RDY - Earnings call transcript Q1 2023 | Dr. Reddy's Laboratories Limited

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, good day and welcome to the Dr. Reddy's Q1 FY 2023 Earnings Conference Call.

As a reminder, all participant lines will be in listen-only mode. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Agarwal. Amit over and you, to you sir. Thank

Amit Agarwal

based website. playback our of Parag our and without released that Relations this ended morning have attributed written and analysis and thank discussions be call the copyrighted good company's Dr. CFO; we cannot Agarwal, earnings comprising available the and the Mr. financial will on the our Earlier today business Reddy's, transcripts soon. a good the is Reddy's you of outlook, is Reddy's outlet Dr. be quarter for statements. call all to note the conference To XX, All being or you we consent. performance Erez and be of day, and the of on XXXX. also rebroadcasted call discuss posted media same Israeli, during evening the Please Mr. consolidated shall material or for team. CEO; today's Very June for us Dr. have call are team recorded in website the leadership expressed and on the results IFRS This press and and the made our joining Investor our

call. would proceed with in conference the pertains to Before contained I that call, like safe also everyone this to harbor I the remind today's release press

hand to Over call Mr. you, the Now, sir. over Agarwal. I’ll Parag to

Parag Agarwal

you I everyone. take to through the financial greetings and will Amit you, performance our Thank of quarter.

impacted has in-line this quarter. profit Consolidated businesses, XX% sales for a quarter this the has at well respectively divestment June new Russia, with been profit the are It In quarter, were the the products strong competition income a slowdown supported and in of [US$XXX translation and INDXX.XX. crores and is normalization inflationary in convenient we the have by additional Russia, of a market from our the by we INDX,XXX reasonably grew XXXX. is quarter had challenges stood our key performance the were for higher while business due on. XG Generics declined XX.X%, sequentially. effect and in all and for few in done [indiscernible], at segment basis normalized in X% FY in previous and a and PSAI amounts the of been been offset at further on price here current driven India. rate is quarter. current margin to business the XXX QX impact across included years which last brand basis This gross and the base quarters. basis for Global at had QX from the the and of decline Gross sequential income XX.X% margin FY as Sales growth the COVID in products improving as revenue section, translated [ph] brand quarter by our up, impacted by in basis. higher The by launches was pharma sales into caused we XXXX in and XXX year-on-year U.S., partially this and has [ph] X% in dollar while are million] erosion pressure, the [stockholders] U.S. over growth For trend XXXX stocking rate Consolidated of points growth XX. that divestment confident quarter product with points

it was to quarter the we divestment which supported impacted by income, for was range. one-offs, several current are the normal margin gross brand While within due adjusted

detail. a bit in these more explain me Let

going Firstly, impacted believe our movement due significant to we gross were normalize forward. quarter, product in the rate the which margins during to

commodity impacted sales leverage to pace. due to increasing lower also Secondly, prices the adverse the gross overhead and on due are margins manufacturing

increase this in next from normalize to an with quarter sales. expect We our

segment expiry is to band patents after [indiscernible] We Thirdly, the currently has the manufacturing in which in lower externally transition and procured India, in-house plan which have a of an this three margin. we launched would in gross quarter, to margin. improvement lead

be of that measures increase next the two and is decrease and With The that burn-off modernization planned we a undertaken, of the an will our for year-on-year believe of launch US$XXX will within products, and the to meaningful of quarter X% margins crores, spend gross is be SG&A X% INDX,XXX normal the million, range. quarter-on-quarter. above improve onwards, quarter

is for [X.X%] has XX [ph] crores SG&A the been by by INDXXX however, As of sales. of The that points million] R&D a points is percentage is which [US$XX and [ph] quarter expense basis XX lower at sales, higher our XX.X%, basis year-on-year, at sequentially. is

during pipeline to is US$XX and million the continue supported strengthen drive also making businesses. crores to including digitalization, The in finance development the INDXXX and income investments while marketing, productivity for of gain quarter We strengthening that [indiscernible] across people, net account Horizon quarter. capability is of businesses, on X our by

range. is one-off XX.X%. margins, of the are which quarter related income, been to for to While bank income, million] gross [US$XXX forex Adjusted finance impacting and that INDX,XXX and The SG&A. is settlement has due for forex the we divestments, have related EBITDA offset in the and we and gross [ph] crores EBITDA is impact benefit within our our cost partially margin growth margin normal

million] on quarter-on-quarter. [indiscernible]. year-on-year [ph], tax of assets XX% XX.X%, before is previously primarily of losses account [US$XXX crores, tax recognition a tax for growth unrecognized been at a tax which has Our Effective to quarter profit and operating the growth of is stood on before of our that at INDX,XXX XXX% pertaining

