SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
July 2020
Commission File Number 1-15182
DR. REDDY’S LABORATORIES LIMITED
(Translation of registrant’s name into English)
8-2-337, Road No. 3, Banjara Hills
Hyderabad, Telangana 500 034, India
+91-40-49002900
______________
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ______
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ______
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ¨ No x
If “Yes” is marked, indicate below the file number assigned to registrant in connection with Rule 12g3-2(b): 82-________.
DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
We hereby furnish the United States Securities and Exchange Commission with copies of the following information about our public disclosures regarding our results of operations and financial condition for the quarter ended June 30,2020.
On July 29, 2020, we announced our results of operations for the quarter ended June 30, 2020. We issued a press release announcing our results under International Financial Reporting Standards (“IFRS”), IFRS Unudited Consolidated Financial Results, Ind AS Unudited Consolidated Financial Results with Limited Review report and Ind AS Unudited Standalone Financial Results with Limited Review report for the quarter June 30, 2020, a copy of which is attached to this Form 6-K as Exhibit 99.1 , 99.2 , 99.3 and 99.4 respectively.
We have also made available to the public on our web site, www.drreddys.com, the following: IFRS Unudited Consolidated Financial Results, Ind AS Unaudited Consolidated Financial Results and Ind AS Unaudited Standalone Financial Results for the quarter ended June 30, 2020.
Exhibits
SIGNATURES |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
DR. REDDY’S LABORATORIES LIMITED (Registrant) | |||
Date: July 29, 2020 | By: | /s/ Sandeep Poddar | |
Name: | Sandeep Poddar | ||
Title: | Company Secretary |
Exhibit 99.1
CONTACT | ||
DR. REDDY'S LABORATORIES LTD. | Investor relationS | Media relationS |
8-2-337, Road No. 3, Banjara Hills, | AMIT AGARWAL | APARNA TEKURI |
Hyderabad - 500034. Telangana, India. | amita@drreddys.com | aparnatekuri@drreddys.com |
(Ph: +91-40-4900 2135) | (Ph: +91-40-4900 2446) |
Dr. Reddy’s Q1 FY21 Financial Results
Hyderabad, India, July 29, 2020: Dr. Reddy’s Laboratories Ltd. (BSE: 500124 | NSE: DRREDDY | NYSE: RDY) today announced its consolidated financial results for the quarter ended June 30, 2020. The information mentioned in this release is on the basis of consolidated financial statements under International Financial Reporting Standards (IFRS).
Revenues
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Rs. 4,418 Cr [YoY: Up 15%; QoQ: Down 0.3%] |
Gross Margin
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56.0% [Q1 FY20: 51.7%; Q4 FY20: 51.5%] |
SG&A Expenses
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Rs. 1,279 Cr [YoY: Up 6%; QoQ: Up 5%] |
R&D Expenses
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Rs. 398 Cr [9.0% of Revenues] |
EBITDA*
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Rs. 1,162 Cr [YoY: Up 2%; QoQ: Up 16%] |
Profit before Tax
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Rs. 879 Cr [19.9% of Revenues] |
Profit after Tax
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Rs. 579 Cr [13.1% of Revenues] |
* Q1 FY20 includes a settlement income of Rs. 346 Cr, adjusted for which the EBITDA YoY growth is 47%
Commenting on the results, Co-chairman & MD, G V Prasad said “the current quarter’s financial performance has been strong across all parameters. I am glad that we have been able to serve our patients well and ensured continuity of business operations despite the challenging times. We have started integration of the acquired business from Wockhardt and executed two important licencing arrangements for treatment options for COVID-19. Currently, we are working towards bringing both these drugs to multiple markets”.
1 |
All amounts in millions, except EPS | All US dollar amounts based on convenience translation rate of I USD = Rs. 75.53 |
Dr. Reddy’s Laboratories Limited and Subsidiaries
Consolidated Income Statement
Q1 FY21 | Q1 FY20 | YoY | Q4 FY20 | QoQ | ||||||||||||||||||||||||||||
Particulars | ($) | (Rs.) | ($) | (Rs.) | Gr % | ($) | (Rs.) | Gr% | ||||||||||||||||||||||||
Revenues | 585 | 44,175 | 509 | 38,435 | 15 | 587 | 44,318 | (0 | ) | |||||||||||||||||||||||
Cost of Revenues | 257 | 19,420 | 246 | 18,576 | 5 | 285 | 21,510 | (10 | ) | |||||||||||||||||||||||
Gross Profit | 328 | 24,755 | 263 | 19,859 | 25 | 302 | 22,808 | 9 | ||||||||||||||||||||||||
Operating Expenses | ||||||||||||||||||||||||||||||||
Selling, General & Administrative expenses | 169 | 12,786 | 160 | 12,065 | 6 | 161 | 12,177 | 5 | ||||||||||||||||||||||||
Research and Development expenses | 53 | 3,980 | 48 | 3,609 | 10 | 55 | 4,190 | (5 | ) | |||||||||||||||||||||||
Impairment of non-current assets | 0 | 7 | (100 | ) | ||||||||||||||||||||||||||||
Other operating income | (2 | ) | (118 | ) | (50 | ) | (3,759 | ) | (97 | ) | (2 | ) | (168 | ) | (30 | ) | ||||||||||||||||
Results from operating activities | 107 | 8,107 | 105 | 7,944 | 2 | 87 | 6,602 | 23 | ||||||||||||||||||||||||
Net finance income | (8 | ) | (605 | ) | (5 | ) | (393 | ) | 54 | (6 | ) | (435 | ) | 39 | ||||||||||||||||||
Share of profit of equity accounted investees | (1 | ) | (77 | ) | (2 | ) | (163 | ) | (53 | ) | (1 | ) | (105 | ) | (27 | ) | ||||||||||||||||
Profit before Income Tax | 116 | 8,789 | 113 | 8,500 | 3 | 95 | 7,142 | 23 | ||||||||||||||||||||||||
Income tax | 40 | 2,996 | 25 | 1,872 | 60 | (7 | ) | (500 | ) | (699 | ) | |||||||||||||||||||||
Profit for the period | 77 | 5,793 | 88 | 6,628 | (13 | ) | 101 | 7,642 | (24 | ) | ||||||||||||||||||||||
Diluted Earnings Per Share (EPS) | 0.46 | 34.86 | 0.53 | 39.91 | (13 | ) | 0.61 | 46.01 | (24 | ) |
As a % to Revenues | Q1 FY21 | Q1 FY20 | Q4 FY20 | |||||||||
Gross Profit | 56.0 | 51.7 | 51.5 | |||||||||
SG&A | 28.9 | 31.4 | 27.5 | |||||||||
R&D | 9.0 | 9.4 | 9.5 | |||||||||
EBITDA | 26.3 | 29.5 | 22.6 | |||||||||
PBT | 19.9 | 22.1 | 16.1 | |||||||||
PAT | 13.1 | 17.2 | 17.2 |
EBITDA Computation
Q1 FY21 | Q1 FY20 | Q4 FY20 | ||||||||||||||||||||||
Particulars | ($) | (Rs.) | ($) | (Rs.) | ($) | (Rs.) | ||||||||||||||||||
Profit before Income Tax | 116 | 8,789 | 113 | 8,500 | 95 | 7,142 | ||||||||||||||||||
