1 month ago
Hyderabad-based Dr Reddy's Laboratories (DRL) posted a 0.90 per cent year-on-year (Y-o-Y) decline in profit after tax (PAT) during the first quarter of financial year 2024-25, concluded on June 31, reaching Rs 1,392.4 crore. DRL’s revenue from operations rose by 13.88 per cent YoY to Rs 6,757.9 crore.
On a sequential basis, the company exhibited an 8.18 per cent increase in revenue, along with PAT, which also rose by 6.31 per cent.
Commenting on the results, co-chairman and managing director, G V Prasad said: “We had a good start to the new fiscal year and our growth and profitability were mainly driven by our generics business. We continue to strengthen our core businesses and have made strategic investments in biologics, consumer healthcare, and innovation to drive patient impact and value creation.”
DRL's growth was primarily driven by the robust performance of the global generics business, particularly in North America and India.
Global Generics (GG) contributed significantly to the overall growth, with revenues reaching Rs 6,890 crore. The business experienced a 15 per cent Y-o-Y and 13 per cent quarter-on-quarter (Q-o-Q) revenue increase, primarily due to increased sales volumes driven by new product launches and the integration of the recently acquired vaccine portfolio in India. However, this growth was partially offset by pricing pressures.
The business in the North America region was a key growth driver, with revenues surging 20 per cent Y-o-Y and 18 per cent Q-o-Q to Rs 3,850 crore. This growth was fuelled by increased sales volumes of existing products and the successful launch of three new products. The company also filed one new Abbreviated New Drug Application (ANDA) and currently has 80 generic filings pending approval from the US Food and Drug Administration (FDA).
The revenue growth in the European region was more modest, at 4 per cent Y-o-Y and 1 per cent Q-o-Q, reaching Rs 530 crore. The region benefited from improved sales volumes and new product launches but faced challenges from price erosion. Germany was the standout performer with 14 per cent YoY growth, while the UK experienced a 7 per cent YoY decline.
The Indian market revenues increased 15 per cent Y-o-Y and 18 per cent Q-o-Q. This growth was primarily driven by the launch of new products, including the recently in-licensed vaccine portfolio. The company's India Pharmaceutical Market (IPM) rank was 10 for the quarter.
The emerging markets segment reported a 3 per cent Y-o-Y revenue growth to Rs 1,190 crore in Q1 FY25, despite a 2 per cent QoQ decline. While market share gains and new product launches contributed positively, unfavourable foreign exchange rates and price erosion impacted overall growth.
Russia revenues declined 2 per cent Y-o-Y to Rs 550 crore due to adverse currency exchange rates, partially offset by price hikes and increased sales volumes. However, the region showed strong 11 per cent Q-o-Q growth driven by improved sales.
The Commonwealth of Independent States (CIS) and Romania faced challenges, with a 2 per cent Y-o-Y and 11 per cent Q-o-Q revenue decline. Decreased sales volumes were the primary culprit, partially mitigated by price increases.
The Rest of World (RoW) region exhibited 11 per cent Y-o-Y growth to Rs 440 crore, attributed to higher sales volumes and new product introductions. However, an 11 per cent Q-o-Q decline was observed due to reduced sales and price erosion.
The company launched 17 new products across the emerging markets segment during the quarter.
Pharmaceutical Services and Active Ingredients (PSAI) reported 14 per cent Y-o-Y revenue growth, driven by increased sales volumes and new product contributions. However, a 7 per cent Q-o-Q decline was observed due to lower sales of certain products. The company filed 11 Drug Master Files (DMFs) globally during the quarter.
