Dr Reddy’s Laboratories Q4 Results 2023: Reports decent set of numbers
Earning Summary
Dr Reddy’s reported decent set of numbers supported by strong US growth. Besides US growth, the numbers were also supported by divestiture of certain brands in India which helped in overall margins beat.
Q4FY23 Earnings Summary
Revenues grew 15.3% YoY to Rs 6,315 crore (I-direct Estimate- Rs6,325 crore), mainly driven by growth in US market and India market followed by improvement on Europe front. Adjusting for divestiture of brands from both the base and current year, the growth stood at ~18%
Gross Margins increased by ~460 bps over previous year to 69.9% (I-direct Estimate- 67%), majorly driven by new product sales of certain products having higher margins and through divestment of non-core brands from the portfolio. Adjusting for non-core sales the margins were still healthy at 68.6%
EBITDA margins grew 1,605 bps YoY to 24.3% (I-direct Estimate- 22.7%). However, adjusted for non-core brands sales, the margins were at 21%
Adjusted PAT increased 192.6% YoY to Rs 952.5 crore
US business grew 26.8% YoY to Rs 2,532 crore (I-direct Estimate- Rs 2,451.2 crore), driven by new products launches and favourable forex movement, which was partly offset by price erosion
Europe grew 11.6% YoY to Rs 496 crore (I-direct Estimate- Rs488.8 crore), driven by new product launches, increase in volumes which was partly offset by price erosion and adverse forex rates
India revenues grew 32.5% YoY at Rs 1283.4 crore (I-direct Estimate- Rs1046.4 crore), driven by increase in sales prices and new product launches. However, post adjustment of brand sales from both the base and current year, the growth was 9.5%
Russia and Other CIS revenues were impacted by 18.5 % YoY to Rs 750 crore (I-direct Estimate- Rs920 crore). In Russia declined due to divestment income and higher channel inventory in Q4FY22. In CIS, the business remained flat due to favourable price movement
RoW witnessed growth of 27.6% YoY to Rs370 crore (I-direct Estimate- Rs449.5 crore), Year-on-year growth was on account of increase in volumes led by new product launches
PSAI grew 3.2 % YoY to Rs 780 crore (I-direct Estimate- Rs869.1 crore), driven by favourable forex movement and increase in volumes
ICICIdirect Research view on Stock
Views: While US growth was far ahead of our estimates, adjusted India growth was in line. Europe revenues were also higher than our estimates. Pharmaceutical Services and Active Ingredients witnessed growth due to favourable currency movements but were below our estimates. Quarterly fluctuations notwithstanding, the company continues to deliver within its determined framework. We remain positive on the company’s growth story based on simultaneous launches across major geographies and persistent recalibration of the existing portfolio.
Impact: Positive
top 5 news
Failed datetime conversion. no ranking would be done.
ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470.I-Sec is a SEBI registered with SEBI as a Research Analyst vide registration no. INH000000990.. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The information mentioned herein above is only for consumption by the client and such material should not be redistributed.
The information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of ICICI Securities Limited. The contents of this mail are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. While due care has been taken in preparing this mail, I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any inaccurate, delayed or incomplete information nor for any actions taken in reliance thereon. This mail is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject I-Sec and affiliates to any registration or licensing requirement within such jurisdiction