Dr. Reddy’s Laboratories Ltd. (NYSE: RDY) today announced its unaudited
consolidated financial results for the quarter and nine months ended
December 31, 2013 under International Financial Reporting Standards
(IFRS).
Key Highlights (Q3 FY14)
-
Consolidated revenues at Rs. 35.3 billion, YoY growth of 23%.
-
Revenues from the Global Generics (GG) segment at Rs. 29.4
billion, YoY growth of 41%. Growth is driven by North America and
other Emerging Markets.
-
Revenues from the Pharmaceutical Services and Active Ingredients
(PSAI) segment at Rs. 5.1 billion, YoY decline of 29%.
-
Research & Development (R&D) expenses at Rs. 3.0
billion, 8.4% to revenues versus 7.1% to revenues as in Q3 FY13.
-
Selling, general & administrative (SG&A) expenses at Rs.
10.4 billion, 29.6% to revenues versus 29.9% to revenues as in Q3
FY13.
-
EBITDA at Rs. 10.0 billion, 28.4% to revenues versus 21.1%
to revenues as in Q3 FY13.
-
PBT at Rs. 8.7 billion, 24.6% to revenues versus 16.3% to
revenues as in Q3 FY13.
-
PAT at Rs. 6.2 billion, 17.5% to revenues versus 13.2% to
revenues as in Q3 FY13.
-
During the quarter, the company launched 7 new generic products,
filed 4 new product registrations and filed 19 DMFs globally.
Note: Q3 FY 13 Income Statement considered is as submitted to
the US SEC in the form 6K.
All amounts in millions, except EPS
|
|
All US dollar amounts based on convenience translation rate of
1USD = Rs. 61.92
|
|
|
Dr. Reddy’s Laboratories Limited and Subsidiaries
|
Unaudited Consolidated Income Statement
|
|
|
|
|
|
|
|
|
|
|
Particulars
|
|
|
Q3 FY14
|
|
|
Q3 FY13
|
|
|
Growth %
|
|
|
($)
|
|
|
(Rs.)
|
|
|
%
|
|
|
($)
|
|
|
(Rs.)
|
|
|
%
|
|
|
Revenues
|
|
|
571
|
|
|
|
35,338
|
|
|
|
100.0
|
|
|
|
463
|
|
|
|
28,651
|
|
|
|
100.0
|
|
|
|
23
|
|
Cost of revenues
|
|
|
225
|
|
|
|
13,947
|
|
|
|
39.5
|
|
|
|
219
|
|
|
|
13,560
|
|
|
|
47.3
|
|
|
|
3
|
|
Gross profit
|
|
|
345
|
|
|
|
21,391
|
|
|
|
60.5
|
|
|
|
244
|
|
|
|
15,091
|
|
|
|
52.7
|
|
|
|
42
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general & administrative expenses
|
|
|
169
|
|
|
|
10,443
|
|
|
|
29.6
|
|
|
|
138
|
|
|
|
8,571
|
|
|
|
29.9
|
|
|
|
22
|
|
Research and development expenses
|
|
|
48
|
|
|
|
2,979
|
|
|
|
8.4
|
|
|
|
33
|
|
|
|
2,025
|
|
|
|
7.1
|
|
|
|
47
|
|
Impairment loss/(reversal of impairment loss) on intangible assets
|
|
|
(8
|
)
|
|
|
(497
|
)
|
|
|
(1.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating income
|
|
|
(3
|
)
|
|
|
(177
|
)
|
|
|
(0.5
|
)
|
|
|
(4
|
)
|
|
|
(233
|
)
|
|
|
(0.8
|
)
|
|
|
(24
|
)
|
Results from operating activities
|
|
|
140
|
|
|
|
8,644
|
|
|
|
24.5
|
|
|
|
76
|
|
|
|
4,728
|
|
|
|
16.5
|
|
|
|
83
|
|
Net finance income / (expense)
|
|
|
0
|
|
|
|
15
|
|
|
|
0.0
|
|
|
|
(2
|
)
|
|
|
(96
|
)
|
|
|
(0.3
|
)
|
|
|
115
|
|
Share of profit of equity accounted investees
|
|
|
1
|
|
|
|
46
|
|
|
|
0.1
|
|
|
|
1
|
|
|
|
32
|
|
|
|
0.1
|
|
|
|
45
|
|
