Categories Earnings, Health Care

Earnings | Dr. Reddy’s Laboratories Ltd. (NSE:DRREDDY): Q3FY23 Results Out; Total Income rise 27% YoY

Dr. Reddy’s Laboratories Ltd. (NSE:DRREDDY) is a multinational pharmaceutical company based in Hyderabad, India. The company was founded in 1984 and has since grown to become a leading player in the global pharmaceutical industry. Dr. Reddy’s Laboratories specializes in the development, manufacturing, and marketing of generic drugs, active pharmaceutical ingredients (APIs), and proprietary products. The company’s product portfolio covers a wide range of therapeutic areas, including cardiovascular, oncology, gastroenterology, dermatology, and neurology, among others. In addition to its generic drug offerings, Dr. Reddy’s Laboratories also has a growing biosimilars business, which focuses on the development of high-quality and affordable biologic medicines. The company has a presence in over 25 countries, including the United States, Europe, Russia, India, and China.

Dr. Reddy’s Laboratories, a pharmaceutical company based in India, has announced its Q3FY23 results. The company reported a gross profit margin of 59.2%, an increase of approximately 545 bps over the previous year. The increase was mainly driven by new product launches with higher margins, favorable product mix, and favorable forex movement, which was partly offset by price erosion. The gross profit margin for the GG and PSAI business segments were at 64.6% and 18.2%, respectively. The company’s SG&A expenses were Rs 18 billion, an increase of 17% YoY, primarily due to investments in sales and marketing, annual increments, certain one-off expenses, and higher forex rates. The R&D expenses were Rs 4.8 billion, and as a percentage of revenues, it was 7.1% in Q3FY23.

The company continues its focus on investing in R&D to build a healthy pipeline of new products, including the development of products in its biosimilars and generics businesses. The company reported a profit before tax of Rs 16.3 billion, an increase of 68% YoY, and a profit after tax of Rs 12.5 billion. The diluted earnings per share were Rs 74.95, and the EBITDA was Rs 19.7 billion, with an EBITDA margin of 29.0%. The capital expenditure was Rs 2.9 billion, and the free cash flow was Rs 19.8 billion. Dr. Reddy’s Laboratories reported a net cash surplus of Rs 34 billion as of December 31, 2022, and the net debt-to-equity ratio was (0.15). The RoCE for the company was 35.8% (annualized).

Overall, Dr. Reddy’s Laboratories had a positive Q3FY23, with an increase in gross profit margin, profit before tax, and RoCE, indicating a strong financial performance. The company continues to focus on investing in R&D and building a healthy pipeline of new products while maintaining a net cash surplus.

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