Dr. Reddy's Q4 & Full Year FY25 Financial Results

Dr. Reddy's Laboratories Ltd. (BSE: 500124, NSE: DRREDDY, NYSE:RDY, NSEIFSC: DRREDDY) today announced its consolidated financial results for the quarter and year ended March 31, 2025. The information mentioned in this release is based on consolidated financial statements under International Financial Reporting Standards (IFRS).

Commenting on the results, Co-Chairman & MD, G V Prasad said: "We achieved double-digit growth across our businesses, driven by successful product launches, increased revenues from key products in the U.S. and the integration of the acquired NRT business. We will continue to strengthen and grow our core businesses through portfolio management and operational excellence, while pursuing strategic partnerships and inorganic growth opportunities."

Key Business Highlights for Q4FY25

• Partnered with Shanghai Henlius Biotech, Inc. to commercialize HLX15 (daratumumab biosimilar) in the U.S. and Europe
• Partnered with Bio-Thera Solutions for BAT2206 (ustekinumab biosimilar) for Southeast Asia and Colombia as well as BAT2506 (golimumab biosimilar) for Southeast Asia
• Received Biologics License Application (BLA) acceptance for AVT03 (denosumab biosimilar) developed by our partner, Alvotech for the U.S. market
• Received ‘Marketing Authorisation' for rituximab biosimilar from UK MHRA
• Participated in India's ‘Jan Aushadi' program with one of our products to provide accessible generic medicines to the public

ESG Highlights for Q4FY25

• Recognized in the ‘Leadership category' on the Indian Corporate Governance Scorecard 2024 assessment undertaken by Institutional Investor Advisory Services (IiAS)
• Achieved an improved ‘EcoVadis' score of 73, placing us among the top 15% of companies assessed globally
• Won the ‘Climate Action Program 2.0° Award' in the highest 'Resilient' category in the Light Manufacturing Sector.
• Received ‘Excellence in Rural Health Initiative' award from Economic Times

Other Updates for Q4FY25

• Received the Establishment Inspection Report (EIR) following a routine GMP inspection by the U.S. FDA at our API manufacturing facility (CTO-2) in Bollaram, Hyderabad. The inspection was classified as Voluntary Action Initiated (VAI).
• Completed the divestment of our manufacturing facility in Shreveport, Louisiana, U.S., to Jaguar Labs Holdings, LLC.

Revenue Analysis

• Q4 FY25 consolidated revenues stood at ₹85.1 billion, YoY growth of 20% and QoQ growth of 2%. Excluding the NRT business, underlying growth was 12% YoY and 2% QoQ.
  
  
  
  FY25 consolidated revenues reached ₹325.5 billion, YoY growth of 17%. Underlying revenue growth, excluding NRT business was 12% YoY.
  
  
  
  The performance was driven by contributions from the acquired NRT business, complemented by steady growth across our core businesses - Global Generics and Pharmaceutical Services & Active Ingredients (PSAI).

Global Generics (GG)

• Q4FY25 revenues at ₹75.4 billion, YoY growth of 23% and QoQ growth of 2%. Underlying growth excluding NRT business is 13% YoY and 2% QoQ.
  
  
  
  FY25 revenues at ₹289.6 billion, a YoY growth of 18%. Underlying YoY growth excluding NRT business is 13%.
  
  
  
  Growth was primarily driven by contributions from the acquired NRT business, higher sales volumes, and new product launches, partially offset by price erosion in North America and Europe.

North America

• Q4FY25 revenues at ₹35.6 billion, YoY growth of 9% and QoQ growth of 5%.
  
  
  
  FY25 revenues at ₹145.2 billion, YoY growth of 12%.
  
  
  
  The YoY growth was primarily driven by new product launches, increased volumes of select key products, partially offset by price erosion in certain products.
  
  

• During the quarter, we launched seven new products in the U.S. A total of 18 products were launched during the fiscal year.
• We filed ten new Abbreviated New Drug Applications (ANDAs) with the USFDA during the fiscal year. As of March 31, 2025, 76 generic filings were pending approval from the USFDA. These comprise of 73 ANDAs and three New Drug Applications (NDAs) filed under Section 505(b)(2) route of the US Federal Food, Drug, and Cosmetic Act. Of the 73 ANDAs, 44 are Paragraph IV applications, and we believe that 20 of these have a ‘First to File' status.

