Press Release

CONTACT
DR. REDDY'S LABORATORIES LTD. INVESTOR RELATIONS MEDIA RELATIONS
8-2-337, Road No. 3, Banjara Hills,
RICHA PERIWAL richaperiwal@drreddys.com USHA IYER
Hyderabad - 500034. Telangana, India.
AISHWARYA SITHARAM aishwaryasitharam@drreddys.com ushaiyer@drreddys.com

Dr. Reddy’s Q1FY25 Financial Results

Hyderabad, India, July 27, 2024: Dr. Reddy’s Laboratories Ltd. (BSE: 500124 | NSE: DRREDDY |
NYSE: RDY | NSEIFSC: DRREDDY) today announced its consolidated financial results for the quarter
ended June 30, 2024. The information mentioned in this release is based on consolidated financial
statements under International Financial Reporting Standards (IFRS).

Q1FY25

Revenues ₹ 76,727 Mn
[Up: 14% YoY; 8% QoQ]

Gross Margin 60.4%

[Q1FY24: 58.7%; Q4FY24: 58.6%]

SG&A Expenses ₹ 22,691 Mn

[Up: 28% YoY; 11% QoQ]

R&D Expenses ₹ 6,193 Mn

[8.1% of Revenues]

EBITDA ₹ 21,599 Mn
[28.2% of Revenues]

Profit before Tax ₹ 18,821 Mn

[Up: 2% YoY; 18% QoQ]

Profit after Tax ₹ 13,920 Mn

[Down: 1% YoY; Up: 7% QoQ]

Commenting on the results, Co-Chairman & MD, G V Prasad said: “We had a good start to the new
fiscal year and our growth & profitability was mainly driven by our generics business. We continue to
strengthen our core businesses and have made strategic investments in biologics, consumer healthcare
and innovation to drive patient impact and value creation.”

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All amounts in millions, except EPS All US dollar amounts based on convenience translation rate of 1 USD = ₹ 83.33

Dr. Reddy’s Laboratories Limited & Subsidiaries

Revenue Mix by Segment for the quarter

Q1FY25 Q1FY24 YoY Q4FY24 QoQ

Particulars
(₹) (₹) Gr % (₹) Gr%
Global Generics 68,858 60,083 15 61,191 13%
North America 38,462 32,002 20 32,626 18%
Europe 5,265 5,047 4 5,208 1%
India 13,252 11,482 15 11,265 18%
Emerging Markets 11,878 11,552 3 12,091 (2%)
Pharmaceutical Services and Active
7,657 6,709 14 8,219 (7%)
Ingredients (PSAI)
Others 212 592 (64) 1,420 (85%)
Total 76,727 67,384 14 70,830 8%

Revenue Mix for the quarter

10%
0.3%

15%

50%

17%

7%

North America Generics Europe Generics India Generics Emerging Markets Generics PSAI Others

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 Consolidated Income Statement for the quarter
Q1FY25 Q1FY24 YoY Q4FY24 QoQ
Particulars
($) (₹) ($) (₹) Gr % ($) (₹) Gr%
Revenues 921 76,727 809 67,384 14 850 70,830 8
Cost of Revenues 365 30,383 334 27,831 9 352 29,347 4
Gross Profit 556 46,344 475 39,553 17 498 41,483 12
% of Revenues 60.4% 58.7% 58.6%
Operating Expenses
Selling, General & Administrative Expenses 272 22,691 212 17,702 28 246 20,476 11
% of Revenues 29.6% 26.3% 28.9%
Research & Development Expenses 74 6,193 60 4,984 24 83 6,877 (10)
% of Revenues 8.1% 7.4% 9.7%
Impairment of Non-Current Assets, net 0 5 0 11 (55) (2) (173) (103)
Other Operating (Income)/Expense (6) (470) (9) (780) (40) (8) (656) (28)
Results from Operating Activities 215 17,925 212 17,636 2 180 14,959 20
Finance (Income)/Expense, net (10) (837) (9) (784) 7 (12) (1022) (18)
Share of Profit of Equity Accounted Investees,
(1) (59) (1) (43) 37 (0) (35) 69
net of tax
Profit before Income Tax 226 18,821 222 18,463 2 192 16,016 18
% of Revenues 24.5% 27.4% 22.6%
Income Tax Expense 59 4,901 53 4,438 10 35 2,946 66
Profit for the Period 167 13,920 168 14,025 (1) 157 13,070 7
% of Revenues 18.1% 20.8% 18.5%

