- 31 Jan 2022
- ICICIdirect Research
Dr Reddy's numbers in line despite no Covid revenueDRREDDY - 4649 Change: -24.35 (-0.52 %)
News: Revenues grew 8% YoY to Rs.5338.3 crore driven by 45.6% YoY growth in RoW market to Rs.440 crore and 7.6% growth in Russia & CIS markets to Rs.710 crore. US revenues grew 7.2% YoY to Rs.1864.5 crore on back of new launches and increase in base business volume. India business grew 7% YoY to Rs.1026.6 crore driven by price hike in existing products and new launches while Europe revenues declined 2.1% YoY to Rs.405.8 crore amid price erosion in some products being partially offset by new launches. PSAI segment posted growth of 3.7% YoY to Rs.727.1 crore. Gross margins were flat YoY due to favourable product mix and reduction in procurement cost for certain products being offset by price erosion in base business. EBITDA margins improved 1186 bps to 22.8% due to lower employee and other expenses. Subsequently, EBITDA grew 125.4% YoY to Rs.1215.7 crore. [Note: Base of Q3FY21 had Rs.597.2 crore impairment cost]
Views: Dr Reddy’s Laboratories’ Q3 revenues and margins were in line with I-direct estimates primarily driven by new launches and higher sales volume being partially offset by price erosion in base business. The management remains committed to working on cost rationalisation, especially on the SGN&A front and calibrating of R&D spend more towards Global Generics front & Biosimilars and lower towards proprietary products. Key growth drivers in the near term would be key launches across geographies besides continuing growth momentum in Global Generics in India and Russia.