Dr Reddy Makes Two Significant Changes in Q1 FY25

Dr Reddy makes two major developments in Q1 FY25. They are company plans to split its equity shares. Each equity share with a face value of Rs. 5 will be divided into 5 equity shares with a face value of Re. 1 each.

This move aims to enhance liquidity and make shares more affordable to retail investors. Additionally, each American Depositary Share (ADS) of the company will continue to represent one underlying equity share. Consequently, the number of ADSs held by an American Depositary Receipt holder will increase in proportion to the rise in the number of equity shares.

The sub-division will be subject to approval by the company’s members through a postal ballot process. The record date for the split will be announced in due course. Post-split, the authorized share capital will remain at Rs. 1,450,000,000, with 1,450,000,000 equity shares of Re. 1 each. The issued capital and paid-up capital will both be Rs. 834,148,505, divided into 834,148,505 equity shares of Re. 1 each.

Dr. Reddy’s has approved a fund infusion of up to GBP 500 million in its wholly owned subsidiary, Dr. Reddy’s Laboratories SA, Switzerland. This investment will support the acquisition of Nicotinell® and related brands from Haleon Group.

The acquisition involves purchasing shares of Northstar Switzerland SARL, a Haleon Group company, for up to GBP 500 million. This includes an upfront payment of GBP 458 million and contingent payments of up to GBP 42 million based on sales targets for 2024 and 2025.

The NRT (Nicotine Replacement Therapy) business will transition into Dr. Reddy’s in phases between April 2025 and February 2026, with Haleon Group providing distribution and related services during the transition.

These strategic moves by Dr. Reddy’s are expected to enhance shareholder value and strengthen the company's market position.

Source: Here 

Dr Reddy Q1 FY25 Results

Dr. Reddy's Laboratories Ltd. (BSE: 500124 | NSE: DRREDDY | NYSE: RDY | NSEIFSC: DRREDDY) announced its consolidated financial results for the quarter ended June 30, 2024. The results are based on consolidated financial statements under International Financial Reporting Standards (IFRS).

Key Financial Highlights:

Dr. Reddy's saw a strong revenue growth of 14% year-on-year, reaching ₹76,727 million. Profit before tax rose by 2% year-on-year, highlighting the company's solid financial performance.

• Revenues: ₹76,727 million, up 14% YoY and 8% QoQ.
• Gross Margin: 60.4%, up from 58.7% in Q1FY24 and 58.6% in Q4FY24.
• SG&A Expenses: ₹22,691 million, up 28% YoY and 11% QoQ.
• R&D Expenses: ₹6,193 million, 8.1% of revenues.
• EBITDA: ₹21,599 million, 28.2% of revenues.
• Profit Before Tax: ₹18,821 million, up 2% YoY and 18% QoQ.
• Profit After Tax: ₹13,920 million, down 1% YoY and up 7% QoQ.

Revenue Mix by Segment:

Dr. Reddy's Laboratories experienced significant growth across various segments in Q1 FY25. Global generics, particularly in North America and India, were key contributors to the overall revenue increase.

• Global Generics: ₹68,858 million, up 15% YoY and 13% QoQ.
  • North America: ₹38,462 million, up 20% YoY and 18% QoQ.
  • Europe: ₹5,265 million, up 4% YoY and 1% QoQ.
  • India: ₹13,252 million, up 15% YoY and 18% QoQ.
  • Emerging Markets: ₹11,878 million, up 3% YoY and down 2% QoQ.
• Pharmaceutical Services and Active Ingredients (PSAI): ₹7,657 million, up 14% YoY and down 7% QoQ.
• Others: ₹212 million, down 64% YoY and 85% QoQ.

Other Highlights:

Dr. Reddy's Laboratories reported notable operational metrics and financial figures in Q1 FY25. The company saw improvements in EBITDA, working capital, and cash flow, reflecting strong business performance and financial stability.

• EBITDA: ₹21.6 billion, up 1% YoY and 15% QoQ.
• Operating Working Capital: ₹115.5 billion.
• Capital Expenditure: ₹4.9 billion.
• Free Cash Flow: ₹2.3 billion.
• Net Cash Surplus: ₹67.3 billion.
• Debt to Equity Ratio: (0.23).
• Return on Capital Employed (RoCE): Annualized at 33%.

Dr. Reddy’s Laboratories has shown robust growth in Q1 FY25, driven by strong performances in global generics, particularly in North America and India. The company’s strategic acquisitions and have positioned it for continued success in the coming quarters.

Dr Reddy Lab 

Dr. Reddy's Laboratories, founded in 1984, is committed to providing affordable and innovative medicines. The company operates in core businesses including Active Pharmaceutical Ingredients (API), generics, branded generics, biosimilars, and over-the-counter products, serving over half a billion patients worldwide.

They aim to triple their reach by 2030. Dr. Reddy's focuses on unmet patient needs in areas like gastroenterology, cardiovascular, diabetology, oncology, pain management, and dermatology. They are investing in future businesses such as drug discovery, clinically-differentiated assets, and digital healthcare.

Known for their deep science capabilities and pioneering work, Dr. Reddy's also emphasizes progressive people practices and rigorous governance standards, having been the first Asian pharma company outside Japan to list on the NYSE.