FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934

May 2011

Commission File Number — 1-15182

DR. REDDY’S LABORATORIES LIMITED

(Name of Registrant)

7-1-27, Ameerpet
Hyderabad, Andhra Pradesh 500 016, India
+91-40-23731946

(Address of Principal Executive Offices)

Indicate by check mark whether registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F þ          Form 40-F o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o          No þ

If “Yes” is marked, indicate below the file number assigned to registrant in connection with Rule 12g3-2(b): ________

Not applicable.

 

 

Table of Contents

(1) Press Release, “Dr. Reddy’s Q4 FY11 & FY11 Financial Results,” May 13, 2011.

Press Release
		Dr. Reddy’s Laboratories Ltd.
		7-1-27 Ameerpet
		Hyderabad 500 016 India
		Tel: 91 40 373 1946
		Fax: 91 40 373 1955
		www.drreddys.com

Dr. Reddy’s Q4 FY11 & FY11 Financial Results

Q4 FY11 Revenues at Rs. 20.2 billion ($453 million), YoY growth of 23%

Q4 FY11 Adjusted* Profit after Tax at Rs. 3.1 billion ($69 million), YoY growth of 57%

FY11 Revenues at Rs. 74.7 billion ($1.7 billion), YoY growth of 6%

FY11 Adjusted* Profit after Tax at Rs. 10.8 billion ($242 million), YoY growth of 17%

Hyderabad, India, May 13, 2011: Dr. Reddy’s Laboratories Ltd. (NYSE: RDY) today announced its unaudited consolidated financial results for the quarter and full year ended March 31, 2011 under International Financial Reporting Standards (IFRS).

Key Highlights

•

Consolidated revenues are at Rs. 74.7 billion ($1.7 billion) in FY11 versus Rs. 70.3 billion ($1.6 billion) in FY10, year-on-year growth of 6%. Good and sustained growth across all key formulation markets in FY11.

	•		North America revenue growth of 18% in dollar terms and 11 new product launches. Sequential growth of 23% in Q4 FY11 over Q3 FY11 demonstrates the fifth consecutive quarter of sequential growth.
	•		Russia revenue growth of 29% in dollar terms, on the back of volume growth and OTC initiatives.
	•		India revenue growth of 15%, with sustained growth of key brands and new products introduction.
	•		Germany revenue declines 17% in Euro terms, however significant improvement in profitability.

•

Adjusted* EBITDA of Rs. 16.4 billion ($369 million) in FY11, is at 22% of revenues with year-on-year growth of 4%. Adjusted* EBITDA for Q4 FY11 at Rs. 4.7 billion ($106 million), year-on-year growth of 34%.

•

Adjusted* Profit after Tax for FY11 is at Rs. 10.8 billion ($242 million), is at 14% of revenues with year-on-year growth of 17%. Adjusted* PAT for Q4 FY11 at Rs.3.1 billion ($69 million) year-on-year growth of 57%.

•

During the year, the company launched 135 new generic products, filed 107 new product registrations and filed 56 DMFs globally.

•

During the year, the company forayed into many strategic initiatives. Some of the key ones being:

	•		Acquisition of a penicillin facility to fill our portfolio gap in the anti-bacterial segment in the US.
	•		Collaboration with Valeant Pharma to market Cloderm® Cream in the dermatology space in the US.
	•		Settlement of the ongoing litigation on esomeprazole with Astra Zeneca.

•

The Board of Directors of the Company have recommended a final dividend of Rs. 11.25 (225%) per equity share of Rs. 5/- face value, subject to the approval of shareholders at the ensuing Annual General Meeting.

All figures in millions, except EPS		All dollar figures based on convenience translation rate of 1USD = Rs 44.54

Dr. Reddy’s Laboratories Limited and Subsidiaries

Unaudited Consolidated Income Statement

		FY11												FY10
Particulars		($)				(Rs.)				%				($)				(Rs.)				%				Growth %
Revenue			1,677				74,693				100				1,578				70,277				100				6
Cost of revenues			773				34,430				46				762				33,937				48				1
Gross profit			904				40,263				54				816				36,340				52				11
Operating Expenses
Selling, general & administrative expenses			532				23,690				32				505				22,505				32				5
Research and development expenses			114				5,060				7				85				3,793				5				33
Write down of intangible assets			—				—				0				78				3,456				5				—
Write down of goodwill			—				—				0				116				5,147				7				—
Other operating expenses / (income)			(25	)			(1,115	)			(1	)			(13	)			(569	)			(1	)			96
Total Operating Expenses			620				27,635				37				771				34,332				49				(20	)
Results from operating activities			284				12,628				17				45				2,008				3				529
Finance expenses / (income)			4				189				0				0				3				0				—
Share of profit/(loss) of equity accounted investees			0				3				0				1				48				0				(94	)
Profit before tax			279				12,443				17				46				2,053				3				506
Income tax (expense) / income			(31	)			(1,403	)			(2	)			(22	)			(985	)			(1	)			42
Profit after tax			248				11,040				15				24				1,068				2				934
Diluted EPS			1.5				65.0								0.1				6.3