Interest income (net)* | (4 | ) | (306 | ) | (3 | ) | (239 | ) | (1 | ) | (100 | ) | ||||||||||||
Depreciation | 28 | 2,120 | 28 | 2,124 | 28 | 2,080 | ||||||||||||||||||
Amortization | 14 | 1,020 | 13 | 958 | 12 | 885 | ||||||||||||||||||
Impairment | 0 | 0 | 0 | 0 | 0 | 7 | ||||||||||||||||||
EBITDA | 154 | 11,622 | 150 | 11,343 | 133 | 10,013 |
* Includes income from Investments
2 |
All amounts in millions, except EPS | All US dollar amounts based on convenience translation rate of I USD = Rs. 75.53 |
Key Balance Sheet Items
As on 30th Jun 2020 | As on 31st Mar 2020 | As on 30th Jun 2019 | ||||||||||||||||||||||
Particulars | ($) | (Rs.) | ($) | (Rs.) | ($) | (Rs.) | ||||||||||||||||||
Cash and cash equivalents and other investments | 374 | 28,227 | 345 | 26,068 | 377 | 28,439 | ||||||||||||||||||
Trade receivables (current & non-current) | 640 | 48,316 | 689 | 52,015 | 503 | 37,961 | ||||||||||||||||||
Inventories | 518 | 39,148 | 464 | 35,066 | 465 | 35,137 | ||||||||||||||||||
Property, plant and equipment* | 717 | 54,183 | 693 | 52,332 | 716 | 54,083 | ||||||||||||||||||
Goodwill and Other Intangible assets* | 609 | 45,991 | 419 | 31,653 | 633 | 47,821 | ||||||||||||||||||
Loans and borrowings (current & non-current) | 418 | 31,582 | 293 | 22,102 | 455 | 34,389 | ||||||||||||||||||
Trade payables | 252 | 19,038 | 221 | 16,659 | 197 | 14,842 | ||||||||||||||||||
Equity | 2,142 | 1,61,748 | 2,052 | 1,54,988 | 1,936 | 1,46,209 |
*On the basis of provisional allocation of purchase price for the business acquired from Wockhardt
Revenue Mix by Segment
Q1 FY21 | Q1 FY20 | YoY | Q4 FY20 | QoQ | ||||||||||||||||
Particulars | (Rs.) | (Rs.) | Growth % | (Rs.) | Growth % | |||||||||||||||
Global Generics | 35,075 | 32,982 | 6 | % | 36,398 | (4 | %) | |||||||||||||
North America | 17,282 | 16,323 | 6 | % | 18,072 | (4 | %) | |||||||||||||
Europe | 3,551 | 2,404 | 48 | % | 3,446 | 3 | % | |||||||||||||
India | 6,260 | 6,960 | (10 | %) | 6,839 | (8 | %) | |||||||||||||
Emerging Markets | 7,982 | 7,296 | 9 | % | 8,042 | (1 | %) | |||||||||||||
Pharmaceutical Services and Active Ingredients (PSAI) | 8,553 | 4,539 | 88 | % | 7,195 | 19 | % | |||||||||||||
Proprietary Products & Others | 547 | 914 | (40 | %) | 725 | (25 | %) | |||||||||||||
Total | 44,175 | 38,435 | 15 | % | 44,318 | 0 | % |
3 |
COVID-19 Update
In the current challenging times due to the COVID-19 pandemic, we are undertaking reasonable precautions to ensure the health and safety of our employees, including adhering to the social distancing norms, sanitization of our premises, usage of masks, gloves and other protective wears.
Our operations have continued without much impact. We continued our engagement with doctors through digital channels, ensured regular supplies of our products to meet with the market demand and continued our R&D activities including few projects pertaining to COVID-19.
While the sales volume were impacted in some of our markets due to lower prescriptions generated and fall in patient footfalls in pharmacies / clinics due to Covid-19, the pricing environment was relatively stable, new products launches continued and depreciation of rupee against the US dollar and Euro supported the business.
Revenue Analysis
Global Generics (GG)
Revenues from GG segment at Rs. 35.1 billion:
Ø | Year-on-year growth of 6% driven primarily by Europe and Emerging Markets. This was offset partially by decline in India. The overall growth was on account of volume traction in the base business, new product launches and aided by favorable forex rates, though offset partially due to price erosion. |
Ø | Sequential quarter decline of 4%, which is attributable to lower volumes across markets. |
North America
Revenues from North America at Rs. 17.3 billion:
Ø | Year-on-year growth of 6%, driven by contribution from new products launched and aided by a favorable forex rate, which was partially offset by price erosion. |
Ø | Sequential decline of 4%, on account of lower sales of certain key molecules. |
Ø | We launched six new products (Fenofibrate Tablets, Nitroglycerin Patch, Amphetamine Sulfate Tablets, Desmopressin Acetate Ampules, Colchicine Tablets and Abiraterone Acetate Tablets) |
Ø | We filed five new ANDAs during the quarter. As of 30th June 2020, cumulatively 101 generic filings are pending for approval with the USFDA (99 ANDAs and 2 NDAs under 505(b)(2) route). Of the 99 ANDAs, 54 are Para IVs and we believe 28 have ‘First to File’ status. |
4 |
Emerging Markets
Revenues from Emerging Markets at Rs. 8.0 billion. Year-on-year growth of 9%. Sequential decline of 1%:
Ø | Revenues from Russia at Rs. 3.3 billion. Year-on-year decline of 17% and sequential decline of 16%. Decline primarily on account of lower volumes due to lower prescriptions generated and fall in patient footfalls in pharmacies / clinics due to Covid-19. |
Ø | Revenues from other CIS countries and Romania market at Rs. 1.4 billion. Year-on-year growth of 15% driven by higher volumes and new product launches. Sequential decline of 22% on account of lower volumes. |
Ø | Revenues from Rest of World (RoW) territories at Rs. 3.3 billion. Year-on-year growth of 56% & sequential growth of 41%, primarily driven by new products and volume traction in base business. The growth was offset partially due to price erosion in some molecules. |
India
Revenues from India at Rs. 6.3 billion:
Ø | Year-on-year decline of 10% and sequential decline of 8%. The decline was on account of lower sales volume due to lower prescriptions generated and fall in patient footfalls in pharmacies / clinics due to Covid-19. |
Ø | We launched four new brands during the period. |
Ø | We completed the acquisition of select business from Wockhardt including the manufacturing plant located in Baddi, Himachal Pradesh in the quarter. |
Europe
Revenues from Europe at Rs. 3.6 billion:
Ø | Year-on-year growth of 48%, on account of new product launches and volume traction across markets. |
Ø | Sequential growth of 3%, aided by contribution by new products launched and favorable forex, offset partially by lower volumes. |
Pharmaceutical Services and Active Ingredients (PSAI)
Revenues from PSAI at Rs. 8.6 billion:
Ø | Year-on-year growth of 88% and sequential growth of 19% on account of higher volumes of certain products, increase in new product sales and favorable forex. | |
Ø | During the quarter we filed DMF for one product in the US. |
