenue at Rs. 5.0 billion, YoY growth of 15% and QoQ decline of 6%. YoY growth was primarily on account of contribution from new product launches, improvement in base business volumes and favourable currency exchange rate movements, partly offset by price erosion. QoQ decline was primarily on account of price erosion in certain countries, partly offset by increase in volumes of our base business. Germany at Rs. 2.7 billion, YoY growth of 21% and QoQ growth of 0.1%. UK/OL at Rs. 1.4 billion, YoY growth of 9% and QoQ decline of 22%. Rest of Europe at Rs. 0.9 billion, YoY growth of 11% and QoQ growth of 7%. During the quarter, we launched 6 new products in the region. India Q3FY24 revenue at Rs. 11.8 billion, YoY growth of 5% and QoQ decline of 1%. YoY growth was largely attributable to revenues from new products launches while QoQ decline was largely on lower volumes in base business. During the quarter, we launched 3 new brands in the country. Emerging Markets Q3FY24 revenue at Rs. 12.8 billion, YoY decline of 2% and QoQ growth of 6%. YoY decline is attributable to unfavorable forex movement, while QoQ growth was driven by volume gains for few existing products and partially offset by unfavorable currency exchange rate movements. Revenue from Russia at Rs. 5.9 billion, YoY decline of 14% and QoQ growth of 2%. YoY decline was majorly due to unfavorable currency exchange rate movements & high base business. QoQ growth was largely on account of improved volumes and increase in certain brand prices, partially offset by unfavorable currency exchange rate movements. Revenue from other CIS countries and Romania at Rs. 2.3 billion, YoY growth of 4% and QoQ growth of 7%. YoY growth was primarily on account of increase in price of certain brands, new product launches and favorable forex. QoQ growth was driven by increase in base business volumes and new launches. Revenue from Rest of World (RoW) territories at Rs. 4.6 billion, YoY growth of 16% and QoQ growth of 10%. YoY growth was largely attributable to contribution from new products. QoQ growth was primarily driven by increase in base business volumes and new product launches. Pharmaceutical Services and Active Ingredients (PSAI) Q3FY24 revenue at Rs. 7.8 billion, with a growth of 1% YoY and 11% QoQ. YoY growth was mainly driven by revenues from new products, favourable forex, partially offset by price decline and low business volumes. QoQ growth was driven by improved volumes in base business and contributions from new product launches. Excluding revenue in base period from COVID-19 products, PSAI business grew in double-digit. During the quarter, we filed 38 Drug Master Files (DMFs) globally. Income Statement Highlights: Q3FY24 gross margin at 58.5% (GG: 61.9%, PSAI: 29.4%). Gross margin decreased by ~73 bps YoY and 18 bps sequentially. The decline in margin was primarily driven by lower prices for certain products in generic markets, partly offset by improvement in product mix and productivity. Selling, general & administrative (SG&A) expenses for Q3FY24 at Rs. 20.2 billion, YoY increase of 12% and by 8% QoQ. The YoY SG&A spend increase is largely on account of investments in sales & marketing activities, digitalization capabilities, and new business initiatives. Research & development (R&D) expenses in Q3FY24 at Rs. 5.6 billion. As % to Revenues – Q3FY24: 7.7% | Q2FY24: 7.9% | Q3FY23: 7.1%. 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. Other operating income for Q3FY24 at Rs. 0.9 billion compared to other operating expenses of Rs. 0.7 billion in Q3FY23. Other operating income was largely on account of sale of non-current assets. Net Finance income for Q3FY24 at Rs.0.9 billion compared to net finance expense of Rs. 0.1 billion in Q3FY23. The higher income was primarily on account of profit on sale of units of mutual funds and other investments. Profit before Tax for Q3FY24 at Rs. 18.3 billion, YoY growth of 12%. QoQ decline of 5%. Profit after Tax for Q3FY24 at Rs. 13.8 billion, YoY growth of 11%. QoQ decline of 7%. The effective tax rate for the quarter has been 24.5% as compared to 23.7% in Q3FY23. The higher tax rate is mainly due to increase in the proportion of the Company's profits coming from higher tax jurisdictions, partly offset by adoption of corporate tax rate under section 115BAA of the Income Tax Act of India. Diluted earnings per share for Q3FY24 is Rs. 82.68 Other Highlights: EBITDA for Q3FY24 at Rs. 21.1 billion and the EBITDA margin is 29.3%. Operating Working Capital at Rs. 108.1 billion. Capital expenditure for Q3FY24 at Rs. 3.1 billion. Free cash-flow for Q3FY24 at Rs. 0.2 billion. Net cash surplus at Rs. 59.1 billion as on December 31, 2023. Debt to Equity is (0.21). ROCE for the company is 37% (annualized). 