INDXX.XX. US$XXX range [ph] to ETR crores tax that in increased America, the capital We driven business] by during crores, the primarily [fee increase by an should March North normalize EPS The was INDX,XXX increase XX, on after is XX%. is at which INDXXX the the stood million is working quarter. in Reported in which [indiscernible] next XXXX. to million. the Operating for US$XXX quarter expect normal quarter for our of Profit be XX%

which at India of crores and INDXXX quarter capital acquisition quarter Pharma this crores free Our as INDXXX XXXX. cash INDXXX crores, million. crores, US$XX million The the after Consequently, US$XX during is outflow flow a a net which the investment of during we XX, US$XXX payment of in the was is U.S. now Cidmus portfolio from of that have INDX,XXX June of in is for surplus Eton million net cash indicative brand stood

U.S. range [ph] million] X.X to South cash African [RUBXXXX the Australian key the hedges to South of of maturing rate [ph] hedged highlights. the rate INDX.XX to I in flow INDXX.X [ph] currency million] Foreign months. largely INDXX.X INDX.XXXX the the of derivatives for dollar, form at million] rate [Australian US$XXX the around are to and million, you in Erez dollar of dollar the approximately business this, the the of INDXX.X ruble request at the to to at through next rand now take XX rand the African [XX With dollar

Erez Israeli

morning Thank evening everyone. to you, and Good Parag. good

the diversified of strength of Our reflects performance quarter business current the model. our

We to able been [indiscernible] have level. by during overall higher as to quarter various mitigate business that faced challenges led the an monetizing opportunities several

from facility will FTO inspection stream further business. which grow enable world additional of site. quarter. Let GPO us bring as from with [ph] me of in and Suboxone approval [indiscernible] to share injectable in for sheet. United highlights manufacturing be Completion U.S. [indiscernible] leading sterile FDA settlement our capability second to product the acquisition of million, current of brand the the of $XX key of XX balance litigation for you plant The this subsequent of This China, strengthening on Pharma referred in and new our our injectable India helps which One, injectable capacities the some [impending] to the Three, and tools product of of portfolio commission cardiovascular Eton States. model. our the

molecule by laid Investor There product have to business sustainability similar and progressing across good pipeline during out X well recently We been in Day. [indiscernible]. efficient the our generics and Horizon growth initiative more are on momentum concluded pertaining product

All of us to this continue growth deliver our to on aspirations. enable long-term will

note numbers take current quarter. for are to me all business actions in these highlights respective references the let Now, the through that currencies. local you Please key in the

the has with sequential ramped XXX due for the our a volumes sales this of quarter. products, pricing of buy] the normalized driven to to coming last X competition these the for injectable over base which the few trends within was The Bearing be [Day products in on [ph] In to business normal decline been launched the to the Q-on-Q the launch up adjustments and recorded some [first seven which new the generics a [indiscernible] [ph]. should we entry quarters. of attributed incremental America quarter, quarter, in year-over-year quarters. business in price erosion of key impending in seen This products, largely QX] also North X% of on [indiscernible] for basis. competition Our decline and couple XX by million base has was high

years, We we due model. expect fundamental business to three to strength the continue during to of strong we quarter-to-quarter basis launches, last the momentum volatility a launch product while believe business of the the Similar there on this that can grow be will new on year. nature generic continue to

of quantities specific generic We XXXX, amount preparing limited the September to are we and sell launch unlimited limited XX, XXXX. are when volume volume sell United for ANDA licensed a [indiscernible] during [indiscernible] confidential. [indiscernible] are between we of The that in September to XXXX States permitted are product January in of

of growth million sales of XX%. recorded business a year-on-year with this Europe Our €XX quarter

quarter of X%. decline sequential However

the across countries quarter, various nine products During Europe. within we launched

rest We expect gross momentum to in FY continue XXXX. of to pay the

COVID QX business the QX to the increase XXXX. INDXXX had fundings due crores due X% during divestment the seen of sequential has quarter FY markets emerging and normalized. of stock now FY decline to decline base recorded effect last income of Russia then sales in year-on-year decline product Our XXX as in sales quarter with conflict we The was Further, XX%. in higher in [indiscernible] a and

quarter the growth however, impacted However, growth. – current impacted the quarter

Within the currency, Sales basis and quarter-to-quarter constant XX% on Difficulty] [Technical [ph] a due on Emerging an the [year-on-year] segment, to reasons. same in basis Markets

the to the that divestment We the on various one-offs past we quarter, the with income we in emerging the launched and of profit believe sales grow business this able of will annual adjusted products basis, During year. in-line new markets. across for trends, XX countries previous be

Our sales India of the current growth of XX%. COVID of and a sequential as during XXXX a QX divestment the the in with we product business brand and growth crores have for double-digit. quarter sales XX% healthy FY recorded grown income in year-over-year Adjusted INDX,XXX

Indian quarter, we in five launched products the market. During new the

ranking QX ranking our value Number report XXXX, of at our terms the per As – value terms is June XX.