Diluted Earnings per Share (EPS) 1.00 83.46 1.01 84.22 (1) 0.94 78.35 7

EBITDA Computation for the quarter

Q1FY25 Q1FY24 Q4FY24
Particulars
($) (₹) ($) (₹) ($) (₹)
Profit before Income Tax 226 18,821 222 18,463 192 16,016
Interest (Income) / Expense, net* (12) (1,037) (8) (685) (10) (835)
Depreciation 30 2,508 27 2,281 29 2,421
Amortization 16 1,302 16 1,302 15 1,291
Impairment 0 5 0 11 (2) (173)
EBITDA 259 21,599 256 21,372 225 18,720
% of Revenues 28.2% 31.7% 26.4%
*Includes Income from Investment

Key Balance Sheet Items

As on 30th Jun 2024 As on 31st Mar 2024 As on 30th Jun 2023
Particulars
($) (₹) ($) (₹) ($) (₹)
Cash and Cash Equivalents and Other Investments 1,147 95,599 990 82,529 734 61,162
Trade Receivables 973 81,088 964 80,298 925 77,095
Inventories 823 68,568 763 63,552 629 52,398
Property, Plant, and Equipment 964 80,343 923 76,886 807 67,207
Goodwill and Other Intangible Assets 497 41,374 494 41,204 508 42,306
Loans and Borrowings (Current & Non-Current) 368 30,675 240 20,020 150 12,520
Trade Payables 409 34,109 371 30,919 332 27,682
Equity 3,536 2,94,627 3,367 2,80,550 2,943 2,45,259

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Key Business Highlights
 Acquired Nicotinell® and related brands in the Nicotine Replacement Therapy category in markets
outside the US from Haleon plc for a total consideration of GBP 500 million, with an upfront cash
payment of GBP 458 million and performance-based contingent payments of up to GBP 42 million,
payable in 2025 and 2026. The transaction is expected to close in early Q4 of calendar year 2024.
 Entered into a joint venture agreement with Nestlé India to bring science-backed nutritional portfolio
to more consumers in India. The JV is expected to become operational in Q2FY25.
 Partnered with Novartis Pharma LLC to distribute two of their leading anti-diabetes brands, Galvus®
and Galvus Met®, in the Russian retail market.
 Received exclusive rights from Ingenus Pharmaceuticals to commercialize Cyclophosphamide
Injection in the US.
 Collaborated with Alvotech for commercialization of their denosumab biosimilar candidate in the US
on an exclusive basis, as well as in Europe and UK.
 Launched drug-free migraine management device, Nerivio®, in Germany, Spain, UK and South Africa.
 Inaugurated a 70,000 sq.ft. state-of-the-art Biologics facility of Aurigene Pharmaceutical Services in
Genome Valley, Hyderabad, India. The process and analytical development laboratories are operational
while the commissioning of manufacturing capacity will be completed in 2024.

ESG & other Updates

 Only Indian Pharma Company which featured in the 2024 list of Global 500 Most Sustainable
Companies by Time Magazine and Statista.
 Named ‘Asia-Pacific Climate Leader’ by Financial Times for the second consecutive year in 2024,
scoring the highest amongst Indian Pharma peers.
 Won the 'Masters of Risk’ award in ‘Healthcare and Pharma' at the India Risk Management Awards.
 Improved FTSE Russel’s ESG Score from 3.9 to 4.2 out of 5.
 Received a Form 483 with two observations after the USFDA completed a routine GMP inspection at
two of our formulations manufacturing facilities in Duvvada, Visakhapatnam.
 Received a Form 483 with four observations after the USFDA completed a GMP inspection at our API
manufacturing facility in Srikakulam, Andhra Pradesh.

