Dr Reddy’s Laboratories Q1 PAT up 18% to Rs 1,402 cr on India, Russia Filesadmin.co

Hyderabad-based Dr. Reddy’s Laboratories Limited (DRL) posted an 18 per cent year-on-year (YoY) jump in net profit for the first quarter of 2023-24 financial year to Rs 1,402 crore, riding on growth in its businesses in the US and Russia.

 

Its revenues grew by 29 per cent YoY to touch Rs 6,738 crore in Q1FY24. On a sequential basis, DRL’s revenues grew by 7 per cent, while the profit after tax (PAT) swelled by 46 per cent.

 

DRL co-chairman and MD, G V Prasad said the company witnessed strong margin expansion in Q1FY24 driven by market share gains and new product momentum in their US generics business, as well as reporting robust performance in Russia. Q1FY24 gross margin came in at 58.7 per cent, up 880 bps YoY and 150 bps quarter-on-quarter (QoQ).

 

DRL stock was up marginally, ending the day’s trade at Rs 5475 apiece on the BSE.            

 

The company has a net cash surplus of Rs 4980 crore as of June 2023, which it intends to use for inorganic acquisitions.

 

DRL chief executive officer (CEO) Erez Israeli said the company will focus on India and emerging markets for inorganic opportunities.

 

These could be licensing deals, brand acquisitions and mergers and acquisitions (M&As), he said, adding that they are looking at the OTC (over-the-counter) space for such opportunities.

 

DRL’s US business grew 79 per cent YoY and 26 per cent QoQ posting revenues of Rs 3198 crore. Parag Agarwal, CFO, DRL said that DRL’s growth in the US was faster than the market growth.

 

“During the quarter, we launched six new products in the US and two in Canada. We also commercialised the generic prescription portfolio acquired from Mayne Pharma,” the company said.

 

North America accounted for 47 per cent of DRL’s Q1FY24 revenues.

 

The India revenues, however, declined by 14 per cent YoY and 11 per cent sequentially to Rs 1148 crore thanks to impact of price control of drugs.

 

The company said that excluding brand divestment income, sales of divested portfolio from base and National List of Essential Medicines (NLEM)-related price reduction impact, the India business registered a high single-digit growth.

 

Emerging markets, which accounts for 17 per cent of consolidated revenues, similar to that of India’s contribution, saw a strong 28 per cent YoY growth and a 4 per cent QoQ growth to Rs 1155 crore.

 

The pickup in allergy season, low base effect and better pricing aided the business growth.

 

Revenues from Russia grew by 75 per cent YoY and 9 per cent QoQ to Rs 560 crore.