Dr Reddy –
Q1 FY 25 results and concall updates –
Revenues – 7627 vs 6738 cr, up 14 pc
Gross Margins @ 60.4 vs 58.7 pc – due favourable product mix and operating leverage
EBITDA – 2130 vs 2068 cr, (margins @ 28 vs 31 pc) Margins contracted due increased investments in new business initiatives, higher freight costs, business integration costs
PAT – 1392 vs 1405 cr
Net surplus Cash on books @ 6730 cr
R&D expenses @ 620 cr @ 8.2 pc of sales – reflecting increased investments in Biosimilars pipeline and Novel Oncology assets
Geography wise sales –
North America – 3850 cr, up 20 pc YoY – mainly due increased volume in the base business, contribution from new launches, partially offset by price erosions
Europe – 530 cr, up 4 pc YoY ( Germany sales @ 280 cr, UK sales @ 160 cr )
India – 1330 cr, up 15 pc YoY – mainly on account of new product launches and newly in-licensed vaccine portfolio
Emerging Markets – 1190 cr, up 3 pc YoY ( Russia sales @ 550 cr, Sales from CIS region @ 190 cr, RoW sales @ 440 cr )
API + Pharma services – 770 cr, up 14 pc YoY. During the Qtr, company filed 11 DMFs globally
Company acquired World’s no 2 Nicotine Replacement therapy brand portfolio of – Nicotinell, Nicabate, Thrive & Habitual from Haleon PLC ( for sales across the world except US ) for a total consideration of Rs 5200 cr. It generated global sales of Rs 2300 cr for FY 24 ( across formats – gums, patches, lozenges ). Dr Reddy expects the brand to clock an EBITDA margin of 25 pc by FY 26. Deal is expected to be completed by Q3 FY 25
Earlier in Jan 24, company had acquired MenoLabs in US which owns a portfolio of 07 brands for treatment / management of menopause and pre-menopause
Company aims to have a worldwide OTC business with sales of $ 1 billion / yr in next 3-4 yrs. For that they intend to keep acquiring more brands
Inaugurated 70k Sq Ft state of the art Biologics facility in Genome Valley Hyderabad. Aim to commission manufacturing capacity by end of FY 25. This new facility will be targeting CDMO opportunities in the Biologics space
Company is confident of sustaining good growth momentum in their US business ( despite the price erosions ) on the back of continued new launches and reliable customer support and service that the company provides
Expect India growth to further pickup wef Q2
Disc: holding, biased, not SEBI registered, not a buy / sell recommendation
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