FY11 Adjusted PAT Reconciliation		(in millions)

		FY11								FY10
Particulars		($)				(Rs.)				($)				(Rs.)
PAT			248				11,040				24				1,068
Adjustments:
Write down of Intangible assets			—				—				78				3,456
Write down of Goodwill			—				—				116				5,147
betapharm restructuring costs			—				—				20				905
Profit on sale of land (included in Other Income)			(7	)			(292	)			—				—
Negative goodwill (benefit included in Other Income)			(2	)			(73	)			—				—
Tax effect on above			2				88				(31	)			(1,362	)
Adjusted PAT			242				10,762				207				9,214

Segmental Analysis

Global Generics

Revenues from Global Generics segment are at Rs. 53.3 billion ($1.2 billion) in FY11 registering growth of 10% over previous year, led by performance in North America and Emerging Markets. Revenues for Q4 FY11 are at Rs. 14.2 billion ($318 million) registering growth of 27% over previous year.

•

Revenues from North America at Rs. 19.0 billion ($426 million) in FY11 versus Rs. 16.8 billion ($378 million) in FY10. Dollar growth of 18% led by new product launches in the last twelve months.

	•		11 new products launched during the year. Some of the key launches being tacrolimus, lansoprazole and fexofenadine pseudoephedrine 180/240 mg.
	•		25 products of our prescription portfolio feature among the Top 3 ranks in market shares. (Source: IMS Sales Volumes March 2011)
	•		During the year 20 ANDAs were filed. The cumulative ANDA filings as of 31st March, 2011 are 170. A total of 75 ANDAs are pending for approval with the USFDA of which 37 are Para IVs and 10 are FTFs.
	•		Revenues for Q4 FY11 at Rs. 5.9 billion ($133 million), growth of 68% largely driven by the new product launch of fexofenadine pseudoephedrine 180/240 mg.

•

Revenues in Russia & Other CIS markets at Rs. 10.9 billion ($244 million) in FY11 versus Rs. 9.1 billion ($205 million) in FY10, year-on-year growth of 19%.

•

Revenues in Russia at Rs. 8.9 billion ($201 million) in FY11 versus Rs. 7.2 billion ($162 million) in FY10, year-on-year growth of 24%, largely driven by volume growth across existing business and new products contribution.

	•		Significant growth in OTC portfolio representing 25% of overall portfolio.
	•		Dr. Reddy’s year-on-year secondary prescription sales growth stands at 19% versus industry’s growth of 7.5%. (Source: Pharmexpert MAT March 2011)

•

Revenues in Other CIS markets increase by 2% to Rs. 1.9 billion ($43 million) in FY11 versus Rs. 1.9 billion ($42 million) in FY10.

•

Revenues in Russia & Other CIS markets for Q4 FY11 at Rs. 2.7 billion ($60 million) and recorded year-on-year growth of 26%.

•

Revenues in India at Rs. 11.7 billion ($262 million) in FY11 versus Rs. 10.2 billion ($228 million) in FY10, increase of 15% led by volume growth of 11% and contribution from new product launches of 4%.

	•		48 new products launched during the year including one biosimilar, darbepoetin alfa under the brand Cresp.
	•		Strong growth in biosimilars portfolio representing 5% of overall sales.
	•		Revenues for Q4 FY11 at Rs. 2.8 billion ($62 million) recorded a growth of 5%.

•

Revenues from Europe at Rs. 8.4 billion ($189 million) in FY11 versus Rs. 9.6 billion ($216 million) in FY10, decline of 13%.

•

Revenues from Germany decrease by 25% to Rs. 5.5 billion ($123 million) in FY11.

•

Decline of 17% in Euro currency terms largely due to the tender based pricing pressures.

•

Restructuring of betapharm helped significantly in rationalizing the cost structures.