Profit before income tax
|
|
|
141
|
|
|
|
8,705
|
|
|
|
24.6
|
|
|
|
75
|
|
|
|
4,664
|
|
|
|
16.3
|
|
|
|
87
|
|
Income tax expense
|
|
|
(41
|
)
|
|
|
(2,521
|
)
|
|
|
(7.1
|
)
|
|
|
(14
|
)
|
|
|
(882
|
)
|
|
|
(3.1
|
)
|
|
|
186
|
|
Profit for the period
|
|
|
100
|
|
|
|
6,184
|
|
|
|
17.5
|
|
|
|
61
|
|
|
|
3,782
|
|
|
|
13.2
|
|
|
|
64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings per share
|
|
|
0.59
|
|
|
|
36.2
|
|
|
|
|
|
|
0.36
|
|
|
|
22.2
|
|
|
|
|
|
|
63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA Computation:
|
Particulars
|
|
|
Q3 FY14
|
|
|
|
|
Q3 FY13
|
|
|
($)
|
|
|
(Rs.)
|
|
|
|
|
($)
|
|
|
(Rs.)
|
Profit before income tax
|
|
|
141
|
|
|
|
8,705
|
|
|
|
|
|
75
|
|
|
|
4,664
|
|
Interest (income)/expense
|
|
|
1
|
|
|
|
48
|
|
|
|
|
|
(0
|
)
|
|
|
(12
|
)
|
Depreciation
|
|
|
20
|
|
|
|
1,208
|
|
|
|
|
|
16
|
|
|
|
971
|
|
Amortization
|
|
|
9
|
|
|
|
585
|
|
|
|
|
|
7
|
|
|
|
411
|
|
Impairment/(reversal of impairment)
|
|
|
(8
|
)
|
|
|
(497
|
)
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
162
|
|
|
|
10,049
|
|
|
|
|
|
97
|
|
|
|
6,034
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segmental Analysis
Global Generics
Revenues from Global Generics segment for Q3 FY14 at Rs. 29.4
billion, YoY growth of 41% primarily driven by North America and other
Emerging Market territories.
-
Revenues from North America for Q3 FY14 at Rs. 16.2 billion,
YoY growth of 76%. Growth largely driven by:
-
Full quarter realization coupled with market share stabilization
for recent key launches in limited competition space, namely
azacitidine, decitabine, divalproex ER, donepezil 23 mg,
zoledronic acid (5mg/100mL), zoledronic acid (4mg/5ml), etc.
-
Significant traction in market share of key existing products,
namely metoprolol ER, atorvastatin, etc.
-
During the quarter, 2 ANDAs were filed. Cumulatively, 62 ANDAs are
pending for approval with the USFDA of which 38 are Para IVs and
we believe 8 to have ‘First To File’ status.
-
Revenues from Emerging Markets (which include Russia, CIS
countries and RoW territories) for Q3 FY14 at Rs. 7.4 billion, YoY
growth of 25%.
-
Revenues from Russia at Rs. 4.3 billion, YoY growth of 17%. Growth
was slightly muted on account of delayed onset of winter in the
current quarter.
-
Revenues from CIS markets at Rs. 1.0 billion, YoY growth of 45%.
Growth was largely driven by volume uptake of existing products
and introduction of new products in Ukraine and Belarus.
-
Revenues from RoW territories stood at Rs. 2.1 billion, YoY growth
of 35%.
-
Revenues from India for Q3 FY14 at Rs. 3.9
billion, YoY growth of 5%.
-
Growth is muted primarily on account of impact of the revised
prices under new pharma pricing policy.
-
Revenues from Europe for Q3 FY14 at Rs. 1.9 billion, remained
flat YoY.
Pharmaceutical Services and Active Ingredients (PSAI)
-
Revenues from PSAI for Q3 FY14 at Rs. 5.1 billion, YoY decline of 29%.