growing We focused divesting continue focus non-core while therapy brands, of and big areas in portfolio our brands. acquisition, the India business to with partnerships reshape for

year. last with of sales for the Adjusted FY sales X%. recorded business has of decline grown sequential over decline a PCI the XXXX, COVID and $XX million QX XX% year-over-year Our product of in business

productivity We improvement we see to expect towards balance our our We well are several and a that strategy long-term committed would I new improvement growth in-line progressing for long-term like Day. and Investor [leading and investment answers. believe the open floor are during the making for unveiled in year. cost] are this, there deliver business to choices right opportunities questions on to avenue the sales the and sustainable with With growing of our [ph], strategy to core of

Operator

Thank question much. from First from is go Instructions] ahead. line you Saion Nomura. Please the of very [Operator Mukherjee

Saion Mukherjee

net There can income, just COGS, certain impact? you you are you so is but of if impact can items? there forex line the in thanks. Parag, finance mentioned an in quantify income also impact just across Yes, quantify the

Parag Agarwal

Yes.

some margin, the So, which that on Saion, the upside range. roughly recorded accounting has the of in other of that's [indiscernible]. finance points XXX ruble the is around there to hasn't and led basis of be And – impact the that the and would gross in because income, adverse that's standards movement an in currencies

overall, that of has. that's P&L So, our kind the impact

Saion Mukherjee

Okay.

growth, just fourth The particularly, are to for amount you year, hedges you can hedge will large, what – end quarter, currency? so – rate? terms is just realization just in can the that of going And also, And are you that And the in indicate have the take you currency currency should in I had How the is second of at Russia. that model one the forward? guide constant of with for moment. the at for hedges on more any on are you anything kind Russia you we missed running or Russia this able Russia, since you if the

Parag Agarwal

So, answer. Saion, me yes, let

impact. The on currency first is question the sales constant

at our as the quarter, inventory in XX% normalization the the during we And saw year-on-year So, quarter, of conflict. start this declined of signaled by Russian currency. had the in stocking includes we business last of constant that the the

hedging. forex on point second the to coming Now,

ruble in [X.XXX you currently, it As may hedging X.X between believe extremely rupee] has [ph] be cost it [relatively anywhere around is now sustainable X.XX. be run. to know, We long at high] significantly rate to the know used appreciated ranging and is to a rate of from, [ph]. you not the this high, And of

trying So, reduce to we we What some are we have to cycle, working and that. our currently do capital as are business not is hedging. in a success had

hedging the business. to conversion minimize exposure, our the on cash cycle So, instead of our are we impact reducing

Erez Israeli

Saion, the, you In normalization Russia. we for will inventory, just to go take of me, continue if this in

Saion Mukherjee

Okay.

ask? growth So adjusted the but one for had number? India, On if just share mentioned you can can COVID, adjust healthy for question, double-digit more if you I you the acquisition, you growth,

Parag Agarwal

Both.

and out Then double-digit. have of take So, also brand which both COVID healthy at the impact base. the the take we if grown out Saion, we you in is divestments

look growth then single-digit. would you you in impact at of that the our acquisitions, if If be out, take

Saion Mukherjee

Okay. you. queue. back join Thank the I’ll

Operator

from from Anubhav The next line you. Thank question Suisse. go Credit the Please ahead. is of Aggarwal

Anubhav Aggarwal

Question when this on the shelf-stock vessel is in the price adjustment also sales] erosion, in products, element quarter about talked U.S. [U.S. about so of any [ph]? on couple market, there of you is talk you pricing just

Parag Agarwal

Again, can repeat? you

Anubhav Aggarwal

next are call called which it [vessels] understand, impact when trying or So shelf-stock down quarter-on-quarter. Suboxone you you to depressing quarter, is say, And of [ph], just we there? out, on U.S. the $XX That's started want on adjustment price but I out, [indiscernible] the we base. let's what just billion, volume a sales element number, is when One to for so XX% is start clarify. erosion example, higher billion, Like that number. reported $X artificially a which

Erez Israeli

see basically, related adjustment that like normal and [Day impacted in us what So, [ph] X] I we is quarter. my part, this in that's mentioned the situation to

Parag Agarwal

the on such was impact SSA Anubhav. Yes. major And there no adjustment,

Anubhav Aggarwal

mean? that When you does say SSA what

Parag Agarwal

Shelf-Stock Adjustment [indiscernible].

Anubhav Aggarwal

saying record with the surprised not we [indiscernible] price happen that are you March quarter to erosion. So, were we higher and

limit. no is there So,

$XXX reporting, say for for let's an net-net becomes So, base us. opening million that quarter that the second we're

Erez Israeli

do We see we not described. the any are not guiding, but surprises say, that you let's way

Parag Agarwal

I Yes, in-line in That's price would is aggregate the quarter, seen this seen trends seeing to the the point that and erosion we we quarters the point make important Anubhav last in the we have with in think is I worsening. like that any that are is not few that have sign it.

