The drug major's consolidated net profit skid 12.59% to Rs 579.30 crore on 14.93% jump in revenue from operations to Rs 4,417.50 crore in Q1 June 2020 over Q1 June 2019.
Consolidated profit before tax (PBT) gained 3.39% to Rs 878.90 crore in Q1 June 2020 as against Rs 850 crore in Q1 June 2019. Current tax expenses for the quarter jumped 60.04% at Rs 299.60 crore as against Rs 187.20 crore in Q1 June 2019. The effective tax rate is around 34% for the quarter. The higher tax rate was primarily due to discontinuation of weighted deduction on R&D and completion of tax holiday for one of the plants. The Q1 result was declared during market hours today, 29 July 2020.
The company's gross margin for the quarter stood at 56% as against 51.7% in Q1 June 2019 and 51.5% in Q4 March 2020. SG&A expense grew 6% to Rs 1,279 crore in Q1 FY21 over Q1 FY20. R&D expense for the quarter stood at Rs 398 crore, which is 9% of the total revenues. EBITDA for the quarter stood at Rs 1,162 crore, registering a 2% Y-o-Y (year-on-year) growth and 16% Q-o-Q (quarter-on-quarter) jump.
Commenting on the same, G V Prasad, co-chairman & managing director (MD), stated: "The current quarter's financial performance has been strong across all parameter. I am glad that we have been able to serve our patients well and ensured continuity of business operations despite the challenging times. We have started integration nf the acquired business from Wockhardt and executed two important licencing arrangements for treatment options for COVID-19. Currently, we are working towards bringing both these drugs to multiple markets."
Due to the COVID-19 pandemic, the company's sales volume were impacted in some of markets due to lower prescriptions generated and fall in patient footfalls in pharmacies/clinics. However, the company assured that the pricing environment was relatively stable. New products launches continued and depreciation of rupee against the US dollar and Euro supported the business.
Revenues from Global Generics (GG) segment stood at Rs 3,510 crore, registering a Y-o-Y (year-on-year) growth of 6% driven primarily by Europe and Emerging Markets.
Revenues from business in India was at Rs 630 crore, recording a Y-o-Y decline of 10% and sequential decline of 8%. The decline was on account of lower sales volume due to lower prescriptions generated and fall in patient footfalls in pharmacies/clinics due to COVID-19.
Revenues from Pharmaceutical Services and Active Ingredients (PSAI) stood at Rs 860 crore, registering a Y-o-Y growth of 88% and sequential growth of 19% on account of higher volumes of certain products, increase in new product sales and favorable forex. During Q1 June 2020, the pharmaceutical major filed DMF for one product in the US.
Dr Reddy's Laboratories's capital expenditure stood at Rs 150 crore while free cash-flow generated during the quarter was at Rs 930 crore (before the acquisition related payout to Wockhardt worth Rs 1,500 crore). The net debt of the company is currently at Rs 340 crore as on 30 June 2020 while the net debt to equity ratio stands at 0.02.
Shares of Dr Reddy's Laboratories spurted 6.66% to Rs 4320.10. Dr. Reddy's Laboratories is an integrated pharmaceutical company.
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