Europe

• Q4FY25 revenues at ₹12.8 billion, YoY growth of 145% and QoQ growth of 5%. This includes revenues from the acquired NRT business. Underlying growth excluding NRT business is 30% YoY and 12% QoQ.
  • NRT at ₹6.0 billion, QoQ decline of 1%
  • Germany at ₹3.6 billion, YoY growth of 26% and QoQ growth of 7%
  • UK at ₹2.2 billion, YoY growth of 43% and QoQ growth of 14%
  • Rest of Europe at ₹1.1 billion, YoY growth of 20% and QoQ growth of 27%
• FY25 revenues at ₹35.9 billion, YoY growth of 75%. Underlying YoY growth excluding NRT business is 16%.
  • NRT at ₹12.0 billion
  • Germany at ₹12.9 billion, YoY growth of 21%
  • UK at ₹7.3 billion, YoY growth of 15%
  • Rest of Europe at ₹3.7 billion, YoY growth of 4%
• The growth in Europe was primarily on account of revenues from the acquired NRT business, momentum in the base business volumes and new product launches, partly offset by price erosion.
• During the quarter, we launched 10 new products in the region, taking the full year total to 39.

India

• Q4FY25 revenues at ₹13.0 billion, YoY growth of 16% and QoQ decline of 3%.
• FY25 revenues at ₹53.7 billion, YoY growth of 16%.
  
  
  
  Growth was driven by revenues from the vaccine portfolio in-licensed from Sanofi India, successful new product launches and price increases, partially offset by lower volumes.
  
  
• As per IQVIA, our IPM rank was maintained at 10. The total no. of new product launches in India is 23 for the full fiscal.

Emerging Markets

• Q4FY25 revenues at ₹14.0 billion, YoY growth of 16% and QoQ decline of 3%. YoY growth is largely attributable to new product launches across various countries and higher volumes for existing products. QoQ decline is largely due to lower volumes.
  
  
  
  -Revenues from Russia at ₹6.5 billion, YoY growth of 31% and QoQ decline of 7%. YoY growth was largely due to new product launches and higher volumes. QoQ decline was due to lower sales volumes and change in product mix.
  
  
  
  -Revenues from other Commonwealth of Independent States (CIS) countries and Romania at ₹2.4 billion, YoY growth of 13% and QoQ growth of 1%. YoY growth was largely on account of higher base business volumes.
  
  
  
  -Revenues from Rest of World (RoW) territories at ₹5.0 billion, growth of 1% YoY and QoQ. Contribution from new product launches was partially offset by lower base business volumes and price erosion in certain countries.
  
  
• FY25 revenues at ₹54.8 billion, YoY growth of 13%. The growth is mainly attributable to higher base business volumes, new launches, partly offset by adverse forex.
  
  
  
  -Revenues from Russia at ₹26.0 billion, YoY growth of 16%. The growth was largely on account of improved base business volumes, revenues from new launches and price increases in certain brands.
  
  
  
  -Revenues from other CIS countries and Romania at ₹8.9 billion, YoY growth of 3%.
  
  
  
  -Revenues from RoW territories at ₹19.9 billion, YoY growth of 12%. The growth is largely due to higher base business volumes and new product launches, partially offset by price erosion.
  
  
  
  During Q4FY25, we launched 26 new products across countries, taking the annual total to 85.

Pharmaceutical Services and Active Ingredients (PSAI)

• Q4FY25 revenues at ₹9.6 billion, growth of 16% YoY and QoQ.
• FY25 revenues at ₹33.8 billion, with a growth of 14% YoY.
  
  
  
  Growth was due to increase in API volumes, new launches of API products, partially offset by lower prices. This was further augmented by growth in the pharmaceutical services business.
  
  
  
  During the quarter, we filed 52 Drug Master Files (DMFs) globally, taking the annual count to 111.

Income Statement Highlights:

Gross Margin

• Q4FY25 at 55.6% (GG: 59.3%, PSAI: 26.3%), a YoY decline of 300 basis points (bps) and a QoQ decline of 312 bps.
  
  
  
  YoY decline was attributed to higher price erosion in generics, lower manufacturing overhead leverage and milestone income accrued in the previous year. The sequential decline was mainly due to lower manufacturing overhead leverage and higher milestone income recorded in the previous quarter.
  
  
  
  FY25 at 58.5% (GG: 62.0%, PSAI: 27.1%), a YoY decrease of 11 bps, in line with previous year.

Selling, General & Administrative (SG&A) Expenses

• Q4FY25 at ₹24.1 billion, YoY increase of 17% and flat QoQ.
  
  
  
  FY25 at ₹93.9 billion, YoY increase of 22%.
  
  
  
  The increase was largely driven by higher investments in sales and marketing to strengthen existing brands and support new business initiatives, including the expansion of our consumer healthcare portfolio. It also reflects higher personnel costs from our growth initiatives and elevated freight rates.

Research & Development (R&D) Expenses

• Q4FY25 at ₹7.3 billion. As % to Revenues – Q4FY25: 8.5% | Q4FY24: 9.7% | Q3FY25: 8.0%.
  
  FY25 at ₹27.4 billion. As % to Revenues – FY25: 8.4% | FY24: 8.2%.
  
  
  
  R&D investments continued to support our pipeline across small molecules, biosimilars, complex generics, including peptides, and novel oncology assets.

