Dr. Reddy’s Laboratories (DRREDDY) Q2 24/25 earnings summary

Executive summary

• Achieved highest-ever quarterly sales and profit before tax, with consolidated revenues for Q2FY25 at ₹80.2 billion (INR 8,016 crores), up 17% YoY and 4% sequentially, driven by broad-based growth across global generics, especially in Emerging Markets, India, Europe, and PSAI segments.

• Completed the acquisition of Haleon's global Nicotine Replacement Therapy (NRT) portfolio (ex-US) for an upfront payment of GBP 458 million (₹51,407 million), with phased integration planned through early 2026.

• Operationalized the Nestlé JV for nutraceuticals in India, with a 51:49 shareholding and transfer of portfolio.

• Five-for-one stock split executed following board and shareholder approval, effective October 28, 2024.

• H1FY25 revenues reached ₹156.9 billion, a 15% YoY increase, with broad-based growth across all major markets.

Financial highlights

• Q2FY25 gross profit was ₹47.8 billion (59.6% margin), up 18% YoY; global generics margin 63%, PSAI 30%.

• Q2FY25 EBITDA was ₹22.8 billion (INR 2,280 crores), margin 28.4%, up 5% YoY and 6% sequentially.

• Q2FY25 profit before tax was ₹19.2 billion (INR 1,917 crores), PBT margin 23.9%; underlying PBT margin 25.7% excluding one-time items.

• Q2FY25 profit after tax before NCI was ₹13.4 billion (INR 1,342 crores), PAT margin 16.7%; underlying PAT margin 19%.

• Q2FY25 EPS was ₹15.04, restated for the stock split and after non-controlling interest.

Outlook and guidance

• SG&A expected at 27.5%-28% of sales for FY25; R&D spend to be 8.5%-9% of sales.

• Normalized effective tax rate projected around 25% for the fiscal year.

• Management expects continued growth in global generics, with focus on new product launches, market expansion, and integration of the NRT business and nutraceutical JV.