Dr. Reddy’s Q4 Review – Healthy Revenues; One-Offs Suppress Profits: ICICI Securities

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Dr. Reddy’s Laboratories Ltd.’s Q4 FY22 performance was healthy with revenue growing 11.2% YoY to Rs 52.6 billion (our estimate: Rs 51.3 billion) driven by growth across markets.

Domestic sales grew 14.7% YoY to Rs 9.7 billion. Despite pricing pressures, U.S. revenue grew 5.1% QoQ to $263 million on the back of new product launches and scale up of existing products.

Dr. Reddy’s recorded several one-offs during the quarter (sale of two brands in Russia and impairment on few assets).

Adjusted Ebitda margin at 20.7% was marginally lower than our estimate of 21.5%. Adjusted profit after tax declined 31% YoY to Rs 3.2 billion.

We expect growth momentum in branded generics business and new launches in U.S. in coming quarters to continue.

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