Proprietary Products (PP)
Revenues from PP at Rs. 56 million:
Ø | Year-on-year decline of 80% due to absence of the Neurology franchise products (the US and select territory rights of which were sold in the previous year). |
5 |
Income Statement Highlights:
Ø | Gross profit margin at 56.0%: |
- | Increased by ~430 bps over previous year and by ~450 bps sequentially, primarily on account of a favorable product mix and forex benefit. |
- | Gross profit margin for GG and PSAI business segments are at 61.4% and 33.4% respectively. |
Ø | SG&A expenses at Rs. 12.8 billion, increased by 6% on a year-on-year basis and by 5% sequentially. The increase was primarily attributable to higher freight cost due to shortage of carriers for shipping the goods from India to other countries due to COVID-19 related disruptions. |
Ø | R&D expenses at Rs. 4.0 billion. As % to revenues- Q1 FY21: 9.0% | Q4 FY 20: 9.5% | Q1 FY20: 9.4%. Our focus continues on building complex generics, bio-similars and differentiated products pipeline. We are also undertaking development of a few projects pertaining to COVID-19 related drugs. |
Ø | Other operating income at Rs. 118 million compared to Rs. 3.8 billion in Q1 FY20. Previous year included Rs. 3.5 billion received from Celgene pursuant to an agreement entered towards settlement of any claim the Company or its affiliates may have had for damages under section 8 of the Canadian Patented Medicines (Notice of Compliance) Regulations in regard to the Company’s ANDS for a generic version of REVLIMID brand capsules, (Lenalidomide) pending before Health Canada. |
Ø | Net Finance income at Rs. 605 million compared to Rs. 393 million in Q1 FY20. The increase is primarily on account of higher foreign exchange gain as compared to the previous year. |
Ø | Profit before Tax at Rs. 8.8 billion, increased by 3% year-on-year and by 23% sequentially. Adjusted for the Rs. 3.5 billion received from Celgene last year, the year-on-year growth is at 74%. |
Ø | Profit after Tax at Rs. 5.8 billion. The effective tax rate is around 34% for the quarter. The higher tax rate was primarily due to discontinuation of weighted deduction on R&D and completion of tax holiday for one of our plants. |
Ø | Diluted earnings per share is at Rs. 34.86. |
Other Highlights:
Ø | Capital expenditure is at Rs. 1.5 billion. |
Ø | Free cash-flow generated during the quarter stood at Rs. 9.3 billion (before acquisition related payout to Wockhardt of Rs. 15 billion). |
Ø | Net debt of the company is at Rs. 3.4 billion as on June 30, 2020. Consequently, net debt to equity ratio is 0.02. |
6 |
Earnings Call Details (05:30 pm IST, 08:00 am EDT, July 29, 2020)
The management of the Company will host an earnings call to discuss the Company’s financial performance and answer any questions from the participants.
Conference Joining Information |
Option 1: Express Join with DiamondPass™ |
Pre-register with the below link and join without waiting for the operator.
https://services.choruscall.in/DiamondPassRegistration/register?confirmationNumber=122477&linkSecurityString=5070ddaf
Option 2: Join through below Dial-In Numbers
| |
Universal Access Number:
|
+91 22 6280 1219 +91 22 7115 8120 |
Local Access Number: Available all over India |
+91 70456 71221 |
International Toll Free Number: |
USA: 1 866 746 2133 UK: 0 808 101 1573 Singapore: 800 101 2045 Hong Kong: 800 964 448 |
No password/pin number is necessary to dial in to any of the above numbers. The operator will provide instructions on asking questions before and during the call.
Play Back: The play back will be available after the earnings call, till August 6th, 2020. For play back dial in phone No: +91 22 7194 5757 | +91 22 6663 5757, and Playback Code is 58336.
Transcript: Transcript of the Earnings call will be available on the Company’s website: www.drreddys.com
About Dr. Reddy’s: Dr. Reddy’s Laboratories Ltd. (BSE: 500124, NSE: DRREDDY, NYSE: RDY) is an integrated pharmaceutical company, committed to providing affordable and innovative medicines for healthier lives. Through its three businesses - Pharmaceutical Services & Active Ingredients, Global Generics and Proprietary Products – Dr. Reddy’s offers a portfolio of products and services including APIs, custom pharmaceutical services, generics, biosimilars and differentiated formulations. Our major therapeutic areas of focus are gastrointestinal, cardiovascular, diabetology, oncology, pain management and dermatology. Dr. Reddy’s operates in markets across the globe. Our major markets include – USA, India, Russia & CIS countries, and Europe. For more information, log on to: www.drreddys.com.
Disclaimer: This press release may include statements of future expectations and other forward-looking statements that are based on the management’s current views and assumptions and involve known or unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. In addition to statements which are forward-looking by reason of context, the words "may", "will", "should", "expects", "plans", "intends", "anticipates", "believes", "estimates", "predicts", "potential", or "continue" and similar expressions identify forward-looking statements. Actual results, performance or events may differ materially from those in such statements due to without limitation, (i) general economic conditions such as performance of financial markets, credit defaults , currency exchange rates , interest rates , persistency levels and frequency / severity of insured loss events (ii) mortality and morbidity levels and trends, (iii) changing levels of competition and general competitive factors, (iv) changes in laws and regulations and in the policies of central banks and/or governments, (v) the impact of acquisitions or reorganization , including related integration issues, (vi) the susceptibility of our industry and the markets addressed by our, and our customers’, products and services to economic downturns as a result of natural disasters, epidemics, pandemics or other widespread illness, including coronavirus (or COVID-19), and (vii) other risks and uncertainties identified in our public filings with the Securities and Exchange Commission, including those listed under the "Risk Factors" and "Forward-Looking Statements" sections of our Annual Report on Form 20-F for the year ended March 31, 2020. The company assumes no obligation to update any information contained herein.
