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Dr. Reddy's (RDY) Q4 Earnings Top, North America Sales Grow
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Dr. Reddy's Laboratories Limited (RDY - Free Report) reported fourth-quarter fiscal 2024 earnings of 94 cents per American Depositary Share (ADS), which beat the Zacks Consensus Estimate of 86 cents per ADS. In the year-ago quarter, the company reported earnings of 69 cents per ADS.
Revenues grew 12% year over year to $850 million, surpassing the Zacks Consensus Estimate of $825 million. The year-over-year improvement was primarily driven by growth in global generics revenues in North America as well as Emerging Markets.
Shares of the company have gained 2.5% year to date compared with the industry’s 5% growth.
Image Source: Zacks Investment Research
Quarter in Detail
Dr. Reddy’s reports revenues under three segments: Global Generics, Pharmaceutical Services & Active Ingredients (PSAI) and Others.
Global Generics revenues were INR 61.2 billion, up 13% year over year, in the fiscal fourth quarter. The increase was primarily driven by new product launches and increased volumes of the company’s existing core products, partially offset by price erosion in certain markets.
During the reported quarter, Dr. Reddy’s launched five new products in the North America region, of which four were unveiled in the United States.
As of Mar 31, 2024, cumulatively, 86 generic filings were pending approval from the FDA (81 abbreviated new drug applications and five new drug applications). Of these 86 pending filings, 50 are Para IVs.
PSAI revenues were INR 8.2 billion, up 6% from the year-ago quarter. The improvement was fueled by revenues from new products and favorable forex rates, partly offset by price decline.
Revenues in the Others segment came in at INR 1.4 billion, up 54% year over year.
Gross margin improved to 58.6% from 57.2% in the year-ago quarter due to a rise in product mix and productivity cost savings.
Research and development expenses jumped 28% year over year to $83 million, driven by increased spending in ongoing clinical studies on differentiated assets and other developmental efforts.
Selling, general and administrative expenses were $246 million, up 14% year over year, primarily owing to investments in business growth and other initiatives.
Fiscal 2024 Results
Revenues in fiscal 2024 came in at $3.3 billion, up 14% from fiscal 2023. Earnings per share totaled $4.01 compared with $3.25 in fiscal 2023.
Dr. Reddy's Laboratories Ltd Price, Consensus and EPS Surprise
RDY received a Complete Response Letter from the FDA for its biologics license application for a proposed biosimilar of rituximab.
During the fourth quarter, the company entered into an exclusive partnership with Sanofi to promote and distribute its vaccine brands in India. RDY also partnered with Bayer to distribute the second brand of heart failure management drug, vericiguat, in India.
Our Take
Dr. Reddy’s fourth-quarter results were better than expected. The generic of blockbuster oncology drug Revlimid boosted the results.
However, investors were not impressed, and shares were down 4.73% post the earnings announcement. The lack of near-term catalysts remains a woe.
Zacks Rank and Stocks to Consider
Dr. Reddy’s currently carries a Zacks Rank #4 (Sell).
In the past 30 days, the Zacks Consensus Estimate for Ligand’s 2024 and 2025 earnings per share (EPS) has remained constant at $4.56 and $5.27, respectively. Shares of LGND are up 2.5% year to date.
In the past 60 days, estimates for ANI Pharmaceuticals’ 2024 EPS have improved from $4.40 to $4.44. Shares of ANIP have jumped 21% year to date. ANIP’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 109.06%.
In the past 30 days, the Zacks Consensus Estimate for BBIO’s 2024 loss per share has narrowed from $3.61 to $3.12. BBIO beat estimates in one of the trailing four quarters and missed the mark on the other three occasions, delivering an average surprise of 11.73%.
