On May 19 , 2022: Dr. Reddy’s Laboratories Ltd. (BSE: 500124 | NSE: DRREDDY | NYSE: RDY | NSEIFSC: DRREDDY) reported its consolidated financial results for the fourth quarter and full year ended March 31, 2022 (Press release, Dr Reddy’s, MAY 19, 2022, View Source [SID1234614845]). The information mentioned in this release is on the basis of consolidated financial statements under International Financial Reporting Standards (IFRS). Commenting on the results, Co-Chairman & MD, G V Prasad said: "We delivered healthy growth in revenue, though the profits were impacted by impairment charges.
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In spite of multiple external challenges, our core businesses performed well driven by an increase in market share, some strong launches and productivity improvement. We will continue to focus on growing our core businesses, invest in future growth drivers, and work towards greater integration of Sustainability in our businesses." Revenue Analysis [Q4 and full year FY22] Global Generics (GG) GG segment at Rs. 179.2 billion higher by 16% over FY21. This growth was driven by good performance across all our markets with strong growth in Emerging markets and India.
Q4 revenue at Rs. 46.1 billion, YoY growth of 19% and QoQ growth of 4%. The YoY & QoQ growth was driven by growth across all our markets, however the QoQ growth was partially impacted due to a decline in revenues in India. North America Revenues from North America Generics for the year at Rs. 74.9 billion, YoY growth of 6%. The growth was contributed by new launches and scale up of existing products, which was partially offset by price erosion. Revenues for Q4 at Rs. 20.0 billion, YoY growth of 14% and QoQ growth of 7%. The YoY and QoQ growth were primarily on account of new product launches and volume traction in some of our products, partly offset by price erosion.
During this quarter, we launched 3 new products – Vasopressin Injection, Nicotine Lozenges Cherry Flavour (OTC) and Clobetasol Shampoo in Canada and for full year we have launched 17 products. During the year, we filed 7 new Abbreviated New Drug Applications (ANDAs) with the US Food and Drug Administration (USFDA). As of 31st March 2022, cumulatively 90 generic filings are pending for approval with the USFDA (87 ANDAs and 3 NDAs under 505(b)(2) route). Out of the pending 87 ANDAs, 44 are Para IVs, and we believe 24 have ‘First to File’ status. Europe Revenues from Europe for the year at Rs. 16.6 billion. YoY growth of 8%, primarily on account of volume traction in base business and new product launches, which was partially offset by price erosion in some of our products. Revenues for Q4 at Rs. 4.4 billion, YoY growth of 12% and QoQ growth of 10%. YoY and QoQ growth was primarily on account of new product launches, partly offset by price erosion in the base business. India Revenues from India for the year at Rs. 42 billion. Year-on-year growth of 26% was primarily attributable to an increase in both sales volume and price of our existing products, along with additional revenues from the launch of new products.
The growth was also aided by covid product sales. During FY2022, we launched 20 new brands in India, including Sputnik-V vaccine for Covid-19. Revenues for Q4 at Rs. 9.7 billion, YoY growth of 15% and QoQ decline of 6%. YoY growth primarily driven by volume traction in the base business, favorable price variance, new product launches, and non-core brand divestments while QoQ decline was majorly due to decline in volumes of some of our products.Emerging Markets Revenues from Emerging Markets for the year at Rs. 45.7 billion, growth of 30% YoY.-Revenues from Russia for the year at Rs. 20.9 billion, YoY growth of 32%. This growth was driven by improved base business performance, launch of new products during the year and divestment of a few non-core brands.-Revenues from other CIS countries and Romania for the year at Rs. 8.3 billion, YoY growth of 11%. Growth was on account of new product launches, partly offset by lower volumes.-Revenues from Rest of World (RoW) territories for the year at Rs. 16.5 billion, YoY growth of 40%.
Growth primarily on account of new launches, volume traction in key products and sale of Covid products, partially impacted by adverse price variance in certain markets. Revenues for the quarter are Rs. 12 billion, YoY growth of 36%, QoQ growth of 4%.-Revenues for Russia for Q4 at Rs. 6.9 billion, YoY growth of 70%, QoQ growth of 45%. The increase is majorly attributable to traction in volume of base business and income from divestment of a few non-core brands. However, the QoQ growth was partly impacted by adverse forex rates.-Revenues from other CIS countries and Romania for the quarter are Rs. 2.3 billion, YoY growth of 20%, QoQ decline of 4%. YoY growth was primarily due to launch of new products and price benefits in some of our markets. The QoQ decline was on account of lower volume traction in some of our markets and adverse forex rates.-Revenues from Rest of World (RoW) territories for Q4 are Rs. 2.9 billion, YoY decline of 1% and QoQ decline of 35%. The QoQ decline is primarily due to higher base of previous quarter which includes sale of covid related products, lower volumes in some of our products and adverse price variance in some of our markets, which was offset partially by new product launches. Pharmaceutical Services and Active Ingredients (PSAI)
Revenues from PSAI at Rs. 30.7 billion. YoY decline of 4%. The decline was majorly on account of price erosion in some of our products. Revenues for Q4 at Rs. 7.6 billion, YoY decline of 5% and QoQ growth of 4%. YoY decline was primarily due to lower volumes and price erosion while the QoQ growth was driven by new product sales. During the year, we have filed 10 DMFs in the US, of which 3 DMFs were filed in Q4FY22. Proprietary Products (PP) & Others Revenues from PP & others for the year at Rs. 4.5 billion, YoY growth of 34%. The growth is attributable to recognition of a license fee associated with the sale of our U.S. and Canada territory rights for ELYXYB (celecoxib oral solution) 25 mg/ml, to BioDelivery Sciences International, Inc during Q2 FY22.
