Dr Reddy’s Laboratories Q1 Results: Net Profit Down 0.90%, Revenue Up 13.88%

4 minutes of reading Last updated: July 27, 2024 | 18:08 IST

Hyderabad-based Dr Reddy’s Laboratories (DRL) reported a 0.90 per cent year-on-year (YoY) decline in profit after tax (PAT) in the first quarter of fiscal 2024-25 ended June 31, to Rs 1,392.4 crore. DRL’s operating revenue rose 13.88 per cent YoY to Rs 6,757.9 crore.

On a sequential basis, the company reported an 8.18 per cent increase in revenue, while PAT also increased by 6.31 per cent.

Commenting on the results, Co-Chairman and Managing Director GV Prasad said, “We had a strong start to the new fiscal year with our growth and profitability driven primarily by our generics business. We continue to strengthen our core businesses and have made strategic investments in biologics, consumer healthcare and innovation to drive patient impact and value creation.”

DRL’s growth was primarily driven by strong performance in its global generics business, particularly in North America and India.

Global Generics (GG) contributed significantly to the overall growth with revenues of Rs 6,890 crore. The company reported a 15 per cent YoY and 13 per cent QoQ growth in revenues, primarily due to increased volumes driven by new product launches and integration of the recently acquired vaccine portfolio in India. However, this growth was partially offset by pricing pressures.

The North America business was a key driver of growth, with revenues up 20 percent year-on-year and 18 percent quarter-on-quarter to Rs 3,850 crore. The growth was driven by increased sales of existing products and the successful launch of three new products. The company also filed one new Abbreviated New Drug Application (ANDA) and currently has 80 generic applications pending with the US Food and Drug Administration (FDA).

Revenue growth in the European region was more moderate, at 4% YoY and 1% QoQ to Rs 530 crore. The region benefited from improved volumes and new product launches, but faced challenges with price erosion. Germany was the standout performer with a 14% YoY growth, while the UK saw a 7% YoY decline.

Revenues in the Indian market grew 15 percent year-on-year and 18 percent quarter-on-quarter. This growth was primarily driven by new product launches, including the recently licensed vaccine portfolio. The company’s position in the Indian Pharmaceutical Market (IPM) during the quarter was No. 10.

The emerging markets segment saw a YoY revenue growth of 3 per cent to Rs 1,190 crore in Q1 FY25, despite a decline of 2 per cent QoQ. While market share gains and new product launches contributed positively, unfavourable exchange rates and price erosion impacted the overall growth.

Russia revenue fell 2% year-on-year to Rs 550 crore due to unfavourable exchange rates, partly offset by price increases and volume growth. However, the region showed strong growth of 11% quarter-on-quarter, driven by improved sales.

The Commonwealth of Independent States (CIS) and Romania faced challenges, with revenues down 2% year-on-year and 11% quarter-on-quarter, mainly due to reduced sales volumes, partly mitigated by price increases.

The Rest of the World (RoW) region grew 11 per cent year-on-year to Rs 440 crore, attributed to higher volumes and new product launches. However, it saw a decline of 11 per cent quarter-on-quarter due to lower sales and price erosion.

During the quarter, the company launched 17 new products in the emerging markets segment.

Pharmaceutical Services and Active Ingredients (PSAI) reported a 14 percent year-over-year revenue increase, driven by increased sales volumes and new product contributions. However, it saw a 7 percent quarter-over-quarter decline due to lower sales of some products. The company filed 11 drug master files (DMFs) globally during the quarter.

First published: July 27, 2024 | 18:08 IST