Anubhav Aggarwal

Okay.

market. Russian the in is Second

well. any – market usual? is share seen good Now, some element Can you visible signs Has some happening of market? been we've of amount qualitative some us of happening as gains, there in the July that or Russian what's as it give business

Parag Agarwal

expense which market, seeing, of supply flow within is is also – TV discounting the certain India so operations the line, that normally. Russia Russian shifted line, and our In The are Russia Anubhav, are and media companies There into normal, mass have we above are on. is from their from trade money the below to normal. which

which market. usual. But we happening made, way are some as expense in are are is finding that overall, it are the business in there So, shifts the

so I'm in medicine, As on medicines. patients making area focused operations know, the to our say are And we you happy that normal. that right are very our get sure now, of

Anubhav Aggarwal

to just on this. add – just clarity Sorry, a

So, what easier I euro conversion USD. let's example, ruble was, for to is with to than, meant say, or INR, ruble much

share take market? of that in signs have the companies is seen in And any you visible general the Indian higher guys benefiting who So, a you or Russian that?

Erez Israeli

impact are but that the in now long-term of right in do such. Likely it operating for quarters, see knowledge reported not see. and the we Russia. did in that's visibility actually We in Russia. live All in visibility not pharmaceuticals at change, our are to anyone So, that terms moment we company will the have working what Russia, the our best of as

think to it’s In understand and terms Russia. that for decision to of continue Russia, And our we favorable, in it's indeed, to go. the people best this it probably business as in is comfortable speak, the took we work a us give we work the will right future. what usually it see transparency way of But help in the I to us is on

Anubhav Aggarwal

guys. you, Thank Okay.

Operator

the question Damayanti from of next from line The is go Kerai HSBC. you. Please ahead. Thank

Damayanti Kerai

U.S. My Hi. is for on Thank the business. you opportunity. question

injectable So, of sizable have a products you portfolio U.S. the in

erosion part? comment this also, on And erosion in in the the pricing the what pricing pricing generic your you we solids? stand of oral of my the launches, which in are which in portfolio, can that's against future, the like So, part of how mainly some portfolio So anticipating terms question. of border complex the first consist expectation are

Erez Israeli

Thank you.

it is – upcoming of And So the of customers the injectable the is an pattern Difficulty]. terms [indiscernible] also of so of fulfillment business the also number similar, happening in [Technical [indiscernible] same. is there a it's the handful on the

a more and More where I as see, second captured walk difference the of more [ph]. which of naturally with will in injectables with of don't of as wholesalers. this where to we that’s related question. market to course, I'm injectable think, and it's flexibility case, coming we allowing our people and you part the share is can many well in sure I [indiscernible] only, growth. this the the is say, part will walk you different terms is not go. So, the let's directly as more this in [way] The see And people, as those

If you can repeat, please?

Damayanti Kerai

Yes.

over and working on various [complex many generic] are years. few So, these of product, products those we [ph] might come are next injectables

come to have? of you portfolio, erosion I was see terms we asking pricing once current terms in products how which So, these in compared they the stand of in do pricing, market,

Erez Israeli

during that some So, are we may future of the And launch the them these some Investor Day. products will limited see products indicated were in our that the of competition.

[indiscernible] of behavior there phenomenon similar the said disclose. like our in respect. that see product, we and will not I well. if there be in did price the pattern the In or general, as before, are retail the also of of hospital will significant that think versus are in difference pipeline injectables I erosion for procurement the a Some don't we the

Damayanti Kerai

observing you last been of we saw change, what can comment there? to And Like in there is, any the which prices previous logistic you are quarter? moderation in question any or trends compared the Sure. Has etcetera? sign my commodity on costs, the

Erez Israeli

as commodity price goes inventory normally also some takes with other it that accordingly in the of No weeks, normally of this worsening. sell We of only impacting, see then especially signs in, we time as is and course, attachment, of time for capture well while moderation, down no months, we certain there to course commodity the and And our price cost. on the but of some still oil Naturally sign of a see those the as shipping two impact product. period The real started results. we can impact some

see So, happen six this case will also. in likely only from any that will market, our that now change we the to months

Damayanti Kerai

I your you get Sure. in Thank for answers. back queue. will the

Operator

The you. ahead. go from next Agarwal Please Capital. question from Prakash Thank Axis the of is line

Prakash Agarwal

Yes. margins. evening] Thanks. opportunity. on for is and gross the thanks [Good [ph] Question

Mr. on last Rupee if a know movement. ruble, came ruble, base the correct on a bps about quarter XXX dollar Parag that said had I know you also [vessels]. So, was me, largely the that high And also there you but due wrong, substantial I'm to

So will a come also down that bit.

decline the also in to which So, led these certain margins? are gross factors not

Parag Agarwal

The told aggregate. forex the in So Rupee you dollar I isn't significant. impact impact overall, U.S. was

if then is the in important range. the normal headline So, out are non-recurring, you which the positives are gross take both margins the the headline negatives, our and that –

