- Revenues at Rs. 35.5 billion [QoQ growth: 7%; YoY decline: 1%]
- Gross Profit Margin at 53.3% [Q1 FY18: 51.6%; Q2FY 17: 56.0%]
- Research & Development (R&D) spend at Rs. 4.2 billion. [11.8% of Revenues]
- Selling, general & administrative (SG&A) expenses at Rs. 11.0 billion [YoY decrease: 6%]
- EBITDA at Rs. 6.9 billion [19.4% of Revenues]
- Profit after tax at Rs. 2.8 billion [8.0% of Revenues]
- Revenues at Rs. 68.6 billion [YoY growth: 1%]
- Gross Profit Margin at 52.5% [H1 FY17: 56.1%]
- Research & Development (R&D) spend at Rs. 9.3 billion. [13.5% of Revenues]
- Selling, general & administrative (SG&A) expenses at Rs. 22.8 billion [YoY decrease: 5%]
- EBITDA at Rs. 10.2 billion [14.9% of Revenues]
- Profit after tax at Rs. 3.4 billion [5.0% of Revenues]
|Dr. Reddy's Laboratories Limited and Subsidiaries|
|Consolidated Income Statement|
|Particulars||Q2 FY 18||Q2 FY 17||Growth %|
|Cost of revenues||254||16,559||46.7||241||15,760||44.0||5|
|Selling, general & administrative expenses||169||11,032||31.1||180||11,774||32.8||(6||)|
|Research and development expenses||64||4,175||11.8||80||5,214||14.5||(20||)|
|Other operating expense / (income)||(2||)||(114||)||(0.3||)||(4||)||(277||)||(0.8||)||(59||)|
|Results from operating activities||58||3,808||10.7||52||3,386||9.4||12|
|Finance expense / (income), net||0||24||0.1||(6||)||(365||)||(1.0||)|
|Share of (profit) of equity accounted investees, net of income tax||(1||)||(92||)||(0.3||)||(1||)||(84||)||(0.2||)||10|
|Profit before income tax||59||3,876||10.9||59||3,835||10.7||1|
|Income tax expense||16||1,027||2.9||14||885||2.5||16|
|Profit for the period||44||2,849||8.0||45||2,950||8.2||(3||)|
|Particulars||Q2 FY 18||Q2 FY 17|
|Profit before income tax||59||3,876||59||3,835|
|Interest (income) / expense net*||1||72||(5||)||(329||)|
|EBITDA (% to sales)||19.4||17.9|
|* - Includes income from Investments|
|Key Balance Sheet Items|
|Particulars||As on 30 th Sep 17||As on 30 th June 17|
|Cash and cash equivalents and Other current Investments||257||16,793||223||14,572|
|Property, plant and equipment||887||57,905||882||57,611|
|Goodwill and Other Intangible assets||760||49,634||744||48,564|
|Loans and borrowings (current & non-current)||822||53,668||773||50,462|
|Revenue Mix by Segment [Year on year]|
|Particulars||Q2 FY 18||Q2 FY 17||Growth %|
|Emerging Markets #||5,506||4,834||14|
|Rest of World||2,318||1,979||17|
|Proprietary Products & Others||18||1,188||3||%||17||1,078||3||%||10|
|Revenue Mix by Segment [Sequential]|
|Particulars||Q2 FY 18||Q1 FY 18||Growth %|
|Emerging Markets #||5,506||5,747||-4|
|Rest of World||2,318||1,721||35|
|Proprietary Products & Others||18||1,188||3||16||1,053||3||%||13|
- Revenues from North America at Rs. 14.3 billion. Year-on-year decline of 11%, primarily on account of higher price erosions due to channel consolidation and increased competition in some of our key products namely Valgancyclovir, Azacitidine, Esomeprazole, etc.During the quarter we launched 4 new products i.e. Sevelamer Carbonate, Cefixime OS, Bupropion XL and Metaxalone tabs. Since Sevelamer carbonate was launched post the cut-off date for revenue recognition, no sales have been recorded during the quarter.As of 30 th September 2017, cumulatively 103 generic filings are pending for approval with the USFDA (100 ANDAs and 3 NDAs under 505(b)(2) route). Of these 100 ANDAs, 60 are Para IVs out of which we believe 28 have 'First to File' status.
- Revenues from Emerging Markets at Rs. 5.5 billion, year-on-year growth of 14%.
- Revenues from Russia at Rs. 3.2 billion, year-on-year growth of 20%. In constant currency i.e. in Ruble terms year-on-year growth of 13%. Growth driven by higher volume uptake in base business and new products.
- Revenues from other CIS countries and Romania market at Rs. 0.9 billion, year-on-year growth of 3%.
- Revenues from Rest of World (RoW) territories at Rs. 1.4 billion, year-on-year growth of 9%.
- Revenues from India at Rs. 6.4 billion, year-on-year growth of 2%. Partial recovery was witnessed in the inventory holding by the channel post the transition to the GST regime. Pre-GST transition, the reported numbers included the excise duty component with a corresponding charge in the income statement. Post the transition, revenues reported are lower to the extent of the ED component, though it's a profit neutral adjustment. Normalizing for this and some other transition related adjustments, the comparable year-on-year growth would be around 10%.
- Revenues from Europe at Rs. 2.4 billion, year-on-year growth of 37%. Growth primarily driven by new launches and volume uptake in some of the key products.
- Revenues from PSAI at Rs. 5.7 billion, year-on-year decline of 2%. On a sequential basis revenues registered a growth of 22% aided by improved order flow and supply situations.
- During the quarter, 16 DMFs were filed globally of which 2 were in the US. The cumulative number of DMF filings as of 30 th September, 2017 was 780.
- Gross profit margin at 53.3% and declined by ~270 bps over that of previous year, decline primarily on account of higher price erosions due to channel consolidation and increased competitive intensity in some of our key molecules in the US. Gross profit margin for GG and PSAI business segments are at 59.2% and 19.6% respectively.Gross profit margins improved 170 bps sequentially, aided by favorable manufacturing overheads leverage (higher revenues and lower overheads).
- SG&A expenses at Rs. 11.0 billion, a decrease of 6% both year-on-year and sequentially. In Q2 FY17 the company had accrued a potential liability of Rs. 344 million towards NPPA provision. After adjusting the base, the marginal decline is primarily on account of prudent control on spend.
- Research & development expenses at Rs. 4.2 billion. As % to Revenues- Q2 FY18: 11.8% | Q1 FY 18: 15.3% | Q2 FY17: 14.5%]. Compared to the trend, spend is lower partially on account of deferment in some of the milestone related payments to subsequent quarters. Focus continues on building complex generics, biosimilars and differentiated products pipeline.
- Net Finance expense at Rs. 24 million compared to the net finance income of Rs. 365 million in Q2FY17. The incremental expense of Rs. 389 million is on account of:
- Net foreign exchange gain of Rs. 47 million in the current quarter vs net foreign exchange gain of Rs. 37 million in the previous year.
- Decrease in profit on sales of investments by Rs. 289 million.
- Net increase in interest expense of Rs. 110 million.
- Profit after Tax at Rs. 2.8 billion.
- Diluted earnings per share is at Rs. 17.15.
- Capital expenditure is at Rs. 2.8 billion.
|Audio conference Participants can dial-in on the numbers below|
|Primary number:||91 22 3960 0616|
|Secondary number:||91 22 6746 5826|
|International Toll Free Number||USA||18667462133|
|Playback of call:||91 22 3065 2322, 91 22 6181 3322|
|Web-cast||More details will be provided through our website, www.drreddys.com|