De-growth on the back of lower number of ‘launch molecules’ to our
customers during the quarter.
-
During the quarter, 19 DMFs were filed globally, including 6 filings
in Europe. The cumulative number of DMF filings as of December 31,
2013 is 612.
Income Statement Highlights:
-
Gross profit margin at 60.5% in Q3 FY14 registered nearly 800 basis
points improvement versus gross profit margin in Q3 FY13. Gross profit
margin for Global Generics and PSAI business segments are at 68.3% and
15.7% respectively.
GG gross margin improved primarily on
account of higher contribution coupled with higher realization from
new product launches in North America, where as PSAI gross margin
declined, primarily on the back of lower number of launch molecules to
our customers and relatively higher overheads during the quarter.
-
SG&A expenses including amortization in Q3 FY14 at Rs. 10.4 billion,
YoY growth of 22%. The increase is primarily towards select brand
building activities in the Emerging Market territories; and increase
in manpower cost on account of additions and increments.
-
R&D expenses stood at Rs. 3.0 billion, YoY growth of 47%; 8.4% to
revenues in Q3 FY14 as compared to 7.1% to revenues as in Q3 FY13.
-
An earlier recorded impairment charge relating to product intangibles
in the generics portfolio, amounting Rs. 497 million, was reversed.
-
Net Finance income at Rs. 15 million in Q3 FY14 compared to the net
finance expense of Rs. 96 million as in Q3 FY13. The change is
primarily on account of:
-
Net incremental forex impact of Rs. 172 million
-
Incremental net interest expense of Rs. 61 million
-
EBITDA for Q3 FY14 at Rs. 10.0 billion, YoY growth of 67%; 28.4% to
revenues.
-
Profit after Tax in Q3 FY14 at Rs. 6.2 billion, YoY growth of 64%.
-
Diluted earnings per share in Q3 FY 14 at Rs. 36.2
-
Capital expenditure for Q3 FY14 is Rs. 2.4 billion.
|
All US dollar amounts based on convenience translation rate of
1USD = Rs. 61.92
|
|
Appendix 1: Key Balance Sheet Items
|
|
|
(in millions)
|
|
|
|
|
|
|
|
Particulars
|
|
|
As on 31st Dec 2013
|
|
|
As on 30th Sep 2013
|
|
|
($)
|
|
|
(Rs.)
|
|
|
($)
|
|
|
(Rs.)
|
Cash and cash equivalents and current investments
|
|
|
504
|
|
|
|
31,202
|
|
|
439
|
|
|
|
27,202
|
Trade receivables
|
|
|
562
|
|
|
|
34,812
|
|
|
538
|
|
|
|
33,291
|
Inventories
|
|
|
390
|
|
|
|
24,150
|
|
|
386
|
|
|
|
23,874
|
Property, plant and equipment
|
|
|
708
|
|
|
|
43,844
|
|
|
686
|
|
|
|
42,477
|
Goodwill and Other Intangible assets
|
|
|
253
|
|
|
|
15,685
|
|
|
247
|
|
|
|
15,274
|
Loans and borrowings (current & non-current)
|
|
|
796
|
|
|
|
49,284
|
|
|
795
|
|
|
|
49,200
|
Trade payables
|
|
|
157
|
|
|
|
9,744
|
|
|
175
|
|
|
|
10,828
|
Total Equity
|
|
|
1,375
|
|
|
|
85,168
|
|
|
1,261
|
|
|
|
78,086
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Appendix 2: Revenue Mix by Segment
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 FY14
|
|
|
Q3 FY13
|
|
|
Growth %
|
|
|
($)
|
|
|
(Rs.)
|
|
|
%
|
|
|
($)
|
|
|
(Rs.)
