Dr Reddy's Laboratories (DRL), a Rs.14,800 crore plus second largest pharma major in India, has posted satisfactory financial performance during the fourth quarter ended March 2015 and recommended equity dividend of 400 per cent for the year 2014-15.
The company's consolidated net profit for the fourth quarter ended March 2015 increased by 7.7 per cent to Rs.519 crore from Rs.482 crore in the corresponding period of last year despite significant R&D expenditure of Rs.514 crore as against Rs.399 crore. R&D expenditure worked out to 13.4 per cent of revenue as against 8 per cent in the last period. EBIDTA improved marginally to Rs.8,064 crore from Rs.7,942 crore.
Its consolidated net sales improved by 11.2 per cent to Rs.3,870 crore from Rs.3,481 crore. Global generics sales improved by 13 per cent to Rs.3,099 crore from Rs.2,732 crore, a growth of 13 per cent. Its pharmaceutical services and active ingredients (PSAI) sales improved by 12 per cent to Rs.742 crore from Rs.664 crore.
Its revenues from generics in North America improved by 14.6 per cent to Rs.1,715 crore from Rs.1,496 crore and that in Europe moved up by 32.2 per cent to Rs.234 crore from Rs.177 crore. The North American generic sales contributed 55 per cent to its total revenue and European generic revenues 8 per cent. Its domestic sales of generics increased by 15.6 per cent to Rs.474 crore from Rs.410 crore in the similar quarter of last year. However, its generic sales in Russia and other CIS region declined sharply by 27 per cent to Rs.329 crore from Rs.452 crore. The sales in rest of the world went up sharply by 77 per cent to Rs.347 crore from Rs.196 crore.
The sales of PSAI in North America declined by 9 per cent to Rs.140 crore from Rs.154 crore and that in India also declined by 32 per cent to Rs.67 crore from Rs.98 crore. However, PSAI sales in Europe and RoW increased by 36 per cent and 21 per cent to Rs.322 crore and Rs.212 crore respectively.
Despite significant fall in BSE Sensex by over 550 points today, DRL scrip moved up sharply by 3.5 per cent or Rs.115 on BSE to Rs.3,478 in the afternoon session.
G V Prasad, co-chairman and CEO, said, “We are pleased with the progress on our financial and non-financial parameters, which we delivered despite currency volatility in some our emerging market geographies. Our commitment to R&D continues to show results, with the filings of NDAs in our proprietary products business during the quarter and continued filings of complex generics assets. Overall our results demonstrate our commitment to our strategy, across businesses, as we constantly strengthen our focus on patients and providing them access to affordable medicines.”
For the full year ended March 2015, DRL's consolidated net sales increased by 12.1 per cent to Rs.14,819 crore from Rs.13,217 crore in the previous year. Its net profit improved by 3.1 per cent to Rs.2,218 crore from Rs.2,151 crore. EPS worked out to Rs.130.22 as compared to Rs.126.52 in the last year.
DRL incurred a forex loss of Rs.84.33 crore during fourth quarter ended March 2015 which put pressure on bottomline. Similarly, DRL paid consideration of Rs.510 crore (US$ 80 million) for acquisition of Habitrol franchise (an over-the-counter nicotine replacement therapy transdermal patch) from Novartis Consumer Health Inc. DRL's subsidiary Aurigene Discovery Technologies Ltd received equity shares worth Rs.145 crore for collaboration, license and option agreement with Curis Inc to discover, develop and commercialized small molecule antagonists for immuno-oncology and precision oncology targets. The company recognized this shares as revenue over the period in which Aurigene has continuing performance obligations.
The sales from global generics for full year ended March 2015 increased by 14.6 per cent to Rs.12,056 crore from Rs.10,516 crore. North America contributed 53.7 per cent of total generic sales with sales of Rs.6,472 crore as against Rs.5,530 crore in the previous year. The growth is due to scale-up of the injectable franchise and market share gains in select molecules. It launched 12 new products in North America. The sales of generic in Europe increased only by 3.2 per cent to Rs.719 crore. Its generic sales in India went up by 13.8 per cent to Rs.1,787 crore from Rs.1,571 crore and that in Russia & other CIS countries declined by 10.7 per cent to Rs.1,771 crore from Rs.1,982 crore. Its RoW sales of generic increased by 77.5 per cent to Rs.1,306 crore from Rs.736 crore.
The sales of PSAI improved by 6.2 per cent to Rs.2,546 crore from Rs.2,397 crore in the previous year. PSAI sales in North America increased by 6 per cent to Rs.461 crore from Rs.435 crore. Its European sales of PSAI increased by 20 per cent to Rs.1,051 crore from Rs.877 crore. However, it domestic sales of PSAI declined by 13.2 per cent to Rs.329 crore from Rs.379 crore. And its PSAI sales in RoW remained stagnant at Rs.706 crore during 2014-15.
Its total R&D expenditure increased by 40.7 per cent to Rs.1,745 crore from Rs.1,240 crore and its selling, general and administrative expenditure 9.8 per cent to Rs.4,258 crore from Rs.3,878 crore. The company earned interest income of Rs.168 crore as against Rs.40 crore in the previous year. Tax provision worked out to Rs.598 crore as compared to Rs.509 crore. Depreciation provision amounted to Rs.572 crore as compared to Rs.480 crore.
The company filed 13 new products with US FDA and its 68 ANDAs are awaiting approval of which 43 are Para IVs. Among 43 Para IVs products, 13 products may be 'First to File' status. Similarly, DRL filed 77 DMFs globally, including 12 in the US and 16 in Europe. The cumulative number of DMF fillings reached at 735 as at the end of March 2015.