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Dr. Reddy's (RDY) Q4 Earnings Decline Y/Y, Sales Increase

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Dr. Reddy's Laboratories Limited (RDY - Free Report) reported fourth-quarter fiscal 2022 earnings of 7 cents per American Depositary Share compared with 29 cents (excluding impairment charges) reported in the year-ago quarter.

In fourth-quarter fiscal 2022, revenues grew 15% year over year to $717 million.

Shares of the company have decreased 21.5% in the year so far compared with the industry’s decline of 29.8%.

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Quarter in Detail

Dr. Reddy’s reports revenues under three segments — Global Generics; Pharmaceutical Services & Active Ingredients (“PSAI”); and Proprietary Products and Others.

Global Generics revenues were INR 46.11 billion, up 19% year over year, in the fiscal fourth quarter. Growth was led by higher demand across all key markets.

The company launched three products in North America, including Vasopressin Injection, Nicotine Lozenges Cherry Flavour (OTC) and Clobetasol Shampoo.

As of Mar 31, cumulatively, 90 generic filings were pending approval from the FDA (87 abbreviated New Drug Applications [ANDAs] and three new drug applications). Of these 87 ANDAs, 44 are Para IVs and 24 have first-to-file status.

PSAI revenues were INR 7.6 billion, down 5% from the year-ago quarter, primarily due to lower volumes and price erosion for some products.

Revenues in the Proprietary Products segment came in at INR 693 million, up 10% year over year.

Research and development expenses were up 6% year over year to $57 million. The company is focused on building a global pipeline of new products across its markets.

Selling, general and administrative expenses were $207 million, up 9% year over year, primarily owing to a provision made of INR 1 billion pertaining to litigation with the state of Texas.

Fiscal 2022 Results

The company reported fiscal 2022 earnings of $1.87 per ADS, up from $1.37 in fiscal 2021.

Revenues for fiscal 2022 increased 13% year over year to $2.8 billion.

Our Take

In fourth-quarter fiscal 2022, Dr. Reddy’s top line registered year-over-year growth while the bottom line declined year over year.

The company continues to face price erosion in the North America generics market, which will adversely impact sales.

Zacks Rank & Stocks to Consider

Dr. Reddy’s currently carries a Zacks Rank #5 (Strong Sell).

Better-ranked stocks in the healthcare sector are Applied Therapeutics, Inc. (APLT - Free Report) , Aeglea BioTherapeutics, Inc. and EyePoint Pharmaceuticals, Inc. (EYPT - Free Report) , all carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Applied Therapeutics’ loss per share has narrowed 27.1% for 2022 and 20.2% for 2023 over the past 60 days.

Earnings of Applied Therapeutics have surpassed estimates in one of the trailing four quarters, met the same once and missed the same on the other two occasions. APLT delivered an earnings surprise of -0.67% on average.

AegleaBio Therapeutics’ loss per share estimates have narrowed 23.2% for 2022 and 30.6% for 2023 over the past 60 days.

Earnings of AegleaBio Therapeutics have surpassed estimates in two of the trailing four quarters and missed the same on the other two occasions. AGLE delivered an earnings surprise of 9.47% on average.

EyePoint Pharmaceuticals’ loss per share estimates have narrowed 8.7% for 2022 and 12.5% for 2023 over the past 60 days.

Earnings of EyePoint Pharmaceuticals have surpassed estimates in one of the trailing four quarters and missed the same on the other three occasions. EYPT delivered an earnings surprise of -5.80% on average.


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