Dr. Reddy's Laboratories Ltd. Q2 FY2025 earnings call

• Completed acquisition of NRT portfolio and Nestlé India nutraceuticals JV. - Double-digit revenue growth in Q2, EBITDA margins over 28% (adjusting for one-time expenses higher). - Milestones: Venture with Nestle for nutraceuticals operationalized, NRT acquisition completed, regulatory approvals in US and Europe, R&D investment at 9.1% of sales. - Sustainability awards received, including KPMG India ESG Excellence Award.

Consolidated revenues for Q2 FY 2025 stood at INR 8,016 crores (US$957 million), growing 17% YOY and 4% QoQ. Global Generics had a gross margin of 63%, while PSAI had 30%. North America generics: revenues $445 million, YOY +16%, QoQ -4%. European generics: revenues $63 million, YOY +7% and QoQ +7%. Emerging markets generics: revenues INR 1,455 crores, YOY +20% and QoQ +23%. India business: revenues INR 1,397 crores, YOY +18% and QoQ +5%. PCI business: revenues $100 million, YOY +18% and QoQ -9%.

• SG&A expected to be in the range of 27.5% to 28% for full fiscal. - R&D spend expected 8.5% to 9% for full fiscal. - Normalized ETR around 25%. - Expect continued growth in various segments despite sequential fluctuations in some areas.

• Intangible impairment of INR 92 crores due to procurement constraints from contract manufacturers. - Currency fluctuations impacting emerging markets' revenue. - Regulatory approvals and market competition affecting product launch timelines and sales.

Q: On intangible impairment for generic lowering?

A: MV Narasimham says 100% of carrying value impaired as contract manufacturer unable to supply.