XX.X, are that quarters, And from is point gross margin but several number India, And look at our in as one-offs If XX% divestment XX%. you aggregate, are XX%, our margins nonrecurring brands nature. to reported between if fluctuate gross has which in the our which is other there of in gross benefited is you making I'm last adjust margin base well, normal in these of a our range.

want I to understand. you that headline the that's So

Erez Israeli

our add not And do well. We that. to as I pattern gross to in of change going see want a forward margins the

the is which the we numbers, range mentioned, the inventory also between the will we continue of always game for in in [indiscernible] in etcetera, discussed like products So, will be of impacted as in the previous from just calls, future. nature far for and somewhere this

also that the reiterate Day can gross margins we margin as comfortable reiterate margin EBITDA we the is this Investor on about So, the what we and for in well. feel our discussed that commitments

a So range, that. wish, you to is consistent, is within more performance what see if range. the see the Probably it that lower the related now on of we we part but

Prakash Agarwal

this, XX% Mumbai, day to right. EBITDA trying about have And margin. you so we R&D had, [indiscernible] understand in understand know, talked And this you I met the when Okay. [indiscernible] you is

mean XXXX, So, in are in given we range, that on XXXX we had a that blip I track for fiscal QX?

Erez Israeli

it are comfortable that make achieve we this few not to So, Mumbai. saying, are ago. give right us allow next the weeks what feel in same. are it's with we that every necessarily the years, to just many, invest said, we we the we shareholders. a and get, going What was we’ll to is to consistent fluctuate. future in will the a return both want I discussed also the on number which sure the and for What we with will It number average It's that many in only quarter

of discussed a the than of in consistent indeed after of on that. be this. in it that this fluctuation it what be lower can is Mumbai. case than we kind launch this will we of continue higher And that, successful, are very This Lenalidomide, So, could average

Parag Agarwal

is And clarify is I stated product. It to margin we or just not aggregate for business. sorry, of and – XX% including must any the that excluding also aspiration the that clarify, our have particular

Prakash Agarwal

understood. Okay

exclusivity, [indiscernible] other right? well on Okay. say it strengths, And just as when a is, [ph] launch, you as includes clarification [Lenalidomide]

Erez Israeli

[Indiscernible].

Prakash Agarwal

sir? Sorry,

Erez Israeli

Yes, yes.

Parag Agarwal

That's right.

Erez Israeli

Correct.

Prakash Agarwal

the Thank all sir. and perfect you best. Okay,

Operator

you. Thank

next Manpuria ahead. America. Please line from of the go of is Neha question Bank Our from

Neha Manpuria

comments, there quarter, normalize, the I wouldn't If prices for taking at commodity were on XX.X% – to the we divestment Parag expectation my will the the out XX%, From again come in FX it that your seems margin. look also off. but like the if what, you are Thank gross questions. margin. I step brand closer

it launch which So, that range essentially what lead move talking this just us we're normalized of the Would Revlimid to will will I'm essentially understand trying from margins margin to normalization or, about? this. will improve to existing be what our help

Parag Agarwal

Yes.

wouldn’t So, out there will two, drivers. now Revlimid. key single I be is, three One

I say of that Revlimid would launches, an I new margins gross think of the First the would the significant of all, product driver including in one uptick margins. be

are be, second out, we and you. as sourcing. The would them where we Cidmus pointed brands sourcing I like Cidmus are given And is externally I there are have working towards internal example one

on of part productivity lead cost As work brands, an initiative, our will constantly in to we in-housing improvement which base. our

So lever. for driving is going are looking productivity our vendors, plant lever, of series programs cost to we that alternate of part a are clearly improvement larger a second improving is that which There yields. be

were where the gross productivity. Day, a the each years you where Investor now, range. are in presented gives on few our we [ph]. the and businesses, That's our And back, to that API in maintain status us [indiscernible] lever confidence for If second productivity the we CERI] [OSG's, going three be and the we remember we'll is further of that normal that the which have margins headroom significant

Erez Israeli

as to growth have on other is said, this as were and some of as the API of them visibility that well. Russia normalization India and well the we more we the going is And normalizations, going are discussed to that [indiscernible] as that some because you one-off

margin are confident be Revlimid, even gross without make to the will very there. we just sure, So,

Neha Manpuria

PSAI That's has understand base but sir. also quarter-on-quarter I the there business, very moderation. because previous to year at second helpful, impact And it the if in COVID, the been were of on I look

which to scale customers PSI up pass we the some the we our ability on on Because feel high, business, also, that business? customer deteriorated seem too on seen these being de-stocking able to have pressures cost we margins PSI that And there of too? customers? have business in limiting So, our inventory amount is to are

Erez Israeli

one is the we few the of a decline which So first, PCI. which in after component saw quarters the of API,

the This coming we and are that being quarter, products. continue growing single-digit do believe It's this to we see we new a see back growth. this driven primarily And but that is we will growth, very are and we pickup. by

new territories. products New and in customers

The under not are which us have [indiscernible] in is second are We that direct access. which do is it PCI. we for activities growing plus capturing countries in in the API piece that we we call selling

So, this The very, we very pickup although small it's business [consumed] is it's see significantly us. healthy on part, molecules. nicely very CDMO And also for not the in and actually yet now. third this growing, of the there for time you that this the number it is business product, this was from the activity appeared this But last quarter overall, a fact why it a do which growing declined. which if and [ph] like looks this is it normalize

Neha Manpuria

sir? margin the on And,

Erez Israeli

Sorry?