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. View source version on businesswire.com: https://www.businesswire.com/news/home/20240131470785/en/Contacts INVESTOR RELATIONS RICHA PERIWAL richaperiwal@drreddys.com AISHWARYA SITHARAM aishwaryasitharam@drreddys.com MEDIA RELATIONS USHA IYER ushaiyer@drreddys.com
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] Acquired the MenoLabs branded portfolio of women’s health focused supplements in the U.S. Exclusive collaboration with Coya Therapeutics for development and commercialization of COYA 302, an Investigational Combination Therapy for treatment of Amyotrophic Lateral Sclerosis (ALS) Inspections completed by U.S. FDA at Bachupally facility. The response to the observations were submitted within stipulated timelines. Product specific Pre-Approval Inspection (PAI) at biologics manufacturing facility in October 2023, post which a Form 483 with 9 observations was issued, Routine cGMP inspection at formulations manufacturing facility (FTO-3) in October 2023, post which a Form 483 with 10 observations was issued and GMP and Pre-Approval Inspection (PAI) at R&D unit in December 2023, post which a Form 483 with 3 observations was issued. ESG & other Highlights [Q3FY24] 1st Indian pharma company to be featured in the Dow Jones Sustainability World Index for 2023 and retaining our place in the Emerging Markets Index for the 8th year in a row. Awarded ‘Gold Medal’ status by EcoVadis. MSCI ESG ratings upgraded from BB to BBB Awarded Golden Peacock awards for Corporate Social Responsibility, 2023 and Excellence in Corporate Governance, 2023 Received ICSI Corporate Social Responsibility Excellence award - 2023, in recognition of our contribution to society through our CSR initiatives. 1st Indian pharma company to pledge towards a plantation initiative covering 2,900 hectares by 2028 as part of the World Economic Forum’s 1t.org. Revenue Analysis [Q3FY24] Q3FY24 consolidated revenue at Rs. 72.1 billion, YoY growth of 7% and QoQ growth of 5%. The YoY growth was primarily driven by market share gains for our existing products in North America and continuation of our growth journey in Europe. Global Generics (GG) Q3FY24 revenue at Rs. 63.1 billion, YoY growth of 7% and QoQ growth of 3%. YoY growth was primarily driven by increase in volumes of our base business, new product launches, partially offset by price erosion in certain markets. Sequential growth was driven by increase in volumes of our base business, offset partially due to price erosion in certain markets. North America Q3FY24 revenue at Rs. 33.5 billion, YoY growth of 9% and QoQ growth of 5%. YoY growth was on account of market share expansion in certain existing key products and revenues from new product launches, partly offset by price erosion. Sequential growth was driven by net increase in volumes of our base business. During the quarter, we launched 4 new products in the region, of which 2 were launched in the U.S. During the quarter, we filed 2 new Abbreviated New Drug Applications (ANDAs) with the US Food and Drug Administration (USFDA). As of 31st December 2023, cumulatively 79 generic filings are pending for approval with the USFDA (75 ANDAs and 4 NDAs under 505(b)(2) route). Out of the pending 79 generic filings, 41 are Para IVs, and we believe 21 have ‘First to File’ status. Europe Q3FY24 revenue at Rs. 5.0 billion, YoY growth of 15% and QoQ decline of 6%. YoY growth was primarily on account of contribution from new product launches, improvement in base business volumes and favourable currency exchange rate movements, partly offset by price erosion. QoQ decline was primarily on account of price erosion in certain countries, partly offset by increase in volumes of our base business. Germany at Rs. 2.7 billion, YoY growth of 21% and QoQ growth of 0.1%. UK/OL at Rs. 1.4 billion, YoY growth of 9% and QoQ decline of 22%. Rest of Europe at Rs. 0.9 billion, YoY growth of 11% and QoQ growth of 7%. During the quarter, we launched 6 new products in the region. India