Q3FY25 Quarterly Results Dr. Reddy’s Laboratories Limited

Learn Team
January 28, 2025

Dr. Reddy’s began their journey as a supplier to Indian drug manufacturing and now they are working as an International pharmaceutical company. The company produced pharmaceutical products and made more than 190+ medicines, diagnostic kits, critical care, biotechnology, and active pharmaceutical products. The company has permission from the U.S. Food and Drug Administration (FDA) which helps the company to operate in market of US and Europe. Dr. Reddy’s is listed on the New York stock exchange and has more than 50 subsidiaries in India and other nations. The company recently launched its Q3 results of FY2025.

Quarterly results of Dr. Reddy’s & subsidiaries regional

Revenue in billion	Q3FY25	Q3FY24	YOY	Q2FY25	QoQ
Particulars	₨	₨	Gr %	₨	Gr %
Global Generics	73,753	63,095	17	71,576	3
North America	33,834	33,492	1	37,281	( 9 )
Europe*	12,096	4,970	143	5,770	110
India	13,464	11,800	14	13,971	( 4 )
Emerging Markets	14,358	12,833	12	14,554	( 1 )
Pharmaceutical Services and Active Ingredients ( PSAI )	8,219	7,839	5	8,407	( 2 )
Others	1,614	1,214	33	179	802
Total	83,586	72,148	16	80,162	4

Global generics

Global generic earned revenue in Q3 at ₨ 73.8 billion, On a YOY basis, growth is 17% and 3% on a QoQ basis. Company NRT portfolio is 7% on a YoY basis and has seen a 5% decline in QoQ basis. The majority of growth comes from revenue of the acquired NRT (Nicotine Replacement Therapy) portfolio, higher volumes, and new product launches.

North america

The company makes revenue of ₨33.8 billion and the company gets 1% growth on a YoY basis and has seen a decline of 9% on a QoQ basis. There is an increase in volume growth with new launches of products and favorable forex was offset by price erosion on a YoY basis. This decline is mainly due to the reason of lower sales of specific products including Lenalidomide. In Q3 company launched 4 new products and a total 11 products in 9 months and the company also filed 3 new drugs abbreviated new drug applications (ANDAs) with the USFDA.

Europe

In Europe company revenue in Q3FY25 at ₨12.1 billion and YoY growth is 143% and QoQ growth is 110%. In Q3 revenue majority includes the recently acquired NRT portfolio if we remove the NRT margin then 22% is YoY growth and 5% QoQ growth. In Germany, NRT is at ₨ 3.3 billion where YoY growth is 24% and QoQ growth is 3%, and In the UK at ₨1.9 billion where YoY and QoQ growth are 39% & 16% respectively. The remaining area of Europe at ₨0.8 billion with 10% YoY and 8% QoQ growth.

India

Company performance in India is improved on a YoY basis with a decline in QoQ basis. In Q3FY25 company revenue was at ₨13.5 billion growth of 16% on a YoY basis and a fall of 4% on a QoQ basis. The primary reason of YoY growth is in-licensed vaccine portfolio and new product launches & price increases.

Emerging markets

Revenue from emerging markets in Q3FY25 at ₨14.4 billion there was 12% growth in QoQ and YoY basis. Yearly growth mainly comes from an increase in market share and new product launches. In Russia company at ₨7 billion in revenue and 19% & 2% growth in QoQ and YoY respectively. Commonwealth Independent States countries and Romania at ₨2.4 billion revenue and 4% & 13% QoQ and YoY growth. Revenue from the rest of the world at ₨4.9 billion, 11% YoY growth, and 7% decline in QoQ.

Pharmaceutical service and active ingredients-:

Revenue in Q3FY25 at ₨ 8.2 billion, YoY growth is 5% and QoQ decline is 2%. The decline in QoQ growth was mainly due to moderation in the growth of the service sector.

Consolidated quarterly results

	Q3FY25		Q3FY24		YoY	Q2FY25		QoQ
Particulars	( $ )	(₨)	( $ )	( ₨ )	Gr %	( $ )	( ₨ )	Gr %
Revenues *	977	83,586	843	72,148	16	937	80,162	4
Cost of Revenues	404	34,534	350	29,945	15	379	32,393	7
Gross Profit	573	49,052	493	42,203	16	558	47,769	3
% of Revenues		58.7 %		58.5 %			59.6 %
Selling , General & Administrative Expenses	282	24,117	236	20,228	19	269	23,007	5
% of Revenues		28.9 %		28.0 %			28.7 %
Research & Development Expenses	78	6,658	65	5,565	20	85	7,271	( 8 )
% of Revenues		8.0 %		7.7 %			9.1 %
Impairment of Non - Current Assets , net	( 0 )	( 4 )	1	110	( 104)	11	924	(100)
Other ( Income ) / Expense , net	( 5 )	( 439 )	(11 )	( 967 )	( 55 )	(12 )	( 984 )	( 55 )
Results from Operating Activities	219	18,720	202	17,267	8	205	17,551	7
Finance ( Income ) / Expense , net	0	20	(11 )	( 963 )	(102 )	(18 )	( 1555 )	(101)
Share of Profit of Equity Accounted Investees, net of tax	( 0 )	( 42 )	( 0 )	( 27 )	56	( 1 )	( 61 )	( 31 )
Profit before Income Tax	219	18,742 *	213	18,257	3	224	19,167	( 2 )
% of Revenues		22.4 %		25.3 %			23.9 %
Income Tax Expense	55	4,704	52	4,468	5	67	5,752	( 18 )
Profit for the Period	164	14,038	161	13,789	2	157	13,415	5
% of Revenues		16.8 %		19.1 %			16.7 %
Attributable to Equity holders of the parent company	165	14,133	161	13,789	2	147	12,553	13
Attributable to Non - controlling interests	( 1 )	( 95 )		-	-	10	862	-
Diluted Earnings per share ( EPS )	0.20	16.94	0.19	16.54 ^	2	0.18	15.05	13

Gross margin in Q3FY25 at 58.7%, YoY basis rise of 20 bps, and QoQ decline of 91 bps.
Selling, general, and administrative expenses increased by 19% on YoY and 5% on QoQ basis. The increase is primarily on account of NRT business, higher investment in sales & other marketing activities.
Net income is fall from ₨ 1 billion to ₨02 billion it is because of higher foreign currency exchange loss and interest expense as compared to interest income.
Profit before tax in Q3FY25 at ₨7 billion an increase of 3% on a YoY basis and a decline of 2% on a QoQ basis.
Diluted earning per share is ₨94 in Q3FY25.
EBITDA at ₨0 billion, a 9% increase in YoY basis and flat QoQ.
Operating working capital at ₨8 billion in Q3FY25.
Capital expenditure at ₨1 billion.
Net debt to equity is (0.05) in Q3FY25.
ROCE in Q3FY25 at 27.8%.
Revenue at ₨83,586 million in Q3FY25.

Conclusion

Currently Dr. Reddy’s laboratories stock is trading in slight negative and from previous 3-5 months performance of stock is also in negative. The Q3FY25 results of company have shown growth in revenue on YoY and QoQ basis. Company acquisition of NRT (Nicotine Replacement Theory) added significant gain in revenue in abroad mainly in Europe region. Dr. Reddy’s laboratories filled 3 new abbreviated drugs and 75 pending for approval by USFDA, In future as these drugs get approvals it will increase demand of company products. In next quarter there is high probability for better financial number of company.