Revenues for Q4 at Rs. 693 million.Income Statement Highlights: Gross profit margin for the year at 53.1%, a decrease of ~120 bps over previous year. The decrease was driven by pricing pressure in the North America & Europe, lower export benefits, and an increase in the inventory provisions. This was partially offset by productivity benefits. Gross profit margin for GG and PSAI business segments are at 57.6% and 22.2% respectively. Gross profit margin for the Q4 at 52.9% (GG: 58.2%, PSAI: 18.4%). Gross margin declined by ~80 bps YoY and by ~90 bps QoQ. The decline was primarily due to price erosion, an increase in the inventory provisions, which was partly offset by income from divestment of non-core brands. Selling, general & administrative (SG&A) expenses for FY22 at Rs. 62.1 billion, an increase of 14% on a YoY basis. This increase was primarily due to annual increments, investments in brands and digitalization, and royalty paid on sales. SG&A expenses for Q4 at Rs. 15.7 billion, YoY increase of 9% and QoQ increase of 2%. The increase is mainly due to provision made of Rs. 1.0 billion pertaining to litigation with Texas state, US. SG&A as a % to sales for the full year remained largely in line with FY21. Impairment charge at Rs. 7.6 billion in FY22. This is majorly due to product impairment of PPC-06 (Tepilamide Fumarate Extended Release Tablets) of Rs. 4.3 billion on account of its decrease in market potential and impairment of Shreveport plant assets and Goodwill of Rs. 3.1 billion which were taken considering the triggers which occurred during the year. Research & development (R&D) expenses in FY22 at Rs. 17.5 billion. As % to Revenues – FY22: 8.2% | FY21: 8.7%. R&D expenses for Q4 at Rs. 4.3 billion, as % to revenues stood at 8.0%. Our focus continues on building a global pipeline of new products across our markets.
Other operating income for the year at Rs. 2.8 billion compared to Rs. 1 billion in FY21. The increase was on account of recognition of income towards sale of our rights relating to anti-cancer agent E7777 (denileukin diftitox) to Citius Pharmaceuticals in Q2 FY22. Other operating income in Q4 is Rs. 0.3 bn. Net Finance income for the year at Rs. 2.1 billion compared to Rs. 1.7 billion in FY21. The increase is primarily on account of higher foreign exchange gain in current year as compared to FY21. Net finance income in Q4 is Rs. 0.9 billion. Profit before Tax for the year at Rs. 32.3 billion, growth of 22%. Profit before Tax for Q4 is Rs. 2.5 bn. Profit after Tax for the year at Rs. 23.6 billion and for Q4 at Rs. 0.9 billion. The effective tax rate for the year has been 27.0% as compared to 34.7% in FY21 and that for the quarter has been at 64.8% as compared to 41.2% in Q4 FY21. The ETR was higher on account of lower Profit before Tax, due to the impairment charge taken. Diluted earnings per share for the year is Rs. 141.7. Diluted earnings per share for Q4 is Rs. 5.3.
Other Highlights: EBITDA for FY22 at Rs. 51.4 billion and the EBITDA margin is 24.0%. EBITDA for Q4 FY22 is at 13.0 billion and the EBITDA margin in 23.9%. Capital expenditure for FY22 is at Rs. 14.7 billion. Capital expenditure for Q4 FY22 is at Rs. 3.7 billion. Free cash-flow for FY22 is at Rs. 11.6 billion and for Q4 it is at Rs. 4.8 billion. Net cash surplus for the company is at Rs. 15.5 billion as on March 31, 2022. Consequently, net debt to equity ratio is (0.08). The Board has recommended payment of a dividend of Rs. 30/-per equity share of face value Rs. 5/-each (600% of face value) for the year ended March 31, 2022 subject to approval of members.
Earnings Call Details (05:30 pm IST, 08:00 am EDT, May 19, 2022) The management of the Company will host an earnings call to discuss the Company’s financial performance and answer any questions from the participants.