Dr. Reddy's Q1 profit surges 18% to ₹1,403 cr

Pharmaceutical major Dr. Reddy's Laboratories' profit after tax for the April-June quarter of 2023-24 stood at ₹1,402.5 crore, surging as much as 18.09% year-on-year (YoY) against ₹1,187.6 crore in the same period last year, while beating analysts’ estimates. The revenue witnessed 29% growth at ₹6,738.4 crore in the Q1 of FY24, against ₹5,215.4 crore YoY, driven by sales in North America, emerging markets and Europe.

The company's gross margin stood at 58.7%, which increased by 880 bps (basis points) year-on-year and 150 bps QoQ. "The improvement in gross margin was primarily driven by favourable product mix and higher manufacturing leverage partly offset by the benefit from brand divestment income during the previous year and price erosion in certain products. QoQ growth was primarily on account of favourable product mix partly offset by brand divestment income benefit during the preceding quarter," Dr. Reddy's says via a stock exchange filing.

During the quarter under review, the EBITDA (earnings before interest tax depreciation and amortisation) stood at ₹6,738 crore as against ₹1,779 crore in the same period last year. The EBITDA margin stood at 31.7%, compared to 34.1% in the year-ago period.

"We delivered strong sales growth and witnessed robust margin expansion in Q1FY24 driven by market share gains & new product momentum in our US generics business and superior performance in Russia. We are on track in executing our strategy, delivering growth while continuing to invest in future growth drivers and innovation to create sustainable value," says G V Prasad, co-chairman & MD.

The company's total expenses on research and development (R&D) during the quarter under review stood at ₹498.4 crore. The capital expenditure was ₹360 crore and free cash flow stood at ₹670 crore in Q1 of FY24. The net cash surplus of the company stood at ₹4,980 crore in the June quarter of FY24.

Shares of Dr. Reddy's surged as much as 1.15% to hit a 52-week high of ₹5,489.05 apiece on the BSE today. The scrip closed at ₹5,476.5, higher by 0.93% on Wednesday. During the session, the company’s market capitalisation stood at ₹91,209.68 crore as 9,392 shares exchanged hands on the BSE against the two-week average of 0.17 lakh shares. At present, shares of the pharmaceutical major is trading 37.3% higher than the 52-week low of ₹3,996.10, which the company touched on September 19 last year.