Dr Reddy’s Lab posts 12% yoy growth in Q2 PAT to ₹1,113 cr, gross margins expand

Meanwhile, the company’s revenue from operations stood at ₹6,305.7 crore in Q2FY23 as against ₹5,763.2 crore in Q2 of the previous fiscal. The revenue was at ₹5,215.4 crore in Q1FY23. That being said, Dr Reddy’s revenue in Q2FY23 jumped by around 9% yoy and 21% qoq.

Its gross margin expanded to 59.1% in Q2FY23 versus 53.4% in Q2FY22 and 49.9% in Q1FY23.

EBITDA came in at ₹1,932 crore during the latest quarter — accounting for 30.6% of total revenues.

The company’s Co-Chairman & MD, G V Prasad said “We are pleased with the strong financial performance in the current quarter, driven by the launch of Lenalidomide capsules in the US market. Our focus is to build a robust pipeline with products that improve affordability and access to patients globally. We continue to progress well in our profitability, innovation, and sustainability agenda.”

Dr Reddy’s revenue from the global generics business came in at ₹55.9 billion up by 18% yoy and 26% qoq driven by the launch of the Lenalidomide capsules in the US market (as part of the volume limited settlement with innovator) and sequential quarter improvement in Russia sales. However, the growth was partly offset by price erosion in its generic markets and higher base due to covid product sales in the previous year.

In geographical terms, the company’s revenue from North America stood at ₹28 billion up by 48% yoy and 57% qoq driven by the launch and scale-up of new products and favorable movement of forex rates, which was partly offset by price erosion in some of its key molecules.

While revenue from Europe stood at ₹4.2 billion registering a year-on-year growth of 2% and sequential quarter growth of 1%. In its audit report, Dr Reddy’s said, this was driven by volume traction in base business and new product launches across our markets, however, it was partially offset by price erosion in some molecules and the impact of adverse forex rates during the quarter. It added, “We launched ten new products across countries during this quarter.”

In India, the company’s revenue stood at ₹11.5 billion and recorded marginal 1% yoy growth due to a higher base of Ql FY22, which included a contribution from covid product sales. Adjusted for this, the company has grown by double-digit. However, the revenue declined sequentially by 14% primarily on account of high base impact, as it had recognized divestment income of a few non-core brands in Ql FY23. The company launched two new products during the quarter namely Curaprox and Stig.

Meanwhile, the company’s revenues from Emerging Markets at ₹12.2 billion witnessing a year-on-year decline of 6% and sequential quarter growth of 36%.

On Friday, Dr Reddy’s Lab shares closed lower by 0.64% to ₹4,460.90 apiece. Its market cap is around ₹74,269.20 crore.