Dr. Reddy’s Q4 Results: Profit More Than Doubles On Higher Sales In U.S., Europe
Dr Reddy’s Q4 profit doubled year-on-year to Rs 764 crore on the back of revenue that rose 10% to Rs 4,432 crore.
Drugmaker Dr. Reddy’s Laboratories Ltd.’s quarterly profit more than doubled on the back of a jump in sales in the U.S. and Europe.
Net profit of the Hyderabad-based drugmaker rose to Rs 764 crore in the quarter ended March from Rs 343 crore a year ago, according to an exchange filing. That compares with the Rs 530-crore consensus estimate of analysts tracked by Bloomberg.
Its revenue rose 10 percent over the last year to Rs 4,432 crore in the January-March period. That’s against the Rs 4,268-crore forecast.
Dr. Reddy’s reported a year-on-year sales growth of 21 percent at Rs 1,807.2 crore in North America, its largest market. Its domestic sales grew 5 percent over last year to Rs 683.9 crore. That compares with India’s overall pharmaceutical sales that, according to data released by AIOCD-AWACS, grew 9.7 percent year-on-year in the January-March period.
The drugmaker’s earnings before interest, tax, depreciation and amortisation increased 14 percent to Rs 940 crore, while margins expanded to 21.2 percent from 20.4 percent last year.
During the quarter, the Dr. Reddy’s acquired select divisions of Wockhardt Ltd.’s branded generics business in India and a few other international territories like Nepal, Sri Lanka, Bhutan and Maldives. The deal, comprising a portfolio of 62 brands in multiple therapy areas, was done on a slump sale basis for a consideration of Rs 1,850 crore.
FY20 has been a very positive year for the company. Progress made during the year includes VAI (voluntary action initiated) status for CTO-6 (Srikakulam, Andhra Pradesh plant), healthy product pipeline, productivity improvement, and strong financial performance across our businesses.GV Prasad, Co-Chairman & Managing Director, Dr. Reddy’s
Shares of Dr. Reddy’s rose 3.11 percent to Rs 3,814 apiece after the quarterly results were announced. The company has declared a dividend of Rs 25 per share.
Region Wise Sales For Dr. Reddy’s
- North America sales rose 21 percent to Rs 1,807.2 crore.
- European sales rose 80 percent to Rs 344.6 crore.
- Sales in India rose 5 percent to Rs 683.9 crore.
- Emerging market sales rose 15 percent to Rs 804.2 crore.
- Sale of global generics grew 20 percent from last year to Rs 3,639.8 crore
Regulatory Action This Quarter
- Feb. 14, 2020: Audit of Formulations Plant Unit I at Srikakulam was completed by the U.S. FDA with zero observations.
- Feb. 16, 2020: Formulations manufacturing plant at Duvvada got voluntary action initiated status from the U.S. FDA.
- Feb. 19, 2020: Formulations manufacturing plant at Duvvada got establishment inspection report from the U.S. FDA, indicating closure of the audit.
- Feb. 27, 2020: Integrated Product Development Organisation in Telangana gets no form 483 in the U.S. FDA audit.
- Feb. 28, 2020: Formulations manufacturing plant-3 at Bachupally gets Form 483 with one observation. The said facility received an Establishment Inspection Report today.
- March 5, 2020: API manufacturing plant in Telangana gets Form 483 with three observations. The facility got an establishment inspection report on April 9, indicating closure of the audit.
Stock Performance In Q4
Dr. Reddy’s outperformed the benchmark indices in the quarter ended March. While the drugmaker’s stock gained 8.5 percent, the Nifty 50 and Sensex tumbled more than 20 percent. Most of the losses in the equity indices came in March amid concerns about mounting coronavirus cases in India.
The drugmaker was also the top performer on the Nifty Pharma Index during the quarter. The index fell 10.7 percent in the January-March period.