Neha Manpuria

up base business go much API a The it's grow. cost because that. on depends type of it's the Accordingly, the will very margins, and the will the margins very more

So, the margins will grow.

Neha Manpuria

so Got sir. it. Thank much you

Operator

Thank you.

go is Next Barclays. the ahead. of question Prasad from Please from Balaji line

Unidentified Analyst

on taking for my you Thank Prasad. [indiscernible] Hi. for is questions. This Balaji

key color circle could just expectations on Revlimid. Just and any also And wanted here? on provide Thank in further color on U.S. next? I further just any you. launches year this back to guess, you generic the

Parag Agarwal

to are to it looking And that will XXXX are and that September So, have XXXX. like and a for going After that, be launch permission I mentioned, limited And between forward a that will we during kind that naturally, we for XX, January to do ready of unlimited. happen. we XXXX. have volume September

call will discussion have United the with that confident what the other the we of Investor product we them. XX the the time-to-time the to it's grow have in which have with will we continue other of in of basis related we the when for blips-down] Day, we discussed to would consistent will plus nature launches, on States [blips-ups the launches and active [ph] of as CAGR As in what we we are states very and overall

quarter the I up. it believe that down, next we discussed will direction Overall, it's the this be So, a have past. bit is in quarter, in

Unidentified Analyst

you. Thank

Operator

you. Thank

of line Sameer Please go Baisiwala the from is question Morgan ahead. Next Stanley. from

Sameer Baisiwala

and on to your Hi. make QX. so EBITDA everyone. on sure Thank much evening you wanted just margins comment for Parag, good

did the normally which range EBITDA You say that what then do, exclude even you of you I margin one-offs, was is if XX%, in XX%? presume

Parag Agarwal

Yes.

Just to XX%. is clarify, Sameer EBITDA reported our margin

take Suboxone impact brand few it's [filled for gross of and base XX%. you the then I And sales the the out] impact, the a around and then – impacts margin. COVID If non-recurring example, the settlement [ph] out in adverse divestment,

XX% to in adjust is our you XX%. If EBITDA the range of normal for that,

margin range. If you our typically look this at in fluctuates the several EBITDA quarters, last

that's what normal I So the range. mean by

Sameer Baisiwala

Parag, Okay. question that that’s What's of what items. to say just for what's very [December] that? I trying of crores clear. the revenue line recorded sale I'm EBITDA the against the second impact Yes. cost through INDXXX And have [ph]? you the guess brand, is

Parag Agarwal

amount, entire Sameer. the divestment total the the falls It's proceeds and of amount total to The therefore EBITDA.

Sameer Baisiwala

from Thank Okay, all side. That's my you. got it.

Parag Agarwal

you. Thank

Operator

Thank Please from next Capital. you. go question ahead. Surya The Philip the Patra from of is line

Surya Patra

Yes.

So, the the on first question is [Technical Difficulty].

Operator

you Patra, is Request not clear. handset. to the Mr. voice you use very

Surya Patra

Hi, fine? is it

Operator

Yes.

Surya Patra

starting you likely on first question was Revlimid. the So launch of about September. the product mentioned Sir, the the

or would are double-digit currently. launch] mid-single-digit [reverse trend] low-single-digit of the condition condition, condition was the indicate trying And Just how [ph] kind importantly, volume sense competitive launched. under also here? I the percentage [ph] even I have more result [prescription having where of the intensity that they that the to is on kind what what settlement? volume understand is a is Because limited wanted volume But only to have should be

for how why [ph] the So settlement trying limited a condition [rigid] is understand that to place? just is volume

Erez Israeli

volumes in we It rigid. the I of case stated is share In a sell exactly mentioned. like the is percentage agreement the can market confidential, that the that and and amount

discuss cannot us. I very that. it's So, launch for significant Naturally, a

be for intensity competition, will course, That's many As seen. how their yet there market depends point will the the players at what of volumes can be as of they be time? into of to and supply the that

that see. should a for to We wait it will us. very have launch good be We and believe

Surya Patra

of could limit point kind this, there my Okay. larger. larger then condition price the was not is hence Because also reserved, be could then the erosion be a also a competition and volume if

was I that that So, understand. trying ultimate point to is the

Erez Israeli

the understand share I cannot the details I [ph]. Unfortunately, No, of [outlook] question. the

Surya Patra

what the that we is obviously, we global Fine. has seen, revenue the around [XXF] growth growth, the you growth Sir, a come from of question but large the so it of filing, if consider, in part a the is generic therapeutic year, on XX% as last said [ph] have kind have mix, revenue second the segment. anti-infective

in So of segment. there jump Whereas kind of XX%, remains low-double-digit single-digit trend. of or was this a kind either other a muted or the segment kind

the time trend then is markets year, the whether that say, emerging that have Russia, if area a branded a for of contribution for growth whether current that? of year the the like the we kind being for let's So, concern moderated in India, a can business, ignore Revlimid for current general

Erez Israeli

I do not see a concern.