7 |
Exhibit 99.2
Unaudited consolidated financial results of Dr. Reddy's Laboratories Limited and its subsidiaries for the quarter ended 30 June 2020 prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB)
All amounts in Indian Rupees millions
Quarter ended | Year ended | |||||||||||||||||
Sl. No. | Particulars | 30.06.2020 | 31.03.2020 | 30.06.2019 | 31.03.2020 | |||||||||||||
(Unaudited) | (Audited) | (Unaudited) | (Audited) | |||||||||||||||
1 | Revenues | 44,175 | 44,318 | 38,435 | 174,600 | |||||||||||||
2 | Cost of revenues | 19,420 | 21,510 | 18,576 | 80,591 | |||||||||||||
3 | Gross profit (1 - 2) | 24,755 | 22,808 | 19,859 | 94,009 | |||||||||||||
4 | Selling, general and administrative expenses | 12,786 | 12,177 | 12,065 | 50,129 | |||||||||||||
5 | Research and development expenses | 3,980 | 4,190 | 3,609 | 15,410 | |||||||||||||
6 | Impairment of non current assets | - | 7 | - | 16,767 | |||||||||||||
7 | Other income, net | (118 | ) | (168 | ) | (3,759 | ) | (4,290 | ) | |||||||||
Total operating expenses | 16,648 | 16,206 | 11,915 | 78,016 | ||||||||||||||
8 | Results from operating activities [(3) - (4 + 5 + 6 + 7)] | 8,107 | 6,602 | 7,944 | 15,993 | |||||||||||||
Finance income | 838 | 665 | 690 | 2,461 | ||||||||||||||
Finance expense | (233 | ) | (230 | ) | (297 | ) | (983 | ) | ||||||||||
9 | Finance income, net | 605 | 435 | 393 | 1,478 | |||||||||||||
10 | Share of profit of equity accounted investees, net of tax | 77 | 105 | 163 | 561 | |||||||||||||
11 | Profit before tax (8 + 9 + 10) | 8,789 | 7,142 | 8,500 | 18,032 | |||||||||||||
12 | Tax expense/(benefit), net | 2,996 | (500 | ) | 1,872 | (1,466 | ) | |||||||||||
13 | Profit for the period / year (11 -12) | 5,793 | 7,642 | 6,628 | 19,498 | |||||||||||||
14 | Earnings per share: | |||||||||||||||||
Basic earnings per share of Rs.5/- each | 34.94 | 46.10 | 39.98 | 117.63 | ||||||||||||||
Diluted earnings per share of Rs.5/- each | 34.86 | 46.01 | 39.91 | 117.40 | ||||||||||||||
(Not annualised) | (Not annualised) | (Not annualised) |
Segment reporting (consolidated)
All amounts in Indian Rupees millions
Quarter ended | Year ended | |||||||||||||||||
Sl. No. | Particulars | 30.06.2020 | 31.03.2020 | 30.06.2019 | 31.03.2020 | |||||||||||||
(Unaudited) | (Audited) | (Unaudited) | (Audited) | |||||||||||||||
Segment wise revenue and results: | ||||||||||||||||||
1 | Segment revenue: | |||||||||||||||||
a) Pharmaceutical Services and Active Ingredients | 10,090 | 8,673 | 5,933 | 31,657 | ||||||||||||||
b) Global Generics | 35,075 | 36,398 | 32,982 | 138,123 | ||||||||||||||
c) Proprietary Products | 56 | 2 | 281 | 7,949 | ||||||||||||||
d) Others | 491 | 723 | 633 | 2,781 | ||||||||||||||
Total | 45,712 | 45,796 | 39,829 | 180,510 | ||||||||||||||
Less: Inter-segment revenues | 1,537 | 1,478 | 1,394 | 5,910 | ||||||||||||||
Net revenue from operations | 44,175 | 44,318 | 38,435 | 174,600 | ||||||||||||||
2 | Segment results: | |||||||||||||||||
Gross profit from each segment | ||||||||||||||||||
a) Pharmaceutical Services and Active Ingredients | 2,856 | 2,043 | 325 | 6,190 | ||||||||||||||
b) Global Generics | 21,526 | 20,332 | 19,007 | 78,449 | ||||||||||||||
c) Proprietary Products | 56 | (7 | ) | 207 | 7,744 | |||||||||||||
d) Others | 317 | 440 | 320 | 1,626 | ||||||||||||||
Total | 24,755 | 22,808 | 19,859 | 94,009 | ||||||||||||||
Less: Selling and other un-allocable expenditure, net of other income | 15,966 | 15,666 | 11,359 | 75,977 | ||||||||||||||
Total profit before tax | 8,789 | 7,142 | 8,500 | 18,032 |
Global Generics segment includes operations of Biologics business. Inter-segment revenues represent sale from Pharmaceutical Services and Active Ingredients to Global Generics at cost.
Notes:
1 | The unaudited results have been reviewed by the Audit Committee of the Board on 29 July 2020 and approved by the Board of Directors of the Company at their meeting held on 29 July 2020. The above financial results have been prepared in accordance with International Financial Reporting Standards and its interpretations (IFRS), as issued by the International Accounting Standards Board (IASB). |
2 | On 10 June 2020, the Company completed the acquisition of select divisions of Wockhardt Limited’s branded generics business in India and the territories of Nepal, Sri Lanka, Bhutan and Maldives. The business comprises a portfolio of 62 brands in multiple therapy areas, such as respiratory, neurology, venous malformations, dermatology, gastroenterology, pain, and vaccines. This entire portfolio has been transferred to the Company, along with related sales and marketing teams, the manufacturing plant located in Baddi, Himachal Pradesh, and employees. The Company is in the process of determination of the fair value of consideration transferred, assets acquired and liabilities assumed. As at 30 June 2020, the Company, on a provisional basis, recognised Rs. 373 million and Rs. 14,141 million towards property, plant and equipment and intangible assets, respectively. The acquisition pertains to the Company's Global Generics segment. |
3 | "Other income, net" for the quarter ended 30 June 2019 and year ended 31 March 2020 includes an amount of Rs. 3,457 million received from Celgene, pursuant to a settlement agreement entered in April 2019. The agreement effectively settles any claim the Company or its affiliates may have had for damages under section 8 of the Canadian Patented Medicines (Notice of Compliance) Regulations in regard to the Company’s ANDS for a generic version of REVLIMID brand capsules, (Lenalidomide) pending before Health Canada. |
4 | Total impairment charge for the year ended 31 March 2020 is Rs. 16,767 million, of which Rs. 11,137 million was towards impairment of gNuvaring, Rs. 4,385 million was towards ramelteon, tobramycin and imiquimod, and the balance is towards other product related intangibles forming part of Company’s Global generics and Proprietary Products segments. |
5 | Tax benefit for the year ended 31 March 2020 was primarily due to recognition of deferred tax asset of: - Rs. 4,989 million towards MAT recoverable pursuant to enactment of Taxation Laws (Amendment) Act, 2019; - Rs. 1,264 million pursuant to a planned restructuring activity between the group Companies. |
6 | "Revenues" for the year ended 31 March 2020 includes an amount of Rs. 7,486 million (U.S.$108.7 million) towards license fee for selling US and select territory rights for ZEMBRACE® SYMTOUCH® (sumatriptan injection) 3 mg and TOSYMRA® (sumatriptan nasal spray) 10 mg, (formerly referred to as “DFN-02”) to Upsher-Smith Laboratories, LLC. The costs associated with this transaction are Rs. 328 million. |
7 | The Company continues to consider the impact of COVID-19 pandemic in assessing the recoverability of receivables, goodwill, intangible assets, and certain investments. For this purpose, the Company considered internal and external sources of information up to the date of approval of these financial results. The Company based on its judgements, estimates and assumptions including sensitivity analysis expects to fully recover the carrying amount of receivables, goodwill, intangible assets, investments and other assets.The Company will continue to closely monitor any material changes to future economic conditions. |
8 | The unaudited results were reviewed by the Audit Committee of the Board and approved by the Board of Directors of the Company at their meeting held on 29 July 2020. |
9 | The figures of the quarter ended 31 March 2020 are the balancing number between audited figures in respect of the full financial year and the published unaudited year to date figures up to the third quarter of the relevant financial year, which are subject to limited review. |
10 | The results for the quarter ended 30 June 2020 were subjected to a "Limited Review". An unqualified report was issued thereon. |
By order of the Board
For Dr. Reddy's Laboratories Limited
Place: Hyderabad | G V Prasad |
Date: 29 July 2020 | Co-Chairman & Managing Director |
Exhibit 99.3
Independent Auditor’s Review Report on the Quarterly Unaudited Consolidated Financial Results of the Company Pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended
Review Report to
The Board of Directors
Dr. Reddy’s Laboratories Limited
1. | We have reviewed the accompanying Statement of Unaudited Consolidated Financial Results of Dr. Reddy’s Laboratories Limited (the “Holding Company”) and its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”) and its joint ventures for the quarter ended June 30, 2020 (the “Statement”) attached herewith, being submitted by the Holding Company pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (the “Listing Regulations”). |
2. | This Statement, which is the responsibility of the Holding Company’s Management and approved by the Holding Company’s Board of Directors, has been prepared in accordance with the recognition and measurement principles laid down in Indian Accounting Standard 34, (Ind AS 34) “Interim Financial Reporting” prescribed under Section 133 of the Companies Act, 2013 as amended, read with relevant rules issued thereunder and other accounting principles generally accepted in India. Our responsibility is to express a conclusion on the Statement based on our review. |
3. | We conducted our review of the Statement in accordance with the Standard on Review Engagements (SRE) 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Institute of Chartered Accountants of India. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the Statement is free of material misstatement. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. |
We also performed procedures in accordance with the Circular No. CIR/CFD/CMD1/44/2019 dated March 29, 2019 issued by the Securities and Exchange Board of India under Regulation 33(8) of the Listing Regulations, to the extent applicable.
