Dr. Reddy's Laboratories Q3 Results: Profit Rises 2%, But Misses Estimates
Dr. Reddy's Laboratories Ltd.'s profit rose 2% in the third quarter of the current financial year, but missed analysts' estimates.
The pharmaceutical company posted a bottom line of Rs 1,413.7 crore in the quarter ended December, according to an exchange filing on Thursday. That compares with the Rs 1,507-crore estimate that analysts tracked by Bloomberg had projected.
The double-digit growth in revenue was led by newly acquired Nicotine Replacement Therapy business. Excluding NRT business, the growth was 7.5% in the quarter. The NRT business contributed Rs 605 crore to overall revenue for the company.
Dr. Reddy's Q3 FY25 Highlights (Consolidated, YoY)
Revenue up 15.8% to Rs 8,381.2 crore versus Rs 7,236.8 crore (Bloomberg estimate: Rs 8,186 crore).
Ebitda up 12% to Rs 2,273 crore versus Rs 2,023.1 crore (Bloomberg estimate: Rs 2,280 crore).
Margin at 27.1% versus 28% (Bloomberg estimate: 27.9%).
Net profit up 2% to Rs 1,413.7 crore versus Rs 1,380.9 crore (Bloomberg estimate: Rs 1,507 crore).
The finance cost for the company increased two-fold from Rs 39 crore to Rs 81 crore. The other income decreased 30%. The research and development expenses were 8% of the revenue, versus 7.7% in the year-ago period and 9.1% in the previous quarter.
North America
Revenue grew 1% to Rs 3,380 crore but it declined 9% quarter-on-quarter. Volume growth, coupled with new product launches and favourable forex, was offset by price erosion on a year-on-year basis. The sequential decline was largely on account of lower sales of certain products, including Lenalidomide.
During the quarter, the company launched four new products in the US. A total of 11 products were launched during the nine months ended Dec. 31, 2024.
India
Revenue grew 14% to Rs 1,350 crore but declined 4%. The growth was led by revenue from the in-licenced vaccine portfolio, new product launches as well as price increases, partially offset by lower volume pick-up in certain brands in cardiac and gastrointestinal therapy areas.
Emerging Markets
Revenue rose 12% to Rs 1,440 crore and remained flat QoQ. The YoY growth is attributable to market-share expansion as well as new product launches.
Europe
Revenue grew 143% to Rs 1,210 crore YoY and 110% sequentially. The revenues includes earnings from the recently acquired NRT portfolio. Underlying growth, excluding NRT, is 22% YoY and 5% QoQ
Pharmaceutical Services, Active Ingredients
Revenue was at Rs 820 crore, a YoY growth of 5% and QoQ decline of 2%. The growth in the PSAI business was due to an increase in volumes, new launches and favourable forex, partially offset by adverse price variance. The QoQ decline was primarily due to moderation in the growth of the services business.
Shares of Dr. Reddy's closed 0.54% lower at Rs 1,289.35 apiece on the BSE, compared to a 0.15% gain in the benchmark Sensex on Thursday.
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