|
|
|
%
|
|
|
Global Generics
|
|
|
475
|
|
|
|
29,396
|
|
|
83
|
|
|
336
|
|
|
|
20,827
|
|
|
73
|
|
|
41
|
|
North America
|
|
|
|
|
|
16,223
|
|
|
55
|
|
|
|
|
|
9,243
|
|
|
44
|
|
|
76
|
|
Europe
|
|
|
|
|
|
1,862
|
|
|
6
|
|
|
|
|
|
1,930
|
|
|
9
|
|
|
(4
|
)
|
India
|
|
|
|
|
|
3,913
|
|
|
13
|
|
|
|
|
|
3,718
|
|
|
18
|
|
|
5
|
|
Russia & Other CIS
|
|
|
|
|
|
5,296
|
|
|
18
|
|
|
|
|
|
4,380
|
|
|
21
|
|
|
21
|
|
RoW
|
|
|
|
|
|
2,102
|
|
|
7
|
|
|
|
|
|
1,556
|
|
|
7
|
|
|
35
|
|
PSAI
|
|
|
82
|
|
|
|
5,062
|
|
|
14
|
|
|
115
|
|
|
|
7,127
|
|
|
25
|
|
|
(29
|
)
|
North America
|
|
|
|
|
|
780
|
|
|
15
|
|
|
|
|
|
1,266
|
|
|
18
|
|
|
(38
|
)
|
Europe
|
|
|
|
|
|
1,949
|
|
|
38
|
|
|
|
|
|
2,472
|
|
|
35
|
|
|
(21
|
)
|
India
|
|
|
|
|
|
945
|
|
|
19
|
|
|
|
|
|
1,268
|
|
|
18
|
|
|
(25
|
)
|
RoW
|
|
|
|
|
|
1,388
|
|
|
27
|
|
|
|
|
|
2,121
|
|
|
30
|
|
|
(35
|
)
|
Proprietary Products & Others
|
|
|
14
|
|
|
|
880
|
|
|
3
|
|
|
11
|
|
|
|
697
|
|
|
2
|
|
|
26
|
|
Total
|
|
|
571
|
|
|
|
35,338
|
|
|
100
|
|
|
462
|
|
|
|
28,651
|
|
|
100
|
|
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All figures in millions, except EPS
|
|
|
All US dollar amounts based on convenience translation rate of
1USD = Rs. 61.92
|
|
|
|
|
Appendix 3: Consolidated Income Statement
|
|
|
|
|
|
|
|
|
|
|
Particulars
|
|
|
9M FY14
|
|
|
9M FY13
|
|
|
Growth %
|
|
|
($)
|
|
|
(Rs.)
|
|
|
%
|
|
|
|
($)
|
|
|
(Rs.)
|
|
|
%
|
|
|
|
Revenues
|
|
|
1,572
|
|
|
|
97,361
|
|
|
|
100
|
|
|
|
1,338
|
|
|
|
82,866
|
|
|
|
100
|
|
|
|
17.5
|
Cost of revenues
|
|
|
670
|
|
|
|
41,482
|
|
|
|
43
|
|
|
|
632
|
|
|
|
39,133
|
|
|
|
47
|
|
|
|
6
|
Gross profit
|
|
|
902
|
|
|
|
55,879
|
|
|
|
57
|
|
|
|
706
|
|
|
|
43,733
|
|
|
|
53
|
|
|
|
28
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general & administrative expenses
|
|
|
468
|
|
|
|
28,973
|
|
|
|
30
|
|
|
|
402
|
|
|
|
24,862
|
|
|
|
30.0
|
|
|
|
17
|
Research and development expenses
|
|
|
136
|
|
|
|
8,417
|
|
|
|
8.6
|
|
|
|
86
|
|
|
|
5,347
|
|
|
|
6.5
|
|
|
|
57
|
Impairment loss/(reversal of impairment loss) on intangible assets
|
|
|
(8
|
)
|
|
|
(497
|
)
|
|
|
(1
|
)
|
|
|
8
|
|
|
|
507
|
|
|
|
1
|
|
|
|
|
Impairment loss on goodwill
|
|
|
|
|
|
|
|
|
|
|
|
3
|
|
|
|
181
|
|
|
|
0
|
|
|
|
|
Other operating income
|
|
|
(19
|
)
|
|
|
(1,189
|
)
|
|
|
(1
|
)
|
|
|
(14
|
)
|
|
|
(848
|
)
|
|
|
(1
|
)
|
|
|
40
|
Results from operating activities
|
|
|
326
|
|
|
|
20,175
|
|
|
|
21
|
|
|
|
221
|
|
|
|
13,684
|
|
|
|
17
|
|
|
|
47
|
Net finance income
|
|
|
4
|
|
|
|
236
|
|
|
|
0
|
|
|
|
1
|
|
|
|
63
|
|
|
|
0
|
|
|
|
278
|
Share of profit of equity accounted investees
|
|
|
2
|
|
|
|
126
|
|
|
|
0
|
|
|
|
1
|
|
|
|
79
|
|
|
|
0
|
|
|
|
59
|
Profit before income tax
|
|
|
332
|
|
|
|
20,537
|
|
|