•

Revenues from Rest of Europe grew by 27% to Rs. 3.0 billion ($67 million) in FY11 largely led by growth in out-licensing business.

•

Revenues from Europe for Q4 FY11 at Rs. 2.0 billion ($45 million) recorded decline of 5%.

Pharmaceutical Services and Active Ingredients (PSAI)

Revenues from PSAI are at Rs. 19.6 billion ($441 million) in FY 11 versus Rs. 20.4 billion ($458 million) in FY10 decline of 4% in rupees terms.

•

Modest growth in Active Ingredients business led by new product launches offset by decline in Pharmaceutical Services due to lower customer orders.

•

During the year, 56 DMFs were filed globally, with 19 in US, 7 in Europe and 30 in rest of the markets. The cumulative DMF filings as of Mar 11 are 486.

•

Revenues from PSAI for Q4 FY11 are at Rs. 5.6 billion ($125 million), growth of 13% over previous year largely led by Active Ingredients business.

Income Statement Highlights:

•

Gross profit at Rs. 40.3 billion ($904 million) in FY11, margin of 54% to revenue versus gross profit of Rs. 36.3 billion ($816 million) in FY10, margin of 52% to revenues. This improved margin is largely due to a favorable mix of high margin new products in North America Generics in FY11.

•

Selling, General & Administration (SG&A) expenses including amortization at Rs. 23.7 billion ($532 million) increased by 5% over FY10. This increase was largely due to higher legal expenses in the US, OTC related marketing spend in Russia & CIS and new field force related expenditure in India. This increase is partly offset by the benefit of lower employee related costs in Germany on account of restructuring of betapharm done in FY10.

•

Other Operating Income of Rs. 1,115 million ($25 million) in FY11 versus Rs. 569 million ($13 million) in FY10. The increase in net other income was primarily on account of profit from sale of land of Rs. 292 million. A benefit of Rs. 73 million ($1.6 million) was recorded towards negative goodwill as per IFRS Purchase Price Allocation accounting on account of acquisition.

•

R&D expenses at Rs. 5.1 billion ($114 million) in FY11, increase of 33% over FY10. The increase in R&D expenses is in line with the planned scale up in our R&D activities across all business segments.

•

Finance costs are at Rs. 189 million ($4 million) versus Rs. 3 million in FY10. The change is on account of:

•

Net forex loss of Rs. 57 million ($1 million) versus net forex gain of Rs. 72 million ($2 million) in FY10.

•

Net interest expense of Rs. 199 million ($4 million) in FY11 versus Rs. 123 million ($3 million) in FY10.

•

Profit on sale of investments of Rs. 68 million ($2 million) in FY11 versus Rs. 48 million ($1 million) in FY10.

•

Adjusted* EBITDA of Rs. 16.4 billion ($369 million) in FY11, is at 22% of revenues with year-on-year growth of 4%.

•

Adjusted* EBITDA for Q4 FY11 at Rs. 4.7 billion ($106 million), year-on-year growth of 34%.

•

Adjusted* Profit after Tax for FY11 is at Rs. 10.8 billion ($242 million), is at 14% of revenues with year-on-year growth of 17%.

•

Adjusted* Profit after Tax for Q4 FY11 at Rs.3.1 billion ($69 million), year-on-year growth of 57%.

•

The effective tax rate is at 11% in FY11 versus 20% in FY10. This decline in tax rate reflects the benefit of higher weighted deduction on R&D expenditure granted in 2010 Union Budget of India.

•

Capital expenditure for FY11 is at Rs. 8.8 billion ($198 million).

Appendix 1: Key Balance Sheet Items

(in millions)                    

		As on 31st Mar 11								As on 31st Mar 10
Particulars		($)				(Rs.)				($)				(Rs.)
Cash and cash equivalents			129				5,729				148				6,584
Trade receivables			395				17,615				269				11,960
Inventories			361				16,059				300				13,371
Property, plant and equipment			666				29,642				504				22,459
Goodwill and Other Intangible assets			342				15,246				314				13,973
Loans and borrowings (current & non current) (a)			529				23,572				330				14,695
Trade payables			190				8,480				209				9,322
Equity			1,033				45,990				964				42,915

Appendix 2: FY11 Revenue Mix by Segment

(in millions)                    