Surya Patra

Okay.

not that's So a concern?

Erez Israeli

do a concern. see I not

Surya Patra

Sure.

you safe origin fact, arrangement of upfront sir, question, licensing been booked is so last has this U.S. $X said You whether the quarter? had to in that [indiscernible] what with in million that

Parag Agarwal

period, which contract amortized to be not No, booked. four the No. has years. It is over over it is been

Surya Patra

– also Even is okay. period? that amount the upfront amortized being the over is But

Parag Agarwal

That's right.

Surya Patra

Yes. Okay. a you. Thanks lot. Thank

Operator

the Please Capital. Agarwal of The from Bridge ahead. Tarang Old is go Thank next you. question line from

Tarang Agarwal

Hello, sir. Good evening.

one strategy. what Just mean, question, recycled on India. brands the M&A in we’ve your observed I some of is, sir, we've

a side while small one of on Cidmus got for You've you've a couple injectables bought products. also and

you So, which other those thought process amount and on India? rid get just of wanted behind is then getting of can sense decent the kind be divisions of we what piece get devoted advantage small injectables brands it release to into other by have? why, Does in sales a force, some the that the

Erez Israeli

Yes.

the we on in to have and which which a which want and for segment which you and we clear don't. focus on we brands segment India, The we strategy don't, when divestment brands thank focus to question. in So

company So, what it's the brands capital you're and to to the going top focus, for which the you and see that can feel better in not also are it, on monetize allocation performance it. the the get we that in We like for for of the a of alternative company. value very nice India of

brands we we actually focus. not buy did likely quarter. this in which like we we have will So, sale And India that what will [indiscernible] and will brands are even

in the We most Novartis will take deals.

in of order the Number the to what ourselves competition the are to the low we to India case And this develop That's if In or with funds. we United not assets, of others. did to the especially create did allow we also it States] we activities time us with both. injectables. both X. our going getting establish means a it [customer find to cost we and better Suboxone, when portfolio what for the from add at bring to if do see not the In trying by the will past, Horizon the did we United United to are the in X we are So, Horizon those in States are us that's And and [ph]. States, for always way have you the aspiration of they

So, for so. we'll it's something do we many to doing that continue are years and

that will as we acquired. and So, we U.S. to develop our pipeline be ourselves, licensing as in the well products continue products that

Tarang Agarwal

follow-up to release Okay. kind of of these some brands? EBITDA the maybe might lost or you of focus that of India have profit the kind MR brands on by it of bandwidth go on And a some gross letting just and piece, virtue does the

Erez Israeli

This absolutely, So that brands us helping focus the our we means. part what to it is focus believe. resources of on is

we be that but we that to of confidence that us on we sales to focusing on have that terms believe faster basis, long-term of on advantage. help for will we by that, go the will In take actually quarter-on-quarter, we year's the better growth, it have we competitive to naturally, area And need adjust the grow. we’ll and missing those believe will may

Tarang Agarwal

loss by all the brands? in of EBITDA [indiscernible] are virtue divesting And Okay. these

Erez Israeli

the EBITDA better not take have that for actually because it. you It's would deal made You're the product that a you you're versus this losing, the tax got gaining if company. for

Tarang Agarwal

Okay. Thank you.

Operator

Thank you.

question the next from Kunal Dhamesha from is Macquarie. Our of line

Kunal Dhamesha

I annual question. semi-annual or Difficulty] basis one mean, Just basis? [Technical

Parag Agarwal

not your can repeat? is Kunal, voice clear, you

Kunal Dhamesha

repeat. I’ll Yes,

allowed terms basis? or percentage basis calendar for calculated us of Revlimid, it annual year in is on for So volume

Erez Israeli

confidential at stage. are details this these All

Kunal Dhamesha

just I Thanks. Okay. had one question.

Operator

Thank B] [ph] you. Capital. The next from question is from the ahead. InCred Please line [Vinod go of

Unidentified Analyst

Hi.

clarification. a Just

correct? crores of is brand revenue this generated So, you of India that of you right, this crores reported, part that that INDXXX have INDX,XXX sales

Parag Agarwal

right. that's Yes,

Unidentified Analyst

Okay.

Second, is competition incremental the entry products? it see Did of existing products. mentioned this any a set asking in I'm in incremental players of you about in you got of that couple U.S. because Since Or the key new aggressive? more a products? the to player you specifically

Erez Israeli

product, Apotex for these both QX. in launched Yes, during competition

Unidentified Analyst

naming mind you them? do So,

Erez Israeli

I said company Apotex, Apotex. the

Unidentified Analyst

Yes, naming do you the mind products?