|
21
|
|
|
|
223
|
|
|
|
13,826
|
|
|
|
17
|
|
|
|
49
|
Income tax expense
|
|
|
(62
|
)
|
|
|
(3,841
|
)
|
|
|
(4
|
)
|
|
|
(45
|
)
|
|
|
(2,759
|
)
|
|
|
(3
|
)
|
|
|
39
|
Profit for the period
|
|
|
270
|
|
|
|
16,696
|
|
|
|
17
|
|
|
|
179
|
|
|
|
11,067
|
|
|
|
13
|
|
|
|
51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS
|
|
|
1.58
|
|
|
|
97.9
|
|
|
|
|
|
|
1.05
|
|
|
|
65.0
|
|
|
|
|
|
|
51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Appendix 4: EBITDA Computation:
|
|
Particulars
|
|
|
9M FY14
|
|
|
|
|
9M FY13
|
|
|
($)
|
|
|
(Rs.)
|
|
|
|
|
($)
|
|
|
(Rs.)
|
Profit before income tax
|
|
|
332
|
|
|
|
20,537
|
|
|
|
|
|
223
|
|
|
|
13,826
|
|
Interest (income)/expense
|
|
|
1
|
|
|
|
58
|
|
|
|
|
|
(1
|
)
|
|
|
(42
|
)
|
Depreciation
|
|
|
56
|
|
|
|
3,496
|
|
|
|
|
|
45
|
|
|
|
2,810
|
|
Amortization
|
|
|
27
|
|
|
|
1,644
|
|
|
|
|
|
20
|
|
|
|
1,245
|
|
Impairment/(reversal of impairment)
|
|
|
(8
|
)
|
|
|
(497
|
)
|
|
|
|
|
11
|
|
|
|
688
|
|
EBITDA
|
|
|
408
|
|
|
|
25,238
|
|
|
|
|
|
299
|
|
|
|
18,527
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Disclaimer
This press release includes forward-looking statements, as defined in
the U.S. Private Securities Litigation Reform Act of 1995. We have based
these forward-looking statements on our current expectations and
projections about future events. Such statements involve known and
unknown risks, uncertainties and other factors that may cause actual
results to differ materially. Such factors include, but are not limited
to, changes in local and global economic conditions, our ability to
successfully implement our strategy, the market acceptance of and demand
for our products, our growth and expansion, technological change and our
exposure to market risks. By their nature, these expectations and
projections are only estimates and could be materially different from
actual results in the future.
About Dr. Reddy's
Dr. Reddy’s Laboratories Ltd. (NYSE: RDY) is an integrated global
pharmaceutical company, committed to providing affordable and innovative
medicines for healthier lives. Through its three businesses -
Pharmaceutical Services and Active Ingredients, Global Generics and
Proprietary Products – Dr. Reddy’s offers a portfolio of products and
services including APIs, custom pharmaceutical services, generics,
biosimilars and differentiated formulations. Major therapeutic focus is
on gastro-intestinal, cardiovascular, diabetology, oncology, pain
management and anti-infective. Major markets include India, USA,
Russia-CIS and Europe apart from other select geographies within
Emerging Markets.
For more information, log on to: www.drreddys.com
Note: All discussions in this release are based on unaudited
consolidated IFRS financials.
Copyright Business Wire 2014