Dr. Reddy's (RDY) Q4 Earnings and Revenues Beat Estimates
Dr. Reddy's Laboratories Limited RDY reported fourth-quarter fiscal 2023 earnings of 70 cents per American Depositary Share, which beat the Zacks Consensus Estimate and our estimate of earnings of 57 cents. In the year-ago quarter, the company reported earnings of 6 cents.
In fourth-quarter fiscal 2023, revenues grew 16% year over year to $766 million, surpassing the Zacks Consensus Estimate of $763 million. Total revenues were also higher than our estimate of $763.4 million in the reported quarter. Year-over-year growth was driven by an improvement in both generics and Pharmaceutical Services & Active Ingredients (PSAI) businesses.
Shares of the company have gained 12.6% in the past year compared with the industry’s 16.6% rise.
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Quarter in Detail
Dr. Reddy’s reports revenues under three segments: Global Generics, PSAI and Proprietary Products and Others.
Global Generics revenues were INR 54.3 billion, up 18% year over year, in the fiscal fourth quarter. Growth was driven by new product launches and an increase in volumes of base business in North America, Europe and India markets, partially offset by a decline in revenues in Emerging Markets.
The company launched six new products (difluprednate, lurasidone tablets, lubiprostone capsules, sunitinib capsules, nelarabine injection and timolol gel) in North America.
As of Mar 31, cumulatively, 86 generic filings were pending approval from the FDA (81 abbreviated New Drug Applications and 5 new drug applications). Of these 86 pending filings, 45 are Para IVs and 18 have first-to-file status.
PSAI revenues were INR 7.8 billion, up 3% from the year-ago quarter, by new product launches and favorable forex movement, partly offset by price erosion and a reduction in base business volumes.
Revenues in the other segment came in at INR 924 million, up 33% year over year.
Research and development expenses were up 24% year over year to $65 million. The company is focused on building a global pipeline of new products across its markets.
Selling, general and administrative expenses were $219 million, up 15% year over year, primarily owing to investments in business growth and the adverse impact of forex rates.
Full-Year Fiscal 2023 Results
For the full year, Dr. Reddy’s earnings per share of $3.30 missed the Zacks Consensus Estimate of $3.31 per share but beat our estimate of $3.20 per share. In the previous year, the company reported earnings of $1.72 per share.
Revenues were clocked at $2.99 billion for fiscal 2023, up 15% year over year, which narrowly missed the Zacks Consensus Estimate of $3.00 billion as well as our estimate of $3.02 billion. In the previous year, the company generated revenues worth $2.61 billion. The growth was mainly driven by new product launches, partially offset by price erosion.
Dr. Reddy's Laboratories Ltd Price, Consensus and EPS Surprise
Dr. Reddy's Laboratories Ltd price-consensus-eps-surprise-chart | Dr. Reddy's Laboratories Ltd Quote
Zacks Rank and Stocks to Consider
Dr. Reddy’s currently has a Zacks Rank #3 (Hold)
Some better-ranked stocks in the biotech sector are Aziyo Biologics AZYO, Immunogen IMGN and Better Therapeutics BTTX, all carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 90 days, the Zacks Consensus Estimate for Aziyo Biologics’ 2023 loss per share has narrowed from $2.01 to $1.95. In the past year, shares of Aziyo Biologics have fallen by 57.3%.
AZYO beat estimates in two of the trailing four reported quarters, missing the mark on two occasions and reported a positive earnings surprise of 42.4% in the quarter ended Dec 2022.
In the past 90 days, the Zacks Consensus Estimate for ImmunoGen’s 2023 loss per share has narrowed from 91 cents to 56 cents. In the past year, shares of ImmunoGen have rallied by 254.9%.
IMGN beat estimates in two of the trailing four quarters, missing the mark on the other two occasions, delivering an average earnings surprise of 7.09%.
In the past 90 days, the Zacks Consensus Estimate for Better Therapeutics’ 2023 loss per share has narrowed from $3.54 to $3.23. In the past year, shares of Better Therapeutics have decreased by 52.8%.
BTTX beat estimates in three out of the trailing four quarters, missing the mark on one occasion, delivering an average earnings surprise of 2.04%.
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