4. | The Statement includes the results of the following entities: |
SL. No | Name of the Company |
Subsidiaries | |
1 | Aurigene Discovery Technologies Limited |
2 | Cheminor Investments Limited |
3 | Dr. Reddy’s Bio-Sciences Limited |
4 | Dr. Reddy’s Farmaceutica Do Brasil Ltda. |
5 | Dr. Reddy's Laboratories SA |
6 | Idea2Enterprises (India) Private Limited |
7 | Imperial Credit Private Limited |
8 | Industrias Quimicas Falcon de Mexico, S.A.de C.V. |
9 | Reddy Antilles N.V. (till 02 November, 2019) |
10 | Regkinetics Services Limited (formerly Dr. Reddy’s Pharma SEZ Limited) |
11 | Aurigene Discovery Technologies (Malaysia) SDN BHD |
12 | Aurigene Discovery Technologies Inc. |
13 | Aurigene Pharmaceutical Services Limited (from 16 September 2019) |
14 | beta Institut gemeinnützige GmbH |
15 | betapharm Arzneimittel GmbH |
16 | Chirotech Technology Limited |
17 | DRL Impex Limited |
18 | Dr. Reddy’s Laboratories (Australia) Pty. Limited |
19 | Dr. Reddy’s Laboratories Canada, Inc. |
20 | Dr. Reddy's Laboratories Chile SPA. |
21 | Dr. Reddy’s Laboratories (EU) Limited |
22 | Dr. Reddy’s Laboratories Inc. |
23 | Dr. Reddy's Laboratories Japan KK |
24 | Dr. Reddy’s Laboratories Kazakhstan LLP |
25 | Dr. Reddy’s Laboratories LLC |
26 | Dr. Reddy's Laboratories Louisiana LLC |
27 | Dr. Reddy’s Laboratories Malaysia Sdn. Bhd. |
28 | Dr. Reddy’s Laboratories New York, Inc. |
29 | Dr. Reddy's Laboratories Philippines Inc. |
30 | Dr. Reddy’s Laboratories (Proprietary) Limited |
31 | Dr. Reddy's Laboratories Romania S.R.L. |
32 | Dr. Reddy's Laboratories SAS |
33 | Dr. Reddy's Laboratories Taiwan Limited |
34 | Dr. Reddy's Laboratories (Thailand) Limited |
35 | Dr. Reddy’s Laboratories (UK) Limited |
36 | Dr. Reddy's Research and Development B.V. |
37 | Dr. Reddy’s Singapore PTE Limited (till 04 June, 2019) |
38 | Dr. Reddy’s Srl |
39 | Dr. Reddy’s New Zealand Limited |
40 | Dr. Reddy’s (WUXI) Pharmaceutical Co. Limited |
41 | Dr. Reddy's Venezuela, C.A. |
42 | Dr. Reddy's Laboratories B.V. (Formerly Eurobridge Consulting B.V. |
43 | Lacock Holdings Limited |
44 | OOO Dr. Reddy’s Laboratories Limited |
45 | OOO DRS LLC |
46 | Promius Pharma LLC |
47 | Reddy Holding GmbH |
48 | Reddy Netherlands B.V. |
49 | Reddy Pharma Iberia SA |
50 | Reddy Pharma Italia S.R.L |
51 | Reddy Pharma SAS |
Joint ventures | |
1 | DRANU LLC |
2 | DRES Energy Private Limited |
3 | Kunshan Rotam Reddy Pharmaceutical Company Limited |
Other consolidating entities | |
1 | Cheminor Employees Welfare Trust |
2 | Dr. Reddy's Employees ESOS Trust |
3 | Dr. Reddy's Research Foundation |
5. | Based on our review conducted and procedures performed as stated in paragraph 3 above nothing has come to our attention that causes us to believe that the accompanying Statement, prepared in accordance with recognition and measurement principles laid down in the aforesaid Indian Accounting Standards (‘Ind AS’) specified under Section 133 of the Companies Act, 2013, as amended, read with relevant rules issued thereunder and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of the Listing Regulations, including the manner in which it is to be disclosed, or that it contains any material misstatement. |
For S.R. BATLIBOI & ASSOCIATES LLP
Chartered Accountants
ICAI Firm registration number: 101049W/E300004
per S Balasubrahmanyam
Partner
Membership No.: 053315
UDIN: 20053315AAAACC1821
Chennai
July 29, 2020
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Dr. Reddy’s Laboratories Ltd. 8-2-337, Road No. 3, Banjara Hills, Hyderabad - 500 034, Telangana, India. CIN : L85195TG1984PLC004507
Tel :+91 40 4900 2900 Fax :+91 40 4900 2999 Email :mail@drreddys.com www.drreddys.com |
DR. REDDY'S LABORATORIES LIMITED
STATEMENT OF UNAUDITED CONSOLIDATED FINANCIAL RESULTS FOR THE QUARTER ENDED 30 JUNE 2020
All amounts in Indian Rupees millions
Quarter ended | Year ended | |||||||||||||||||
Sl. No. | Particulars | 30.06.2020 | 31.03.2020 | 30.06.2019 | 31.03.2020 | |||||||||||||
(Unaudited) | (Audited) | (Unaudited) | (Audited) | |||||||||||||||
1 | Revenue from operations | |||||||||||||||||
a) Net sales / income from operations | 43,244 | 43,361 | 37,624 | 163,574 | ||||||||||||||
b) License fees and service income | 931 | 957 | 812 | 11,026 | ||||||||||||||
c) Other operating income | 90 | 171 | 146 | 570 | ||||||||||||||
Total revenue from operations | 44,265 | 44,489 | 38,582 | 175,170 | ||||||||||||||
2 | Other income | 871 | 736 | 4,301 | 6,206 | |||||||||||||
3 | Total income (1 + 2) | 45,136 | 45,225 | 42,883 | 181,376 | |||||||||||||
4 | Expenses | |||||||||||||||||
a) Cost of materials consumed | 11,439 | 7,453 | 7,364 | 29,848 | ||||||||||||||
b) Purchase of stock-in-trade | 5,276 | 5,875 | 5,216 | 25,459 | ||||||||||||||
c) Changes in inventories of finished goods, work-in-progress and stock-in-trade | (3,519 | ) | 1,983 | (511 | ) | 237 | ||||||||||||
d) Employee benefits expense | 8,724 | 8,555 | 8,615 | 33,802 | ||||||||||||||
e) Depreciation and amortisation expense | 2,923 | 2,741 | 2,890 | 11,631 | ||||||||||||||
f) Impairment of non-current assets | - | 7 | - | 16,767 | ||||||||||||||
g) Finance costs | 233 | 230 | 298 | 983 | ||||||||||||||
h) Selling and other expenses | 11,132 | 11,124 | 10,481 | 44,353 | ||||||||||||||
Total expenses | 36,208 | 37,968 | 34,353 | 163,080 | ||||||||||||||
5 | Profit / (loss) before tax and before share of equity accounted investees(3 - 4) | 8,928 | 7,257 | 8,530 | 18,296 | |||||||||||||
6 | Share of profit of equity accounted investees, net of tax | 77 | 105 | 163 | 561 | |||||||||||||
7 | Profit before tax (5+6) | 9,005 | 7,362 | 8,693 | 18,857 | |||||||||||||
8 | Tax expense / (benefit): | |||||||||||||||||
a) Current tax | 3,166 | 417 | 2,355 | 6,616 | ||||||||||||||