Q3FY24 revenue at Rs. 11.8 billion, YoY growth of 5% and QoQ decline of 1%. YoY growth was largely attributable to revenues from new products launches while QoQ decline was largely on lower volumes in base business. During the quarter, we launched 3 new brands in the country. Emerging Markets Q3FY24 revenue at Rs. 12.8 billion, YoY decline of 2% and QoQ growth of 6%. YoY decline is attributable to unfavorable forex movement, while QoQ growth was driven by volume gains for few existing products and partially offset by unfavorable currency exchange rate movements. Revenue from Russia at Rs. 5.9 billion, YoY decline of 14% and QoQ growth of 2%. YoY decline was majorly due to unfavorable currency exchange rate movements & high base business. QoQ growth was largely on account of improved volumes and increase in certain brand prices, partially offset by unfavorable currency exchange rate movements. Revenue from other CIS countries and Romania at Rs. 2.3 billion, YoY growth of 4% and QoQ growth of 7%. YoY growth was primarily on account of increase in price of certain brands, new product launches and favorable forex. QoQ growth was driven by increase in base business volumes and new launches. Revenue from Rest of World (RoW) territories at Rs. 4.6 billion, YoY growth of 16% and QoQ growth of 10%. YoY growth was largely attributable to contribution from new products. QoQ growth was primarily driven by increase in base business volumes and new product launches. Pharmaceutical Services and Active Ingredients (PSAI) Q3FY24 revenue at Rs. 7.8 billion, with a growth of 1% YoY and 11% QoQ. YoY growth was mainly driven by revenues from new products, favourable forex, partially offset by price decline and low business volumes. QoQ growth was driven by improved volumes in base business and contributions from new product launches. Excluding revenue in base period from COVID-19 products, PSAI business grew in double-digit. During the quarter, we filed 38 Drug Master Files (DMFs) globally. Income Statement Highlights: Q3FY24 gross margin at 58.5% (GG: 61.9%, PSAI: 29.4%). Gross margin decreased by ~73 bps YoY and 18 bps sequentially. The decline in margin was primarily driven by lower prices for certain products in generic markets, partly offset by improvement in product mix and productivity. Selling, general & administrative (SG&A) expenses for Q3FY24 at Rs. 20.2 billion, YoY increase of 12% and by 8% QoQ. The YoY SG&A spend increase is largely on account of investments in sales & marketing activities, digitalization capabilities, and new business initiatives. Research & development (R&D) expenses in Q3FY24 at Rs. 5.6 billion. As % to Revenues – Q3FY24: 7.7% | Q2FY24: 7.9% | Q3FY23: 7.1%. 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. Other operating income for Q3FY24 at Rs. 0.9 billion compared to other operating expenses of Rs. 0.7 billion in Q3FY23. Other operating income was largely on account of sale of non-current assets. Net Finance income for Q3FY24 at Rs.0.9 billion compared to net finance expense of Rs. 0.1 billion in Q3FY23. The higher income was primarily on account of profit on sale of units of mutual funds and other investments. Profit before Tax for Q3FY24 at Rs. 18.3 billion, YoY growth of 12%. QoQ decline of 5%. Profit after Tax for Q3FY24 at Rs. 13.8 billion, YoY growth of 11%. QoQ decline of 7%. The effective tax rate for the quarter has been 24.5% as compared to 23.7% in Q3FY23. The higher tax rate is mainly due to increase in the proportion of the Company's profits coming from higher tax jurisdictions, partly offset by adoption of corporate tax rate under section 115BAA of the Income Tax Act of India. Diluted earnings per share for Q3FY24 is Rs. 82.68 Other Highlights: EBITDA for Q3FY24 at Rs. 21.1 billion and the EBITDA margin is 29.3%. Operating Working Capital at Rs. 108.1 billion. Capital expenditure for Q3FY24 at Rs. 3.1 billion. Free cash-flow for Q3FY24 at Rs. 0.2 billion. Net cash surplus at Rs. 59.1 billion as on December 31, 2023. Debt to Equity is (0.21). ROCE for the company is 37% (annualized). 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. View source version on businesswire.com: https://www.businesswire.com/news/home/20240131470785/en/
INVESTOR RELATIONS RICHA PERIWAL richaperiwal@drreddys.com AISHWARYA SITHARAM aishwaryasitharam@drreddys.com MEDIA RELATIONS USHA IYER ushaiyer@drreddys.com