Dr. Reddy’s Q2 Results: Profit Surges 1.6 Times On All-Round Growth
Dr. Reddy’s Laboratories Ltd.’s second-quarter profit rose aided growth across segments.
The Hyderabad-based drugmaker's net profit surged 1.6 times over the preceding quarter to Rs 995.8 crore in three months ended September, it said in an exchange filing. That compares with the Rs 675.1-crore estimate of analysts tracked by Bloomberg.
Q2 Highlights (QoQ)
Revenue rose 17% sequentially to Rs 5,786.9 crore. Analysts estimated Rs 5,209.2 crore.
Ebidta rose 85% to Rs 1,359.8 crore against the estimated Rs 1,121.5 crore.
Adjusted for Rs 183.8 crore expense in the April-June towards a settlement with Australia-based Hatchtech Pty. Ltd, the company's Ebidta rose 48%.
Margin improved to 23.5% from 14.9%. Analysts had projected it at 21.5%.
The numbers include the portfolio acquired from Wockhardt Ltd.
Expenditure on selling, administration and distribution rose 6% to Rs 160 crore on a high base. The company attributable the increase to royalty on sales, annual increments, and investments in digitalisation and, sales and marketing of key brands.
Other Highlights (QoQ)
Revenue from the mainstay North America market, which contributes a third of the total sales, rose 9% sequentially. This was driven by new launches and increase in volumes of certain of existing products, though partly offset by price erosion in some molecules.
European business grew 4% on higher volumes and new launches. The region contributes 7% to the total sales.
India revenue rose 8% on higher volumes of existing products, including the Covid portfolio, two new products and increase in sales price. This portfolio contributes 20% to the revenue.
Emerging market sales rose 42%, contributing 23% to the top line.
Pharmaceutical services and active ingredients segment grew 11%, making up 15% of the revenue.
There was 238% jump in the sequential revenue from proprietary products and others segment on account of the recognition of a licence fee associated with the sale of U.S. and Canada territory rights for a migraine drug, Elyxyb, to BioDelivery Sciences International Inc.
"While we continue to strengthen our core businesses of generics and APIs, we are also making investments in our long-term growth drivers and deeper innovation capabilities," GV Prasad, co-chairman and managing director at Dr. Reddy's, said in the earnings statement.
The company's research and development expenditure stood at Rs 450 crore, down 150 basis points sequentially to 7.7% of the revenues.
Dr. Reddy's is currently conducting clinical trials for Sputnik Light vaccine and Molnupiravir drug for Covid-19.
Net profit up 0.7% to Rs 1,376.2 crore.
Revenue grew 15% to Rs 10,342.9 crore while Ebitda fell 8% to Rs 2,094.3 crore.
Separately, audit of the company's formulations manufacturing facility at Vishakhapatnam was completed by the U.S. FDA on Oct. 29. It has received eight observations, the company said in a separate exchange filing.