Dr Reddy's Labs Q4 profit jumps 36% led by US growth, new products

Hyderabad-based Dr Reddy’s Laboratories on Tuesday reported a 36.4 per cent year-on-year (Y-o-Y) jump in profit after tax (PAT) for the fourth quarter of 2023-24.

The pharma major’s PAT was Rs 1,310 crore during the period, riding on a 12.48 per cent Y-o-Y increase in consolidated revenue from operations, which came in at Rs 7,083 crore. Key factors behind this jump in revenue were new product launches and growth in the North American market.

PBIDT (profit before interest, depreciation and tax) also grew by 21 per cent Y-o-Y to Rs 2,032 crore.

On a sequential basis, the company reported a 1.8 per cent decline in revenue with the PAT also declining by 5.22 per cent, primarily due to lower global generics revenues in North America, Emerging Markets, and India.

For the full year of FY24, Dr Reddy’s Laboratories (DRL) posted a 13.50 per cent Y-o-Y increase in revenue and 23.49 per cent increase in PAT which was attributed to expansion in market share and launch of new products.

In Q4, the Indian business revenue stood at Rs 1,130 crore, a YoY decline of 12 per cent and sequential decline of 5 per cent. The decline was attributable to the lower volumes in base business. For FY24, too, revenue at Rs 4,640 crore, saw a 5 per cent Y-0-Y decline.

Commenting on the results, DRL’s co-chairman & MD, G V Prasad said, “Our growth and profitability in FY2024 has been driven by our performance in the US. We have also made significant progress on future growth drivers through licensing, collaboration and pipeline building. We will continue to strengthen our core businesses through superior execution as we invest and build the future growth drivers.”

In Q4, the company secured an exclusive deal with Sanofi to distribute their vaccines in India. It also partnered with Bayer to bring Vericiguat, a heart failure medication, to India. DRL acquired MenoLabs, a women’s health and supplement brand from Amyris and launched Histallay, an allergy medication, and Nerivio, a migraine wearable, in new markets.

In the Global Generics (GG) segment, Q4 revenue came in at Rs 6,120 crore, a 13 per cent Y-o-Y increase and a 3 per cent QoQ decline. In FY24, revenue reached Rs 24,550 crore, a 15 per cent YoY increase. The growth was driven by volume increases, new product launches, and partially offset by price erosion in the US and Europe.

In Q4, the North America business revenue reached Rs 3,260 crore, a 29 per cent Y-o-Y increase and a 3 per cent Q-o-Q decline. The growth was due to volume increases, new launches, and was partially offset by price erosion. In FY24, the revenue reached Rs 12,990 crore, a 28 per cent YoY increase. Growth was driven by volume increases, portfolio integration, and forex gains, partially offset by price erosion.

In Q4, the European generics business stood at Rs 521 crore, growing 5 per cent YoY and QoQ aided by improvement in base business volumes, new product launches and favourable currency exchange rate movements. Again, price erosion offset some of these gains.

In Q4, Emerging Markets business reported revenue of Rs 1,210 crore, a 9 per cent Y-o-Y increase and a 6 per cent QoQ decline, the latter due to unfavourable forex.

In Q4, in the generics business, North America contributed 46 per cent to revenue, Europe 7 per cent, India 16 per cent, emerging market 17 per cent, while pharmaceutical services and active ingredients (PSAI) contributed 12 per cent.

During the quarter, the company launched 5 new products, of which 4 were launched in the US. A total of 21 products were launched during the year.

During the quarter, the company filed 9 new Abbreviated New Drug Applications (ANDAs) with the USFDA, taking their annual ANDA filing count to 17.

As of March 31, 2024, a total of 86 generic filings await approval from the USFDA comprising 81 ANDAs and 5 New Drug Applications (NDAs). Among the pending filings, 50 Para IVs, (certifications) and the company believes that amongst them 24 hold the 'First to File' status.