Categories Research Summary, Research Tear sheet

Dr. Reddy’s Laboratories Q3 FY 2022 Research Tear Sheet

Dr. Reddy’s Laboratories are an Indian multinational pharmaceutical company. The company is headquartered in Hyderabad, Telangana, India and Princeton, New Jersey, U.S.

 It was incorporated in 1984. The founder is Kallam Anji Reddy. The company has its operation worldwide. The products include Pharmaceuticals, generic drugs, over-the-counter drugs, vaccines, diagnostics and Biologics. The stocks are traded on NSE, BSE and the NYSE. The values are Integrity and Transparency, Safety, Quality, Productivity, Respect for the Individual, Collaboration and Teamwork and Sustainability.

Dr. Reddy’s Laboratories is a pharmaceutical giant in the Indian Pharmaceutical Industry. Dr Reddy’s laboratories have 48% in the Indian pharmaceutical market as of financial year 2020.The main vision of this company is to provide affordable and innovative medicines for healthier lives.

Key Financial Highlights

ParticularsQ3 FY22Q3 FY21
Gross Profit28,61226,538
Profit before Income Tax9,7092,843
Profit for the period7,065198
Diluted Earnings Per Share42.481.19

Revenue increased 8% Y-O-Y to Rs. 5,320 Cr.

Gross Margin is 53.8% for Q3 FY-22

Selling, General & Administrative expenses increased 7% Y-O-Y to Rs 1541 Crs.

EBITDA is Rs 1266 Crs, 23.8% of Revenues; grew 7% YoY.

The R&D is Rs. 416 crores, i.e., USD 56 million and is at 7.8% of sales. R&D spend increased by 1% year on year basis.

Effective tax rate for the quarter  is 27.2%.

Cash: The company has surplus cash balance of Rs. 998 crores. The free cash flow generated during this quarter  is  Rs. 1,274 crores.  This has even helped the company in capital investment of Rs Rs. 414 crores.

North AmericaThe revenue in North America isRs. 18.6 billion increased by 7%, driven by new products launches, increase in volumes of our base business and a favorable forex rate. Launched Carmustine Injection, Ephedrine Sulphate Injection, Valsartan tablets and Venlafaxine ER tablets. Filed one new ANDA during the quarter.

Europe-Revenues from Europe are Rs. 4.1 billion, declined by 2% due to price erosion in some of our existing products, partially offset by volume traction.

India-Revenue in India is 10.3 million increased 7% Y-O-Y. Sequential decline of 10%, primarily due to a reduction in sales volumes of covid-related products.

Emerging Markets- Revenues from Emerging Markets is Rs. 11.5 billion, increased 20% on Y-O-Y basis. Revenue from Russia is Rs. 4.7 billion, increased 5% Y-O-Y basis due to revenues from new products launched, and favourable forex rate.

Pharmaceutical Services and Active Ingredients (PSAI)- Year-on-year  basis  increased  by 4%, driven majorly by new product launches. Sequential decline of 13% on account of lower volumes of certain products. Total Revenues from PSAI at Rs. 7.3 billion.

Proprietary Products (PP) & OthersTotal RevenuePP & Others is Rs. 1.4 billion. There is a steep decrease of of 8% and sequential decline of 22%.

Conference Call Highlights

Management Updates

Reported EPS for the quarter is Rs. 42.48.

EBITDA and RoCE margins are closer to our aspirational target of 25%.

The company is working actively with the government of India for registering Sputnik Light as a vaccine and as a booster dose of Sputnik V.

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