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Dr. Reddy's (RDY) Q4 Earnings Top, North America Sales Grow
Dr. Reddy's Laboratories Limited (RDY - Free Report) reported fourth-quarter fiscal 2024 earnings of 94 cents per American Depositary Share (ADS), which beat the Zacks Consensus Estimate of 86 cents per ADS. In the year-ago quarter, the company reported earnings of 69 cents per ADS.
Revenues grew 12% year over year to $850 million, surpassing the Zacks Consensus Estimate of $825 million. The year-over-year improvement was primarily driven by growth in global generics revenues in North America as well as Emerging Markets.
Shares of the company have gained 2.5% year to date compared with the industry’s 5% growth.
Image Source: Zacks Investment Research
Quarter in Detail
Dr. Reddy’s reports revenues under three segments: Global Generics, Pharmaceutical Services & Active Ingredients (PSAI) and Others.
Global Generics revenues were INR 61.2 billion, up 13% year over year, in the fiscal fourth quarter. The increase was primarily driven by new product launches and increased volumes of the company’s existing core products, partially offset by price erosion in certain markets.
During the reported quarter, Dr. Reddy’s launched five new products in the North America region, of which four were unveiled in the United States.
As of Mar 31, 2024, cumulatively, 86 generic filings were pending approval from the FDA (81 abbreviated new drug applications and five new drug applications). Of these 86 pending filings, 50 are Para IVs.
PSAI revenues were INR 8.2 billion, up 6% from the year-ago quarter. The improvement was fueled by revenues from new products and favorable forex rates, partly offset by price decline.
Revenues in the Others segment came in at INR 1.4 billion, up 54% year over year.
Gross margin improved to 58.6% from 57.2% in the year-ago quarter due to a rise in product mix and productivity cost savings.
Research and development expenses jumped 28% year over year to $83 million, driven by increased spending in ongoing clinical studies on differentiated assets and other developmental efforts.
Selling, general and administrative expenses were $246 million, up 14% year over year, primarily owing to investments in business growth and other initiatives.
Fiscal 2024 Results
Revenues in fiscal 2024 came in at $3.3 billion, up 14% from fiscal 2023. Earnings per share totaled $4.01 compared with $3.25 in fiscal 2023.
Dr. Reddy's Laboratories Ltd Price, Consensus and EPS Surprise
Dr. Reddy's Laboratories Ltd price-consensus-eps-surprise-chart | Dr. Reddy's Laboratories Ltd Quote
Pipeline Updates
RDY received a Complete Response Letter from the FDA for its biologics license application for a proposed biosimilar of rituximab.
During the fourth quarter, the company entered into an exclusive partnership with Sanofi to promote and distribute its vaccine brands in India. RDY also partnered with Bayer to distribute the second brand of heart failure management drug, vericiguat, in India.
Our Take
Dr. Reddy’s fourth-quarter results were better than expected. The generic of blockbuster oncology drug Revlimid boosted the results.
However, investors were not impressed, and shares were down 4.73% post the earnings announcement. The lack of near-term catalysts remains a woe.
Zacks Rank and Stocks to Consider
Dr. Reddy’s currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the healthcare industry are Ligand Pharmaceuticals (LGND - Free Report) , ANI Pharmaceuticals (ANIP - Free Report) and BridgeBio Pharma (BBIO - Free Report) . While LGND sports a Zacks Rank #1 (Strong Buy), ANIP & BBIO carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 30 days, the Zacks Consensus Estimate for Ligand’s 2024 and 2025 earnings per share (EPS) has remained constant at $4.56 and $5.27, respectively. Shares of LGND are up 2.5% year to date.
In the past 60 days, estimates for ANI Pharmaceuticals’ 2024 EPS have improved from $4.40 to $4.44. Shares of ANIP have jumped 21% year to date. ANIP’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 109.06%.
In the past 30 days, the Zacks Consensus Estimate for BBIO’s 2024 loss per share has narrowed from $3.61 to $3.12. BBIO beat estimates in one of the trailing four quarters and missed the mark on the other three occasions, delivering an average surprise of 11.73%.