b) Deferred tax | (107 | ) | (866 | ) | (427 | ) | (8,019 | ) | ||||||||||
9 | Net profit after taxes and share of profit of associates (7 - 8) | 5,946 | 7,811 | 6,765 | 20,260 | |||||||||||||
10 | Other comprehensive income | |||||||||||||||||
a) (i) Items that will not be reclassified subsequently to profit or loss | 207 | (326 | ) | (47 | ) | (412 | ) | |||||||||||
(ii) Income tax relating to items that will not be reclassified to profit or loss | - | (22 | ) | - | (22 | ) | ||||||||||||
- | - | |||||||||||||||||
b) (i) Items that will be reclassified subsequently to profit or loss | 731 | (1,011 | ) | (269 | ) | (448 | ) | |||||||||||
(ii) Income tax relating to items that will be reclassified to profit or loss | (156 | ) | 96 | 23 | 232 | |||||||||||||
Total other comprehensive income | 782 | (1,263 | ) | (293 | ) | (650 | ) | |||||||||||
11 | Total comprehensive income (9 + 10) | 6,728 | 6,548 | 6,472 | 19,610 | |||||||||||||
12 | Paid-up equity share capital (face value Rs. 5/- each) | 831 | 831 | 831 | 831 | |||||||||||||
13 | Other equity | 155,157 | ||||||||||||||||
14 | Earnings per equity share (face value Rs. 5/- each) | |||||||||||||||||
Basic | 35.87 | 47.12 | 40.81 | 122.22 | ||||||||||||||
Diluted | 35.78 | 47.03 | 40.74 | 121.99 | ||||||||||||||
(Not annualised) | (Not annualised) | (Not annualised) |
See accompanying notes to the financial results
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DR. REDDY'S LABORATORIES LIMITED
Segment Information | All amounts in Indian Rupees millions |
Quarter ended | Year ended | |||||||||||||||||
Sl. No. | Particulars | 30.06.2020 | 31.03.2020 | 30.06.2019 | 31.03.2020 | |||||||||||||
(Unaudited) | (Audited) | (Unaudited) | (Audited) | |||||||||||||||
Segment wise revenue and results: | ||||||||||||||||||
1 | Segment revenue : | |||||||||||||||||
a) Pharmaceutical Services and Active Ingredients | 10,165 | 8,782 | 6,052 | 32,086 | ||||||||||||||
b) Global Generics | 35,092 | 36,460 | 33,010 | 138,264 | ||||||||||||||
c) Proprietary Products | 56 | 2 | 281 | 7,949 | ||||||||||||||
d) Others | 489 | 723 | 633 | 2,781 | ||||||||||||||
Total | 45,802 | 45,967 | 39,976 | 181,080 | ||||||||||||||
Less: Inter-segment revenue | 1,537 | 1,478 | 1,394 | 5,910 | ||||||||||||||
Total revenue from operations | 44,265 | 44,489 | 38,582 | 175,170 | ||||||||||||||
2 | Segment results: | |||||||||||||||||
Gross profit from each segment | ||||||||||||||||||
a) Pharmaceutical Services and Active Ingredients | 2,859 | 2,050 | 332 | 6,219 | ||||||||||||||
b) Global Generics | 21,526 | 20,332 | 19,007 | 78,449 | ||||||||||||||
c) Proprietary Products | 56 | (7 | ) | 207 | 7,744 | |||||||||||||
d) Others | 317 | 442 | 320 | 1,626 | ||||||||||||||
Total | 24,758 | 22,817 | 19,866 | 94,038 | ||||||||||||||
Less: Selling and other un-allocable expenditure / (income), net | 15,753 | 15,455 | 11,173 | 75,181 | ||||||||||||||
Total profit before tax | 9,005 | 7,362 | 8,693 | 18,857 |
Global Generics includes operations of Biologics business. Inter-segment revenue represents sale from Pharmaceutical Services and Active Ingredients to Global Generics at cost.
Segmental Capital employed
As certain assets of the Company including manufacturing facilities, development facilities and treasury assets and liabilities are often deployed interchangeably across segments, it is impractical to allocate these assets and liabilities to each segment. Hence, the details for capital employed have not been disclosed in the above table.
Notes:
1 | These results have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules 2015 as amended. |
2 | On 10 June 2020, the Company completed the acquisition of select divisions of Wockhardt Limited’s branded generics business in India and the territories of Nepal, Sri Lanka, Bhutan and Maldives. The business comprises a portfolio of 62 brands in multiple therapy areas, such as respiratory, neurology, venous malformations, dermatology, gastroenterology, pain, and vaccines. This entire portfolio has been transferred to the Company, along with related sales and marketing teams, the manufacturing plant located in Baddi, Himachal Pradesh, and employees. The Company is in the process of determination of the fair value of consideration transferred, assets acquired and liabilities assumed. As at 30 June 2020, the Company, on a provisional basis, recognised Rs. 373 million and Rs. 14,141 million towards property, plant and equipment and intangible assets, respectively. The acquisition pertains to the Company's Global Generics segment. |
3 | "Other income" for the quarter ended 30 June 2019 and year ended 31 March 2020 includes an amount of Rs. 3,457 million received from Celgene, pursuant to a settlement agreement entered in April 2019. The agreement effectively settles any claim the Company or its affiliates may have had for damages under section 8 of the Canadian Patented Medicines (Notice of Compliance) Regulations in regard to the Company’s ANDS for a generic version of REVLIMID brand capsules, (Lenalidomide) pending before Health Canada. |
4 | Total impairment charge for the year ended 31 March 2020 is Rs. 16,767 million, of which Rs. 11,137 million was towards impairment of gNuvaring, Rs. 4,385 million was towards ramelteon, tobramycin and imiquimod, and the balance is towards other product related intangibles forming part of Company’s Global generics and Proprietary Products segments. |
5 | Tax benefit for the year ended 31 March 2020 was primarily due to recognition of deferred tax asset of: |
- Rs. 4,989 million towards MAT recoverable pursuant to enactment of Taxation Laws (Amendment) Act, 2019;
- Rs. 1,264 million pursuant to a planned restructuring activity between the group Companies.