Impairment on Non-Current Assets

• Q4FY25 loss at ₹0.8 billion compared to a reversal of ₹0.2 billion in Q4FY24. The impairment charge relates to certain product-related intangibles from the Mayne portfolio and other assets within our global generics business in India and Europe, impacted by adverse market conditions.
  
  
  
  FY25 loss at ₹1.7 billion as compared to ₹0.003 billion in FY24. The impairment of intangibles pertains to product-related assets in India, Europe, and North America, driven by procurement constraints and challenging market conditions.

Net Finance Income/Expense

• Q4FY25 income at ₹2.4 billion compared to expense of ₹1.0 billion in Q4FY24.
  
  
  
  FY25 income at ₹4.7 billion as compared to ₹4.0 billion in FY24. The increase was largely on account of higher foreign currency exchange gain.

Profit before Tax

• Q4FY25 at ₹20.1 billion, a YoY growth of 25% and a QoQ growth of 7%.
  
  
  
  As % to Revenues – Q4FY25: 23.6% | Q4FY24: 22.6% | Q3FY25: 22.4%.
  
  
  
  FY25 at ₹76.8 billion, a YoY growth of 7%.
  
  
  
  As % to Revenues –FY25: 23.6% | FY24: 25.7%.
  
  
  
  Profit before tax (‘PBT') includes ₹888 Mn in Q4 and ₹1,011 Mn in FY25 from the recently acquired NRT business.

Income Tax

• Q4FY25 at ₹4.2 billion. As % to PBT – Q4FY25: 20.8% | Q4FY24: 18.4% | Q3FY25: 25.1%.
  
  
  
  The effective tax rate (‘ETR') for the quarter is lower due to:
  
  
  
  - Reversal of previously recognized tax provision pertaining to prior years.
  
  
  
  - Following the sale of membership interest in one of the group entities, the cumulative foreign exchange gain has been transferred from the foreign currency translation reserve (‘FCTR') to the income statement. Such FCTR is not subject to taxation.
  
  
  
  FY25 at ₹19.5 billion. As % to PBT – FY25: 25.4% | FY24: 22.5%.
  
  The ETR for the full year is higher, primarily due to the reversal of a previously recognized deferred tax asset related to land indexation and recognition of a previously unrecognized deferred tax asset on operating tax losses.

Profit attributable to Equity Holders of Parent Company

• Q4FY25 at ₹15.9 billion, a YoY growth of 22% and a QoQ growth of 13%.
  
  As % to Revenues – Q4FY25: 18.7% | Q4FY24: 18.5% | Q3FY25: 16.9%.
  
  
  
  FY25 at ₹56.5 billion, a YoY growth of 2%.
  
  As % to Revenues – FY25: 17.4% | FY24: 19.9%.

Diluted Earnings per Share (EPS)

• Q4FY25 is ₹19.11. FY25 is ₹67.78.

Other Financial Highlights:

EBITDA

• Q4FY25 at ₹24.8 billion, YoY growth of 32% and QoQ growth of 8%.
  
  
  
  As % to Revenues – Q4FY25: 29.1% | Q4FY24: 26.4% | Q3FY25: 27.5%.
  
  

• FY25 at ₹92.1 billion, a YoY growth of 11%.
  
  
  
  As % to Revenues – FY25: 28.3% | FY24: 29.7%.

Others:

• Operating Working Capital: As on 31^st March 2025 at ₹125.9 billion.
• Capital Expenditure: Q4FY25 at ₹7.7 billion. FY25 at ₹27.0 billion.
• Free Cash Flow: Q4FY25 at ₹11.1 billion. FY25 at ₹13.3 billion.
• Net Cash Surplus: As on 31^st March 2025 at ₹24.5 billion
• Net Debt to Equity: As on 31^st March 2025 is (0.07)
• Return on Capital Employed (RoCE): FY25 at 27.7%

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.

All amounts in millions, except EPS

Reconciliation of GAAP Measures to Non-GAAP Measures

Operating Working Capital

Cash Flow

Net Cash Surplus and Debt to Equity

Computation of RoCE

Computation of Capital Employed:

Computation of EBITDA

Refer page no. 3 & 4.

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: May 9, 2025

Time: 19:30 pm IST | 10:00 am ET

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 will be available after the earnings call, till May 16^th, 2025. For play back, dial in phone No: +91 22 7194 5757, and playback code is 59320#.

Audio Link and Transcript 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 and quarterly financial statements filed in Form 6-K with the US SEC for the quarter ended June 30, 2024, September 30, 2024, December 31, 2024 and our other filings with US SEC. The company assumes no obligation to update any information contained herein.

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INVESTOR RELATIONS

RICHA PERIWAL [email protected]

AISHWARYA SITHARAM [email protected]

MEDIA RELATIONS

PRIYA K

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