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Revenue Analysis
 Q1FY25 consolidated revenues at ₹ 76.7 billion, YoY growth of 14% and QoQ growth of 8%. The
growth was largely driven by growth in global generics revenues in North America as well as India.

Global Generics (GG)

 Q1FY25 revenues at ₹ 68.9 billion, YoY growth of 15% and QoQ growth of 13%. YoY growth was
primarily volume led, aided by new launches and integration of recently in-licensed vaccine portfolio
in India, partially offset by price erosion. Sequential growth was due to change in product mix partly
offset with adverse price erosion.

North America
 Q1FY25 revenues at ₹ 38.5 billion, YoY growth of 20% and QoQ growth of 18%. Our growth was
largely on account of increase in volumes of our base business, contribution from new launches, partly
offset by price erosion.
 During the quarter, we launched 3 new products in the U.S.
 During the quarter, we filed one new Abbreviated New Drug Application (ANDA) with the U.S. FDA. As
of June 30, 2024, 80 generic filings were approvals pending from the U.S. FDA. These comprise of 75
ANDAs and five New Drug Applications (NDAs) filed under the Section 505(b)(2) route of the US
Federal Food, Drug, and Cosmetic Act. Of the 75 ANDAs, 45 are Paragraph IV applications, and we
believe that 23 of these have the ‘First to File’ status.

Europe
 Q1FY25 revenues at ₹ 5.3 billion, YoY growth of 4% and sequential growth of 1%. Growth was
primarily on account of improvement in base business volumes, new product launches, partly offset by
price erosion.
o Germany at ₹ 2.8 billion, YoY growth of 14% and QoQ decline of 1%.
o UK at ₹ 1.6 billion, YoY decline of 7% and QoQ growth of 5%.
o Rest of Europe at ₹ 0.9 billion, YoY growth of 1% and flat QoQ.

 During the quarter, we launched 12 new products across various countries in the region.

India
 Q1FY25 revenues at ₹ 13.3 billion, YoY growth of 15% and QoQ growth of 18%. YoY growth was
mainly on account of new product launches including the recently in-licensed vaccine portfolio. As per
IQVIA, our IPM rank was at 10 for the quarter.
 During the quarter, we launched 13 new brands in the country, in addition to exclusive rights to
promote and distribute Sanofi's vaccine brands.

Emerging Markets
 Q1FY25 revenues at ₹ 11.9 billion, YoY growth of 3% and QoQ decline of 2%. YoY growth is
attributable to market share expansion and new product launches, partly offset by unfavorable forex
and price erosion.

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 o Revenues from Russia at ₹ 5.5 billion, YoY decline of 2% and QoQ growth of 11%.
- YoY decline was majorly due to unfavorable currency exchange rate movements, partially
offset by price increases and higher base business volumes.

- QoQ growth was driven by increase in base business volumes.

o Revenues from other Commonwealth of Independent States (CIS) countries and

Romania at ₹ 1.9 billion, decline of 2% YoY and 11% QoQ.

- YoY decline was primarily on account of decline in base business volumes, partly offset
by increase in prices.

- QoQ decline was driven by decline in base business volumes.

o Revenues from Rest of World (RoW) territories at ₹ 4.4 billion, growth of 11% YoY and a
decline of 11% QoQ.

- YoY growth was largely attributable to increase in volumes of base business, contribution
from new products, partly offset by price erosion.

- QoQ decline was primarily driven by decline in base business volumes and erosion.

 During the quarter, we launched 17 new products across various countries in the region.

Pharmaceutical Services and Active Ingredients (PSAI)

 Q1FY25 revenues at ₹ 7.7 billion, with a growth of 14% YoY and a decline of 7% QoQ. YoY growth was
mainly driven by improved volumes in base business, and contribution from new products, QoQ decline
was driven by decrease in volumes of certain existing products.
 During the quarter, we filed 11 Drug Master Files (DMFs) globally.

