Hyderabad-based Dr Reddy’s Laboratories posted an 11 per cent year-on-year (Y-o-Y) rise in profit after tax during the third quarter of financial year 2023-24 at Rs 1,378.9 crore, riding on a 7 per cent Y-o-Y increase in consolidated revenue from operations which came in at Rs 7,214.8 crore, thanks to market share gains for their products in North America and growth in the European market.
On a sequential basis, the company exhibited a 5 per cent increase in revenue while the profit after tax declined by 7 per cent. The earnings before interest, tax, depreciation and amortisation (Ebitda) grew by 7.4 per cent Y-o-Y to Rs 2,110 crore. The numbers are reported in accordance with International Financial Reporting Standards (IFRS).
For the Indian business in Q3 FY24, the revenue stood at Rs 1,180 crore Y-o-Y with a growth of 5 per cent and a sequential decline of 1 per cent. The Y-o-Y growth was largely attributable to revenues from new product launches, while the sequential decline was due to lower volumes in the base business.
Commenting on the results, Co-Chairman & Managing Director, G V Prasad said, "We delivered another quarter of the 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 in strategic collaboration for novel molecules to meet the unmet needs of patients."
Speaking on emerging markets, Chief Financial Officer Parag Agarwal of Dr Reddy stated, “Although emerging markets declined by 2% Y-o-Y, when assessed on a constant currency basis, which is a true measure of growth, it grew 6%. While the market sees some quarter-on-quarter volatility, we remain very confident of our ability to drive double-digit growth in this market. Emerging market continues the growth momentum driven by new launches. We launched 30 new products during the quarter. And for the year, we expect the launches to be higher than 100 launches.”
The North American generics business stood at Rs 3,349.2 crore and grew by 9 per cent Y-o-Y. The growth was attributed to the market share expansion in existing key products and revenues from new product launches, which were partly offset by price erosion.
The European generics business stood at Rs 4,970 crores, growing 15 per cent Y-o-Y. The Y-o-Y growth was attributed to new product launches, improvement in base business volumes and favourable currency exchange rate movements, which were partly offset by price erosion.
More From This Section
In Q3 FY24, the North American generics contributed 46%, European generics contributed 7%, Indian generics contributed 16%, emerging market generics contributed 18%, pharmaceutical services and active ingredients (PSAI) contributed 11%, whereas others contributed 2% in the revenue mix.
As of December 31, 2023, a total of 79 generic filings await approval from the US Food and Drug Administration (USFDA), comprising 75 Abbreviated New Drug Applications (ANDAs) and 4 New Drug Applications (NDAs). Among the pending filings, 41 are Para IVs (certifications), and the company believes that among them, 21 hold the 'First to File' status.
The same day, Dr Reddy's share price declined by 0.07 per cent, ending the day's trade at Rs 5,840 apiece on the Bombay Stock Exchange (BSE).