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Dr Reddy’s Laboratories Q4 Results 2022

19 May 2022

Pharmaceutical giant and drug manufacturer Dr Reddy’s Laboratories posted its Q4 FY22 results on May 19, 2022. 

The company’s profit for the period is down 76% YoY (Year on Year) to Rs 87.5 crore in the quarter under review from Rs 362 last year. On a sequential basis, the profit for the period was down by a whopping 88% QoQ (Quarter on Quarter) to Rs 87.5 crore from Rs 706 crore in the year ago period.

Revenue up by 15% to Rs 5,436 crore from Rs 4,728 crore last year. On a QoQ basis, the revenue is up a meager 2% to Rs 5,436 crore from Rs 5,319.

The company’s numbers were largely short due to a decline in export, and slowdown in demand in the domestic market. Also a staggering rise in the cost of raw materials attributed to the weak March quarter. The cost of raw materials in Q4 FY22 was up to Rs 1,303 crore from Rs 1,072 crore in the previous quarter and Rs 1,026 crore in the year ago period.

More on Dr Reddy’s Q4 Results 2022

The total expenses are up nearly 40% YoY and 20.5% QoQ to Rs 5,348 crore in the quarter under review. The impairment of non-current assets cost the company an expense of Rs 741 crore in Q4 FY22, an expense which was a mere Rs 4.7 crore in the previous quarter and Rs 1.5 crore in the year ago period.

Dr Reddy’s board has recommended a dividend of Rs 30 per equity share, subject to approval of the shareholders.

The stock is up about 0.77%. 

Highlights of Dr Reddy’s Quarterly Results

  • Revenue up 15% YoY to Rs 5,436 crore Global generics segment up by 16% YoY to Rs 17,900 crore from FY21
  • Q4 revenue up 19% YoY and 4% QoQ at Rs 4,600 crore
  • Other operating income came in at Rs 280 crore for the year against Rs 100 crore last year
  • EBITDA up 15% YoY, 3% QoQ to Rs 1,298 crore in the quarter under review.

Misses of Dr Reddy’s Results 2022

  • Profit for the period down by 76% YoY, 88% QoQ to Rs 87.5 crore 
  • Gross profit margin for the year stood at 53.1%, down by 120 base points over the last fiscal year amid lower export benefits and rising prices
  • Impairment charge came in at Rs 760 crore in FY22 due to product impairment of Tepilamide Fumarate Extended Release Tablets
  • Earnings Per Share (EPS) down to 5.84 from Rs 33.61 last year

Segment-wise revenue

  • Pharmaceutical Services and Active Ingredients: Revenue down 5% YoY to Rs 755 crore
  • Proprietary Products and Others: Revenue up 10% YoY to Rs 693 crore 

What the Management says

Commenting on the results, Dr Reddy’s Co-Chairman and MD, GV Prasad said, that the company delivered healthy growth in revenue, though the profits were impacted by impairment charges. In spite of multiple external challenges, the core businesses performed well driven by an increase in market share, strong launches and productivity improvement. The company will continue to focus on growing its core business, invest in future growth drivers, and work towards greater integration of sustainability in our business.

Other things to know about Dr Reddy’s

  • On February 3, 2022, the company acquired 100% of Nimbus Health for Rs 42.1 crore
  • The company’s P/E ratio is at 33.21 against the industry average of 33.47
  • Dr Reddy’s P/B ratio is at 3.67 against the industry average of 4.80
  • The company’s dividend yield is at 0.64% against the industry average of 0.85%
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