6 | "Revenue from operations" for the year ended 31 March 2020 includes an amount of Rs. 7,486 million (U.S.$108.7 million) towards license fee for selling US and select territory rights for ZEMBRACE® SYMTOUCH® (sumatriptan injection) 3 mg and TOSYMRA® (sumatriptan nasal spray) 10 mg, (formerly referred to as “DFN-02”) to Upsher-Smith Laboratories, LLC. The costs associated with this transaction are Rs. 328 million. |
7 | The Company continues to consider the impact of COVID-19 pandemic in assessing the recoverability of receivables, goodwill, intangible assets, and certain investments. For this purpose, the Company considered internal and external sources of information up to the date of approval of these financial results. The Company based on its judgements, estimates and assumptions including sensitivity analysis expects to fully recover the carrying amount of receivables, goodwill, intangible assets, investments and other assets.The Company will continue to closely monitor any material changes to future economic conditions. |
8 | The unaudited results were reviewed by the Audit Committee of the Board and approved by the Board of Directors of the Company at their meeting held on 29 July 2020. |
9 | The figures of the quarter ended 31 March 2020 are the balancing number between audited figures in respect of the full financial year and the published unaudited year to date figures up to the third quarter of the relevant financial year, which are subject to limited review. |
10 | The results for the quarter ended 30 June 2020 were subject to a "Limited Review" by the Statutory Auditors of the Company. An unqualified report has been issued by them thereon. |
By order of the Board
For Dr. Reddy's Laboratories Limited
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![]() |
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Place: Hyderabad | G V Prasad |
Date: 29 July 2020 | Co-Chairman & Managing Director |
Exhibit 99.4
Independent Auditor’s Review Report on the Quarterly Unaudited Standalone Financial Results of the Company Pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended
Review Report to
The Board of Directors
Dr. Reddy’s Laboratories Limited
1. | We have reviewed the accompanying statement of unaudited standalone financial results of Dr. Reddy’s Laboratories Limited (the “Company”) for the quarter ended June 30, 2020 (the “Statement”) attached herewith, being submitted by the Company pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (the “Listing Regulations”). |
2. | This Statement, which is the responsibility of the Company’s Management and approved by the Company’s Board of Directors, has been prepared in accordance with the recognition and measurement principles laid down in Indian Accounting Standard 34, (Ind AS 34) “Interim Financial Reporting” prescribed under Section 133 of the Companies Act, 2013 as amended, read with relevant rules issued thereunder and other accounting principles generally accepted in India. Our responsibility is to express a conclusion on the Statement based on our review. |
3. | We conducted our review of the Statement in accordance with the Standard on Review Engagements (SRE) 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Institute of Chartered Accountants of India. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the Statement is free of material misstatement. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. |
4. | Based on our review conducted as above, nothing has come to our attention that causes us to believe that the accompanying Statement, prepared in accordance with the recognition and measurement principles laid down in the aforesaid Indian Accounting Standards (‘Ind AS’) specified under Section 133 of the Companies Act, 2013 as amended, read with relevant rules issued thereunder and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of the Listing Regulations, including the manner in which it is to be disclosed, or that it contains any material misstatement. |
For S.R. BATLIBOI & ASSOCIATES LLP
Chartered Accountants
ICAI Firm registration number: 101049W/E300004
per Balasubrahmanyam
Partner
Membership No.: 053315
UDIN: 20053315AAAACB8197
Place: Chennai
Date: July 29, 2020
![]() |
Dr. Reddy’s Laboratories Ltd. 8-2-337, Road No. 3, Banjara Hills, Hyderabad - 500 034, Telangana, India. CIN : L85195TG1984PLC004507
Tel :+91 40 4900 2900 Fax :+91 40 4900 2999 Email :mail@drreddys.com www.drreddys.com |
DR. REDDY'S LABORATORIES LIMITED
STATEMENT OF UNAUDITED STANDALONE FINANCIAL RESULTS FOR THE QUARTER ENDED 30 JUNE 2020
All amounts in Indian Rupees millions
Quarter ended | Year ended | |||||||||||||||||
Sl. No. | Particulars | 30.06.2020 | 31.03.2020 | 30.06.2019 | 31.03.2020 | |||||||||||||
(Unaudited) | (Audited) | (Unaudited) | (Audited) | |||||||||||||||
1 | Revenue from operations | |||||||||||||||||
a) Net sales / income from operations | 32,264 | 28,195 | 24,827 | 109,925 | ||||||||||||||
b) License fees and service income | 104 | 184 | 149 | 8,105 | ||||||||||||||
c) Other operating income | 76 | 138 | 111 | 474 | ||||||||||||||
Total revenue from operations | 32,444 | 28,517 | 25,087 | 118,504 | ||||||||||||||
2 | Other income | 6,447 | 1,274 | 4,714 | 7,432 | |||||||||||||
Total income (1 + 2) | 38,891 | 29,791 | 29,801 | 125,936 | ||||||||||||||
3 | Expenses | |||||||||||||||||
a) Cost of materials consumed | 7,882 | 6,543 | 5,839 | 25,565 | ||||||||||||||
b) Purchase of stock-in-trade | 3,003 | 2,261 | 2,479 | 11,172 | ||||||||||||||
c) Changes in inventories of finished goods, work-in-progress and stock-in-trade | (1,929 | ) | 672 | (675 | ) | (999 | ) | |||||||||||
d) Employee benefits expense | 5,450 | 5,166 | 4,996 | 20,302 | ||||||||||||||
e) Depreciation and amortisation expense | 1,977 | 1,923 | 1,970 | 7,892 | ||||||||||||||
f) Finance costs | 140 | 118 | 121 | 478 | ||||||||||||||
g) Selling and other expenses | 8,751 | 8,667 | 8,141 | 33,768 | ||||||||||||||
Total expenses | 25,274 | 25,350 | 22,871 | 98,178 | ||||||||||||||
4 | Profit before tax (1 + 2 - 3) | 13,617 | 4,441 | 6,930 | 27,758 | |||||||||||||
5 | Tax expense / (benefit) | |||||||||||||||||
a) Current tax | 2,391 | 690 | 1,528 | 4,839 | ||||||||||||||
b) Deferred tax | 1,724 | (1,277 | ) | (79 | ) | (6,458 | ) | |||||||||||
6 | Net profit for the period / year (4 - 5) | 9,502 | 5,028 | 5,481 | 29,377 | |||||||||||||
7 | Other comprehensive income | |||||||||||||||||
a) (i) Items that will not be reclassified to profit or loss | (1 | ) | 85 | 4 | 88 | |||||||||||||
(ii) Income tax relating to items that will not be reclassified to profit or loss | - | (33 | ) | - | (33 | ) | ||||||||||||
b) (i) Items that will be reclassified to profit or loss | 360 | (464 | ) | (64 | ) | (750 | ) | |||||||||||
(ii) Income tax relating to items that will be reclassified to profit or loss | (128 | ) | 161 | 20 | 259 | |||||||||||||
Total other comprehensive income | 231 | (251 | ) | (40 | ) | (436 | ) | |||||||||||
8 | Total comprehensive income (6 + 7) | 9,733 | 4,777 | 5,441 | 28,941 | |||||||||||||
9 | Paid-up equity share capital (face value Rs. 5/- each) | 831 | 831 | 831 | 831 | |||||||||||||
10 | Other equity | 151,088 | ||||||||||||||||
11 | Earnings per equity share (face value Rs. 5/- each) | |||||||||||||||||
Basic | 57.31 | 30.34 | 33.06 | 177.23 | ||||||||||||||
Diluted | 57.18 | 30.28 | 33.01 | 176.88 | ||||||||||||||
(Not annualised) | (Not annualised) | (Not annualised) |
See accompanying notes to the financial results.
