Dr. Reddy's Laboratories Ltd (NSE:RDY) Q1 2021 Earnings Conference Call - Final Transcript

Jul 29, 2020 • 08:00 am ET

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Dr. Reddy's Laboratories Ltd (NSE:RDY) Q1 2021 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, good day, and welcome to the Dr. Reddy's Laboratories Limited Q1 FY 2021 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Amit Agarwal. Thank you, and over to you, sir.

Executive
Amit Agarwal

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 quarter ended June 30, 2020. Earlier during the day, we have released our results and the same are also posted on our website. This call is being recorded, and the playback and transcript shall be made available on our website soon.

All the discussions and analysis of 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. Erez Israeli, our CEO; Mr. Saumen Chakraborty, our CFO; 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 outlet without the company's expressed written consent. Before I proceed with the call, I would like to remind everyone that the Safe Harbor contained in today's press release also pertains to this conference call.

Now, I hand over the call to Mr. Saumen Chakraborty. Over to you, sir.

Executive
Saumen Chakraborty

Thank you, Amit. Greetings to everyone. During the current challenging times, I hope you all are keeping yourself safe and healthy. We are going through quite an uncertain and challenging business environment with volatility arising from both demand and supply side. I'm glad that our teams have responded very well to those challenges, and have been able to deliver quite healthy financial performance during this quarter.

The key financial highlights for the quarter are: One, strong year-on-year revenue growth of 15%; two, healthy gross margin at 56%; three, EBITDA margin of 26.3% and EBITDA growth of 47%, adjusted for settlement income in last year; four, PBT margin of 19.9% and PBT growth of 74%, adjusted for settlement income in last year; five, strong free cash flow generation of INR925 crore before payout for business acquisition from Wockhardt; and six, quarter one FY '21 annualized return on capital employed of 23.6%.

Let me take you through these in a bit more detail. For this section, all the amounts are translated into U.S. dollars at a convenience translation rate of INR75.53, which is the rate as of 30th June 2020. Consolidated revenues for the quarter stood at INR4,418 crore that is $585 million, and grew by 15% on a year-on-year basis and remained flat on a sequential quarter basis. Year-on-year growth has been supported by 88% growth in PSAI, 48% growth in Europe, 9% growth in emerging markets, 6% growth in NAG, with a decline of 10% in India.

Sequentially, the sales were impacted due to decline in volumes in our global generics business, which was offset with a growth in PSAI