		FY11												FY10
		($)				(Rs.)				%				($)				(Rs.)				%				Growth %
Global Generics			1,198				53,340				71				1,091				48,606				69				10
North America			426				18,996								378				16,817								13
Europe			189				8,431								216				9,638								(13	)
India			262				11,690								228				10,158								15
Russia & Other CIS			244				10,858								205				9,119								19
RoW			76				3,365								65				2,873								17
PSAI			441				19,648				26				458				20,404				29				(4	)
North America			71				3,170								82				3,673								(14	)
Europe			158				7,020								149				6,652								6
India			59				2,619								59				2,646								(1	)
RoW			154				6,838								167				7,433								(8	)
Proprietary Products & Others			38				1,705				3				28				1,267				2				35
Total			1,677				74,693				100				1,578				70,277				100				6

Appendix 3: FY11 Revenue Mix by Geography

(in millions)                    

		FY11												FY10
		($)				(Rs.)				%				($)				(Rs.)				%				Growth %
North America			522				23,260				31				478				21,269				30				9
Europe			361				16,058				21				377				16,774				24				(4	)
India			321				14,314				19				288				12,808				18				12
Russia & Other CIS			244				10,858				15				205				9,119				13				19
Others			229				10,203				14				231				10,306				15				(1	)
Total			1,677				74,693				100				1,578				70,277				100				6

All figures in millions, except EPS		All dollar figures based on convenience translation rate of 1USD = Rs 44.54

Appendix 4: Q4 FY11 Consolidated Income Statement

		Q4 FY11												Q4 FY10
Particulars		($)				(Rs.)				%				($)				(Rs.)				%				Growth %
Revenue			453				20,173				100				369				16,424				100				23
Cost of revenues			207				9,224				46				175				7,784				47				19
Gross profit			246				10,949				54				194				8,640				53				27
Operating Expenses
Selling, general & administrative expenses			138				6,125				30				130				5,811				35				5
Research and development expenses			33				1,491				7				21				953				6				56
Other operating expenses / (income)			(11	)			(512	)			(3	)			(5	)			(238	)			(1	)			115
Total Operating Expenses			160				7,105				35				147				6,526				40				9
Results from operating activities			86				3,844				19				47				2,114				13				82
Finance expenses / (income)			(2	)			(72	)			(0	)			1				26				0				—
Share of profit/(loss) of equity accounted investees			(0	)			(4	)			(0	)			0				20				0				—
Profit before tax			88				3,912				19				47				2,108				13				86
Income tax (expense) / income			(13	)			(567	)			(3	)			(10	)			(441	)			(3	)			29
Profit after tax			75				3,345				17				37				1,667				10				101
Diluted EPS			0.4				19.7								0.2				9.8

Q4 FY11 Adjusted PAT Reconciliation		(in millions)

		Q4 FY11								Q4 FY10
Particulars		($)				(Rs.)				($)				(Rs.)
PAT			75				3,345				37				1,667
Adjustments:
betapharm restructuring costs			—				—				9				409
Profit on sale of land			(7	)			(292	)			—				—
Negative goodwill			(2	)			(73	)			—				—
Tax effect on above			2				88				(3	)			(127	)
Adjusted PAT			69				3,068				44				1,949

About Dr. Reddy’s

Established in 1984, Dr. Reddy’s Laboratories (NYSE: RDY) is an emerging global pharmaceutical company. We fulfill our purpose of providing affordable and innovative medicines through three core businesses: Pharmaceutical Services and Active Ingredients, Global Generics and Proprietary Products. Our products are marketed globally, with focus on India, US, UK, Germany and Russia.

Disclaimer

This press release includes forward-looking statements, as defined in the U.S. Private Securities Litigation Reform Act of 1995. We have based these forward-looking statements on our current expectations and projections about future events. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. Such factors include, but are not limited to, changes in local and global economic conditions, our ability to successfully implement our strategy, the market acceptance of and demand for our products, our growth and expansion, technological change and our exposure to market risks. By their nature, these expectations and projections are only estimates and could be materially different from actual results in the future.

CONTACT INFORMATION

Investors and Financial Analysts:

Kedar Upadhye at kedaru@drreddys.com or on +91-40-66834297

Raghavender R at raghavenderr@drreddys.com or on +91-40-49002135

Milan Kalawadia (North America) at mkalawadia@drreddys.com or on +1-9082034931

Media:

Rajan S at rajans@drreddys.com or on +91-40- 49002445

Note: All discussions in this release are based on unaudited consolidated IFRS financials.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		DR. REDDY’S LABORATORIES LIMITED
		(Registrant)
		By:		/s/ Sandeep Poddar
Date: May 23, 2011				Name:		Sandeep Poddar
				Title:		Company Secretary