Dr. Reddy's Laboratories Ltd (NSE:RDY) Q3 2018 Earnings Conference Call - Preliminary Transcript

Jan 25, 2018 • 08:00 am ET


Dr. Reddy's Laboratories Ltd (NSE:RDY) Q3 2018 Earnings Conference Call - Preliminary Transcript


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Ladies and gentlemen, good day, and welcome to Dr. Reddy's Laboratories Limited Q3 FY2018 Earnings Conference Call. As a reminder, all the participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Saunak Savla. Thank you, and over to you, sir.

Saunak Savla

Hi. A very good morning and good evening to all of you, and thank you for joining us today for the Dr. Reddy's earnings conference call for the third quarter of fiscal 2018. Earlier during the day, we have released our results, and the same are also posted on our website. We are conducting this live webcast of this call, and a transcript shall be available on our website soon. The discussion and analysis in this call will be based on the IFRS consolidated financial statements.

To discuss the business performance and outlook, we have the leadership team of Dr. Reddy's, comprising Mr. Abhijit Mukherjee, our COO Mr. Saumen Chakraborty, our CFO Mr. Anil Namboodiripad, who heads our Proprietary Products business and the Investor Relations team. Please note that today's call is a copyrighted material of Dr. Reddy's and cannot be rebroadcasted or attributed in press or media outlets without the company's expressed written consent.

Before we proceed on the call, I would like to remind everyone that the Safe Harbor language contained in today's press release also pertains to this conference call and the webcast. After the end of the call, in case if any additional clarifications are required, please feel free to get in touch with the Investor Relations team.

Now I shall turn the call over to Mr. Saumen Chakraborty, our CFO.

Saumen Chakraborty

Thank you, Saunak. Greetings to everyone. I will cover the key financial highlights. For this section, all the amounts I have translated into US dollar at the convenience translation rate of INR63.83, which is the rate as of 29 December 2017.

Consolidated revenues for the quarter at INR3,806 crores or $596 million, grew 3% year-on-year and 7% sequentially. During the quarter, our Proprietary Products business secured the NDA approval from US FDA of IMPOYZ that is brand low-concentration clobetasol cream. This had been recently out-licensed to Encore Dermatology, Inc. for the commercialization of the product in the United States.

This approval triggered the recognition of product milestone of $20 million in this quarter. Normalized for this, the balanced sequential growth was also aided by incremental contribution from new products, partially offset by the price erosion in North America Generics business.

Revenue from Global Generics segment is at $472 million and PSAI segment is at $85 million. Consolidated gross profit margin for the quarter is at 56.3%, a sequential improvement of around 300 basis points. Gross margins of Global Generics and PSAI were at around 59.5% and 23.8%, respectively. Sequential improvement is largely attributable to the better product mix and also the above referred milestone recognition