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Income Statement Highlights:

Gross Margin

 Q1FY25 at 60.4% (GG: 64.7%, PSAI: 23.1%), an increase of 170 basis points (bps) over previous year and
183 bps sequentially. The increase is on account of favourable product mix and overhead leverage,
partially offset by price erosion in generics markets.

Selling, General & Administrative (SG&A) Expenses

 Q1FY25 at ₹ 22.7 billion, YoY increase of 28% and 11% QoQ.

The increase is primarily on account of investment in new business initiatives, higher freight costs,
business integration costs, annual merit increases, and building commercial capabilities to enhance
operational efficiencies.

Research & Development (R&D) Expenses

 Q1FY25 at ₹ 6.2 billion. As % to Revenues – Q1FY25: 8.1% | Q1FY24: 7.4% | Q4FY24: 9.7%.
R&D investments is reflecting our biosimilars pipeline, development efforts across generics as well as
our novel oncology assets, which will support future growth.

Other Operating Income

 Q1FY25 at ₹ 0.5 billion as compared to ₹ 0.8 billion in Q1FY24.

Net Finance Income

 Q1FY25 at ₹0.8 billion compared to ₹ 0.8 billion in Q1FY24.

Profit before Tax

 Q1FY25 at ₹ 18.8 billion, a YoY growth of 2% and a QoQ growth of 18%.
As % to Revenues – Q1FY25: 24.5% | Q1FY24: 27.4% | Q4FY24: 22.6%.

Profit after Tax

 Q1FY25 at ₹ 13.9 billion, a YoY decline of 1% and a QoQ growth of 7%.
As % to Revenues – Q1FY25: 18.1% | Q1FY24: 20.8% | Q4FY24: 18.5%.
The Effective Tax Rate (ETR) for the quarter was 26.0% as compared to 24.0% in Q1FY24.

Diluted Earnings per Share (EPS)

 Q1FY25 is ₹ 83.5.

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Other Highlights:
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
 Q1FY25 at ₹ 21.6 billion, YoY growth of 1% and QoQ growth of 15%.
As % to Revenues – Q1FY25: 28.2% | Q1FY24: 31.7% | Q4FY24: 26.4%.

Others:
 Operating Working Capital: As on 30th June 2024 at ₹ 115.5 billion.

 Capital Expenditure: Q1FY25 at ₹ 4.9 billion.

 Free Cash Flow: Q1FY25 at ₹ 2.3 billion.

 Net Cash Surplus: As on 30th June 2024 at ₹ 67.3 billion

 Debt to Equity: As on 30th June 2024 is (0.23)

 RoCE: Q1FY25 annualized at 33%.

About key metrics and non-GAAP Financial Measures

This press release contains non-GAAP financial measures within the meaning of Regulation G and Item 10(e)
of Regulation S-K. Such non-GAAP financial measures are measures of our historical performance, financial
position or cash flows that are adjusted to exclude or include amounts from the most directly comparable
financial measure calculated and presented in accordance with IFRS.

The presentation of this financial information is not intended to be considered in isolation or as a substitute
for, or superior to, the financial information prepared and presented in accordance with IFRS. Our non-GAAP
financial measures are not based on any comprehensive set of accounting rules or principles. These measures
may be different from non-GAAP financial measures used by other companies, limiting their usefulness for
comparison purposes.

We believe these non-GAAP financial measures provide investors with useful supplemental information
about the financial performance of our business, enable comparison of financial results between periods
where certain items may vary independent of business performance, and allow for greater transparency with
respect to key metrics used by management in operating our business.

For more information on our non-GAAP financial measures and a reconciliation of GAAP to non-GAAP
measures, please refer to "Reconciliation of GAAP to Non-GAAP Results" table in this press release.