Erez Israeli

Suboxone said I and Icosapent. it's

Unidentified Analyst

Okay.

it. got Okay,

you. Okay. Great. Thank

Operator

Jhaveri Capital. Crown from go you. Darshan is line the Thank Please ahead. from question next The of

Darshan Jhaveri

for opportunity. you Thank evening. Good Hello. the

have just if I I may. one So, question,

you some So, that in the quarter, performance rate one-offs very could as that? on we take be could have, sustainable color this a and performance could helpful considering run That the or all just give base we this sir. quarter

Erez Israeli

word I – Yes. This use to is the like consistent.

So, performance. consistent it's our investment the one with consistent, in much with strategy very and also the

there discussed we we still the and U.S. [indiscernible]. be the which and that a U.S. sometimes we and single-digit, that in facing sometimes But the stuff discussed, very the sometimes favor our are [ROCE] are With the the of are the understanding double-digit, past, will not. with EBITDA situation we what all overall, targets we in market, consistent discussing in will the that in be growth, outside [ph]

Darshan Jhaveri

so margins FY on only, is year in So, the normal would along would see XXXX considerably just you lines us around give and will otherwise and we a be look range revenue clarify So, these what things, could maybe this in right? the this same sir? to clarity some

Erez Israeli

fluctuate, I'm grow third giving to Again, of before. still This U.S., that be I valid. very will allow even in double-digit of it those the area. this are sometimes ROCE. that is of much We guidance, said future. This be we well neighborhood we and sometimes And are EBITDA cannot and that guide up, down, about on aiming we the quarter numbers U.S. us we but what believe in there. continuing for are but and we the single-digit We that, we into but a not just in is outside are from repeating specific believe [XX/XX] year. the still not said This to we can will invest

consistent for we like So, years many be that. can

Darshan Jhaveri

answered Thank my you you so questions. That Okay. so Thank much. much.

Operator

Thank you.

Axis from ahead. Prakash the go of Our line from next Agarwal Please question Capital. is

Prakash Agarwal

Yes. Hi. Thanks for follow-up. the

Just are on And seeing stoppers, etcetera? business, the in challenges supply syringes, we the injectable annually? what current is size terms of some

Parag Agarwal

So, Prakash of is injectables. from XX% about business our XX%,

Erez Israeli

right And supply. do we see a now of challenge not

Prakash Agarwal

in Okay. talked about peer the one in stoppers shortages group, especially the market? why. have been I've for and recent of U.S. your Because syringes, call, there That's

Erez Israeli

that. recall don't I Okay.

Prakash Agarwal

this in of back. case quarter, won on recognizing sometime you understand was secondly, And endeavors, this I the perfect. Okay,

triggers the quarter? what particularly for So, recognition, this

Erez Israeli

on the in Now, case. was the that litigation we the won past IP

were we X is the for to product in from the were marketplace. and were If we that you million XXXX a we the launched $XX recall, denying that and coming injected when for June we market go period of to settlement denied to time months, the

Prakash Agarwal

Yes.

quarters some we the case? So when back, won

Erez Israeli

means we to we period. because injunction the case, case I’m and we during that market believe are be the infringement go is to two It win are will to One repeating, there in back folks IP No, nice the money case. the is that decide that the to the should situation separate other that the issues. get win we

part. is this for So, second the

Parag Agarwal

that's we entered this have in a for is So, are accounted this settlement quarter that into why we now. and

Prakash Agarwal

from That's side. Okay. Thank my much. all you. you so Perfect. Thank

Operator

you. from Madhav question from The Marda Please the is line next go International. Thank of FIS ahead.

Madhav Marda

just one EBITDA question, we which India have have [indiscernible] is have recognized? I to crores sold So, branch the Hi, like quick which the you what it? INDXXX good evening. we that had sold the

Erez Israeli

So, I answered before.

Parag Agarwal

It's a multiple.

multiple. just clarify. I'm been the multiples, to ranges average multiple different have different X.X they between different So, sales, of X the brands. to you They sold companies Yes. [indiscernible] to giving have at but

Madhav Marda

only the question. That's you. Thank perfect. Okay,

Parag Agarwal

you. Thank Yes.

Operator

comments. and of you over and time, hand due for today. Ladies would be sir. for I over Mr. paucity last Agarwal question now the you. closing conference you, Amit Thank Thank our that gentlemen, to to to

Amit Agarwal

earnings of today's for call. queries, team. Relations with us in any joining for case Investor touch further all you In get you. Thank Thank please

Operator

and call. much. you your on all And Limited that you now Thank you concludes may Thank Reddy's today's Ladies of connect very lines. Laboratories Dr. for Thank behalf you. joining us. gentlemen,

Dr. Reddy's Laboratories Limited (RDY) 31 Jul 222023 Q1 Earnings call transcript