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Dr. Reddy's (RDY) Q3 Earnings Decline Y/Y, Sales Increase

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Dr. Reddy's Laboratories Ltd. RDY reported third-quarter fiscal 2021 earnings of 57 cents (excluding impairment charges) per American Depositary Share ("ADS") compared with 62 cents in the year-ago quarter.

However, revenues grew 12% year over year to $675 million.

During the quarter, the company took an additional impairment charge of $82 million on the intangibles pertaining to other products. In January 2021, there was an additional generic launch for the product,Nuvaring, which led to a considerable erosion in the value of this product for Dr. Reddy’s and thus, the company took an impairment charge.

In the past year, shares of the company have gained 39% compared with the industry’s growth of 14.8%.

Quarter in Detail

Dr. Reddy’s reported revenues under three segments — Global Generics, Pharmaceutical Services & Active Ingredients (“PSAI”), and Proprietary Products and Others.

Global Generics revenues were INR 40.8 billion, up 13% year over year, in the fiscal third quarter. Growth was led by contributions from new product launches and integration of the acquired business from Wockhardt in India.

The company launched fourproducts in North America, including Cinacalcet tablets, Sapropterin Dihydrochloride tablets and Succinylcholine Chloride injection in the United States and Daptomycin injection in Canada. The company also re-launched aproduct — OTC Famotidine— in the United States.

PSAI revenues were INR 7.1 billion, up 1% from the year-ago quarter.

Revenues in the Proprietary Products segment came in at INR 1.5billion, up 53% year over year.

Research and development expenses were up 33.7% year over year to $56 million.The company is also undertaking the development of a few projects pertaining to COVID-related drugs.

Selling, general and administrative expenses were $197 million, up14% year over yeardue to certain one-off expenses last year, which were partly offset by incremental costs post the integration of the acquired divisions from Wockhardt, in 2020.

As of Dec 31, cumulatively, 89 generic filings are pending approval fromthe FDA (87 abbreviated New Drug Applications [ANDAs] and 2 two new drug applications). Of these 89 ANDAs, 48 are Para IVs and 24 have first-to-file status.

Zacks Rank & Other Key Picks

Dr. Reddy’s currently has a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the healthcare sector include Acorda Therapeutics Inc. ACOR, Anavex Life Sciences Corp. AVXL and Alexion Pharmaceuticals Inc. ALXN. While Acorda sportsa Zacks Rank #1 (Strong Buy), Anavex and Alexion carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Acorda’s loss per share estimates have narrowed from $9.66 to $8.48 for 2020 and from $9.60 to $7.33 for 2021 over the past 60 days.

Anavex’s loss per share estimates have narrowed from 48 cents to 46 cents for 2021 over the past 60 days. Shares of the company have increased 103% in the past year.

Alexion’s earnings per share estimates have increased from $12.04 to $12.06 for 2020 over the past 60 days. Shares of the company have increased 52% in the past year.

Dr. Reddys Laboratories Ltd Price, Consensus and EPS Surprise

Dr. Reddys Laboratories Ltd Price, Consensus and EPS Surprise
Dr. Reddys Laboratories Ltd Price, Consensus and EPS Surprise

Dr. Reddys Laboratories Ltd price-consensus-eps-surprise-chart | Dr. Reddys Laboratories Ltd Quote

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