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All amounts in millions, except EPS

Reconciliation of GAAP Measures to Non-GAAP Measures

Operating Working Capital

As on
Particulars 30th Jun 2024
(₹)
Inventories 68,568
Trade Receivables 81,088
Less:
Trade Payables 34,109
Operating Working Capital 115,547

Free Cash Flow

Three months ended

Particulars 30th Jun 2024
(₹)
Net cash generated from operating activities 10,027
Less:
Taxes (1,531)
Investments in Property, Plant & Equipment, and Intangibles (6,224)
Free Cash Flow 2,272

Net Cash Surplus and Debt to Equity

As on
Particulars 30th Jun 2024
(₹)
Cash and Cash Equivalents 4,913
Investments 90,686
Short-term Borrowings (23,165)
Long-term Borrowings, Non-Current (6,229)
Less:
Restricted Cash Balance – Unclaimed Dividend 155
Lease liabilities (included in Long-term Borrowings, Non-Current) (2,429)
Equity Investments (Included in Investments) 1,174
Net Cash Surplus 67,305
Equity 2,94,628
Net Debt/Equity (0.23)

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Computation of Return on Capital Employed

As on 30th Jun
Particulars 2024
(₹)
Profit before Tax 18,821
Less:
Interest and Investment Income (Excluding forex gain/loss) 1,037
Earnings Before Interest and taxes [A] 17,784

Average Capital Employed [B] 215,327

Return on Capital Employed (A/B) (Ratio)
Annualised Return on Capital Employed (A/B) 33%

Computation of Capital Employed:

As on
Particulars 30thJun, 31st Mar,
2024 2024
Property Plant and Equipment 80,343 76,886
Intangibles 37,131 36,951
Goodwill 4,243 4,253
Investment in Equity Accounted Associates 4,236 4,196
Other Current Assets 24,483 22,560
Other Investments 973 1,059
Other Non-Current Assets 1,659 1,632
Inventories 68,568 63,552
Trade Receivables 81,088 80,298
Derivative Financial Instruments 91 (299)
Less:
Other Liabilities 40,379 46,866
Provisions 5,532 5,444
Trade payables 34,109 30,919
Operating Capital Employed 222,795 207,859
Average Capital Employed 215,327

Computation of EBITDA

Refer page no. 3.

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Earnings Call Details
The management of the Company will host an Earnings call to discuss the Company’s financial
performance and answer any questions from the participants.

Date: Saturday, July 27, 2024

Time: 16:30 pm IST | 07:00 am ET

Conference Joining Information

Option 1: Pre-register with the below link and join without waiting for the operator
https://services.choruscall.in/DiamondPassRegistration/register?confirmationNumber=9959258&link
SecurityString=3f1c80877a

Option 2: Join through below Dial-In Numbers

Universal Access Number: +91 22 6280 1219
+91 22 7115 8120
USA: 1 866 746 2133
International Toll-Free UK: 0 808 101 1573
Number: 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 3rd, 2024. For play
back dial in phone No: +91 22 7194 5757, and Playback Code is 57537.

Audio and Transcript: Audio and 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, NSEIFSC: DRREDDY) is a global pharmaceutical company
headquartered in Hyderabad, India. Established in 1984, we are committed to providing access to affordable and innovative medicines. Driven by our
purpose of ‘Good Health Can’t Wait’, we offer a portfolio of products and services including APIs, generics, branded generics, biosimilars and OTC. Our
major therapeutic areas of focus are gastrointestinal, cardiovascular, diabetology, oncology, pain management and dermatology. Our major markets
include – USA, India, Russia & CIS countries, China, Brazil, and Europe. As a company with a history of deep science that has led to several industry
firsts, we continue to plan and invest in businesses of the future. As an early adopter of sustainability and ESG actions, we released our first Sustainability
Report in 2004. Our current ESG goals aim to set the bar high in environmental stewardship; access and affordability for patients; diversity; and
governance.
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, and (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, 2024. The company assumes no obligation to update any information contained herein.” The company assumes no obligation to
update any information contained herein.

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