Dr Reddy’s Q2 Results: Dr Reddy’s Q2 Results: Profit jumps 12% YoY to Rs 1,114 crore; revenue rises 9.4%

Dr Reddy’s Laboratories Ltd on Friday reported a nearly 12% year-on-year (YoY) rise in consolidated net profit for the quarter ended September at Rs 1,114 crore. The bottomline topped ET Now poll of Rs 819 crore.

Total revenue in the quarter increased 9.4% on year to Rs 6,332 crore.

Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) for the quarter rose about 40% on year to Rs 1,899 crore. The operating margin expanded 651 basis points to 29.99%.

Global generics sales, which make for the lion’s share of the company’s total turnover, increased 18% on year to Rs 5,595 crore. North America led the growth in this segment, seeing a rise of 48% in sales. In Europe, generic sales growth was muted at 2%, while in emerging markets, it has declined by 6%. North America contributed the most to the overall sales of Dr Reddy’s in the quarter, followed by emerging markets and India.

The growth in global generic sales was driven by the launch of the anemia treatment drug Lenalidomide capsules in the US market and sequential improvement in Russia sales, Dr Reddy’s said in a release. However, the growth was partly offset by price erosion in the generic markets and a higher base due to Covid-related product sales in the previous year.

In India, sales growth was muted at 1% due to a higher base of last year, which included contribution from Covid-related product sales. Adjusted for this, the company has seen a double-digit growth in sales. Sales in Russia, another key market for the drugmaker, improved in the quarter. This region saw a 4% YoY growth on account of new product launches, increase in prices and favorable movement of forex rates.

On the cost front, selling, general and administrative (SG&A) expenses increased 4% YoY. Research and development costs as a percentage of revenue dipped to 7.7% in Q2 from 8.3% in Q1.

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