Q1 2025 Dr Reddy's Laboratories Ltd Earnings Call Transcript
Key Points
- Dr Reddy's Laboratories Ltd (RDY) reported a 14% year-on-year revenue growth for Q1 FY25, driven by the generics business in the US and the in-licensing of Sanofi's vaccine portfolio in India.
- The company achieved a consolidated gross profit margin of 60.4%, an increase of 170 basis points year-on-year.
- EBITDA for the quarter grew by 15% quarter-on-quarter, reaching INR 2,160 crores (USD 259 million), with an EBITDA margin of 28.2%.
- The company has a net cash surplus of USD 808 million as of June 30, 2024, indicating strong financial health.
- Dr Reddy's Laboratories Ltd (RDY) continues to expand its global consumer healthcare business, highlighted by the acquisition of Nicotinell and other market-leading brands in the Nicotine Replacement Therapy category.
- SG&A expenses increased by 28% year-on-year and 11% quarter-on-quarter, primarily due to investments in new business initiatives and higher freight rates.
- The R&D spend for the quarter increased by 24% year-on-year, which could impact short-term profitability.
- The company's gross margins were partially offset by price erosion in the generics markets.
- The USFDA issued Form 483 with observations for two of Dr Reddy's Laboratories Ltd (RDY)'s manufacturing facilities, indicating potential regulatory challenges.
- The free cash flow generated during the quarter was relatively low at INR 227 crores (USD 27 million), despite strong revenue growth.
Ladies and gentlemen, good day, and welcome to Q1 FY25 earnings conference call of Dr. Reddy's Laboratories Limited. (Operator Instructions) Please note that this conference is being recorded.
I now hand the conference over to Ms. Richa Periwal. Thank you, and over to you.
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Thank you. A very good morning and good evening to all of you, and thank you for joining us today for the Dr. Reddy's quarter one FY25 earnings conference call. We have with us the leadership team of Dr. Reddy's comprising Mr. Erez Israeli, our CEO; Mr. Parag Agarwal, our CFO; Mr. M. V. Narasimham, our Deputy CFO; M. V. Ramana, our CEO for Branded Markets and the entire Investor Relations team.
Earlier during the date, we have released our results and the same is also posted on our website. We will begin the call with opening remarks from the management, following which we'll have the forum open for a Q&A session. Please note that today's call is copyrighted material of Dr.
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