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DR. REDDY'S LABORATORIES LIMITED
Segment information | All amounts in Indian Rupees millions |
Quarter ended | Year ended | |||||||||||||||||
Sl. No. | Particulars | 30.06.2020 | 31.03.2020 | 30.06.2019 | 31.03.2020 | |||||||||||||
(Unaudited) | (Audited) | (Unaudited) | (Audited) | |||||||||||||||
Segment wise revenue and results | ||||||||||||||||||
1 | Segment revenue | |||||||||||||||||
a) Pharmaceutical Services and Active Ingredients | 8,706 | 7,373 | 5,617 | 26,996 | ||||||||||||||
b) Global Generics | 25,241 | 22,606 | 20,828 | 89,774 | ||||||||||||||
c) Proprietary Products | 34 | 16 | 36 | 7,644 | ||||||||||||||
Total | 33,981 | 29,995 | 26,481 | 124,414 | ||||||||||||||
Less: Inter-segment revenue | 1,537 | 1,478 | 1,394 | 5,910 | ||||||||||||||
Total revenue from operations | 32,444 | 28,517 | 25,087 | 118,504 | ||||||||||||||
2 | Segment results | |||||||||||||||||
Profit / (loss) before tax and interest from each segment | ||||||||||||||||||
a) Pharmaceutical Services and Active Ingredients | 5,686 | 438 | (424 | ) | 1,465 | |||||||||||||
b) Global Generics | 8,242 | 4,203 | 7,810 | 22,116 | ||||||||||||||
c) Proprietary Products | (174 | ) | (97 | ) | (277 | ) | 6,525 | |||||||||||
Total | 13,754 | 4,544 | 7,109 | 30,106 | ||||||||||||||
Less: (i) Finance costs | 140 | 118 | 121 | 478 | ||||||||||||||
(ii) Other un-allocable expenditure / (income), net | (3 | ) | (15 | ) | 58 | 1,870 | ||||||||||||
Total profit before tax | 13,617 | 4,441 | 6,930 | 27,758 |
Global Generics includes operations of Biologics business. Inter-segment revenue represents sale from Pharmaceutical Services and Active Ingredients to Global Generics at cost.
Segmental capital employed
As certain assets of the Company including manufacturing facilities, development facilities and treasury assets and liabilities are often deployed interchangeably across segments, it is impractical to allocate these assets and liabilities to each segment. Hence, the details for capital employed have not been disclosed in the above table.
Notes:
1 | These results have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules 2015 as amended. |
2 | "Other income" for the quarter ended 30 June 2020 includes |
- Rs. 4,772 million received from Aurigene Pharmaceutical Services limited (APSL) during the quarter ended 30 June 2020, pursuant to sale of the contract development and manufacturing organisation (CDMO) division of the Custom Pharmaceutical Services (CPS) business of the Company.
- Rs. 516 million received of preference dividend declared by Dr. Reddy's Laboratories S.A. during the quarter.
3 | On 10 June 2020, the Company completed the acquisition of select divisions of Wockhardt Limited’s branded generics business in India and the territories of Nepal, Sri Lanka, Bhutan and Maldives. The business comprises a portfolio of 62 brands in multiple therapy areas, such as respiratory, neurology, venous malformations, dermatology, gastroenterology, pain, and vaccines. This entire portfolio has been transferred to the Company, along with related sales and marketing teams, the manufacturing plant located in Baddi, Himachal Pradesh, and employees. The Company is in the process of determination of the fair value of consideration transferred, assets acquired and liabilities assumed. As at 30 June 2020, the Company, on a provisional basis, recognised Rs. 373 million and Rs. 14,141 million towards property, plant and equipment and intangible assets, respectively. The acquisition pertains to the Company's Global Generics segment. |
4 | "Other income" for the quarter ended 30 June 2019 includes dividend income of Rs. 392 million declared by Kunshan Rotam Reddy Pharmaceutical Company Limited during the quarter. |
5 | "Other income" for the quarter ended 30 June 2019 and year ended 31 March 2020 includes an amount of Rs. 3,457 million received from Celgene, pursuant to a settlement agreement entered in April 2019. The agreement effectively settles any claim the Company or its affiliates may have had for damages under section 8 of the Canadian Patented Medicines (Notice of Compliance) Regulations in regard to the Company’s ANDS for a generic version of REVLIMID brand capsules, (Lenalidomide) pending before Health Canada. |
6 | Tax benefit for the year ended 31 March 2020 was primarily due to recognition of deferred tax asset of: |
- Rs. 4,989 million towards MAT recoverable pursuant to enactment of Taxation Laws (Amendment) Act, 2019;
- Rs. 1,264 million pursuant to a planned restructuring activity between the group Companies
7 | "Revenue from operations" for the year ended 31 March 2020 includes an amount of Rs. 7,486 million (U.S.$108.7 million) towards license fee for selling US and select territory rights for ZEMBRACE® SYMTOUCH® (sumatriptan injection) 3 mg and TOSYMRA® (sumatriptan nasal spray) 10 mg, (formerly referred to as “DFN-02”) to Upsher-Smith Laboratories, LLC. The costs associated with this transaction are Rs. 328 million. |
8 | The Company continues to consider the uncertainty relating to the COVID-19 pandemic in assessing the recoverability of receivables, goodwill, intangible assets, and certain investments. For this purpose, the Company considered internal and external sources of information up to the date of approval of these financial results. The Company based on its judgements, estimates and assumptions including sensitivity analysis expects to fully recover the carrying amount of receivables, goodwill, intangible assets, investments and other assets. The Company will continue to closely monitor any material changes to future economic conditions. |
9 | The unaudited results were reviewed by the Audit Committee of the Board and approved by the Board of Directors of the Company at their meeting held on 29 July 2020. |
10 | The figures of the quarter ended 31 March 2020 are the balancing number between audited figures in respect of the full financial year and the published unaudited year to date figures up to the third quarter of the relevant financial year, which are subject to limited review. |
11 | The results for the quarter ended 30 June 2020 presented were subjected to a “Limited review” by the Statutory Auditors of the Company. An unqualified report was issued by them thereon. |
By order of the Board
For Dr. Reddy's Laboratories Limited
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Place: Hyderabad | G V Prasad |
Date: 29 July 2020 | Co-Chairman & Managing Director |
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