Dr Reddy's Q2 PAT slides 15% YoY to Rs 1,255 crore

The drug major's consolidated net profit decreased 15.28% to Rs 1,255.7 crore in Q2 FY25 as against Rs 1,482.2 crore posted in Q2 FY24.

Total revenue from operations stood at Rs 8,038.2 crore in Q2 FY25, up 16.45% YoY, primarily driven by growth in global generics revenues.

Consolidated profit before tax rose marginally to Rs 1,917.4 crore in the second quarter of FY25 as against Rs 1916.7 crore posted in Q2 FY24.

EBITDA grew 4.53% to Rs 2,280.3 crore in Q2 FY25 as against Rs 2,181.3 crore recorded in the corresponding quarter previous year. EBITDA margin reduced to 28.4% in Q2 FY25 as against 31.7% posted in Q2 FY24.

Q2 FY25 gross margin stood at 59.6%, up 92 bps YoY, primarily on improvement in product mix and overhead leverage, partly offset by price erosion.

Selling, general & administrative (SG&A) expenses for Q2 FY25 were at Rs 2,300.7 crore, YoY increase of 22.41%.

Research & development (R&D) expenses in second quarter of FY25 stood at Rs 727.10 crore, 28.7% of revenue.

During the quarter, revenues from Emerging Markets segment stood at Rs 1,455.4 crore, year on year increase of 19.65%, growth is attributable to market share expansion as well as new product launches.

Revenues from India market during the quarter stood at Rs 1,397.1 crore, year on year increase of 17.79%, growth was led by revenues from the vaccine portfolio in-licensed from Sanofi, new products launched as well as price increases. During the quarter, company launched three new brands in the country, taking the year-to-date total to 16.

Revenues from North America market was at Rs 3,728.1 crore, year on year rise of 17.32%. The growth was largely on account of increase in sales volumes, partly offset by price erosion.

During the quarter, revenue from Europe market was at Rs 577 crore, year on year growth of 9.15%. The growth was primarily on account of leveraging the portfolio to launch new products, partly offset by price erosion.

Revenues from Global Generics (GG) during the quarter grew 17.17% YoY to Rs 7,157.6 crore, primarily driven by improved sales volumes and new product launches. Sequential growth was primarily driven by Emerging Markets and Europe.

Revenues from Pharmaceutical Services and Active Ingredients (PSAI) rose 19.51% to Rs 840.70 crore in Q2 FY25, mainly driven by momentum in base business volumes, growth in services business and revenues from new products.

Free cash-flow for Q2 FY25 stood at Rs 200 crore while net cash surplus for the company was at Rs 1,890 crore as on 30 September 2024. Capital expenditure for second quarter of FY25 stood at Rs 740 crore.

On half year basis, the companys net profit declined 8.28% to Rs 2,648.1 crore on 15.18% rise in total revenue from operations to Rs 15,734 crore in H1 FY25 over H1 FY24.

Commenting on the results, co-chairman & MD, G V Prasad said, "We delivered another good quarter and maintained the growth momentum across businesses. We made progress on our future growth drivers, operationalized our venture with Nestle and completed the acquisition of Nicotinell and related brands. We will continue to drive efficiency, strengthen our core businesses, and positively impact patient lives through science and innovation."

Meanwhile, the companys board approved fund infusion by way of investment in equity shares of Dr. Reddys Laboratories LLC, Russia, a step-down wholly-owned subsidiary, upto an amount of Rs 600 crore. The fund will be used for working capital requirements.

Dr Reddy's Laboratories is engaged in providing medicines. The firm operates in three segments: global generics, pharmaceutical services and active ingredients (PSAI) and proprietary products.

The scrip rose 0.36% to close at Rs 1,272.55 on the BSE.

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