Edgar Filing: DR REDDYS LABORATORIES LTD

Form 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

February 2013

Commission File Number – 1-15182

DR. REDDY’S LABORATORIES LIMITED

(Name of Registrant)

8-2-337, Road No. 3, Banjara Hills

Hyderabad, Andhra Pradesh 500 034, India

+91-40-4900-2900

(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 x Form 40-F ¨

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): ¨

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

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): ¨

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

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 ¨ No x

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 Q3 & H1 9 months Financial Results”, February 14, 2013.


Press Release
		Dr. Reddy’s Laboratories Ltd.
		8-2-337, Road No. 3
		Banjara Hills, Hyderabad—500 034
		Andhra Pradesh, India

		Tel: 91-40-4900-2900
		Fax: 91-40-4900-2999

		www.drreddys.com

Dr. Reddy’s Q3 & H1 9 months Financial Results


Q3 FY13 Revenues at 28.7 billion		9 months FY13 Revenues at 82.9 billion
(YoY growth of 23%)#		(YoY growth of 26%)#

Q3 FY13 EBITDA at 6.0 billion		9 months FY13 EBITDA at 18.6 billion

*Adjusted Q3 FY13 PAT at 3.6 billion		**Adj 9 months FY13 PAT at 11.3 billion

Hyderabad, India, February 14, 2013: Dr. Reddy’s Laboratories Ltd. (NYSE: RDY) today announced its unaudited consolidated financial results for the quarter ended December 31, 2012 under International Financial Reporting Standards (IFRS).

KEY HIGHLIGHTS (Q3 FY13)

•

Consolidated revenues for Q3 FY13 at 28.7 billion, recorded YoY growth of 23%^#. Consolidated revenues for 9 months FY13 at 82.9 billion, recorded YoY growth of 26%^#.

•

Revenues from the Global Generics segment for Q3 FY13 at LOGO 20.8 billion, recorded a YoY growth of 24%^# primarily driven by North America and the Emerging market territories.

•

Revenues from the PSAI segment for Q3 FY13 at LOGO 7.1 billion, recorded YoY growth of 28%.

•

EBITDA for Q3 FY13 at 6.0 billion, 21% of revenues. EBITDA for 9 months FY13 at 18.6 billion, 22% of the revenues.

•

PAT for Q3 FY13 at 3.8 billion, 13% of revenues. PAT for 9 months at 11.1 billion, 13% of revenues.

•

*Adjusted PAT for Q3 FY13 at 3.6 billion, 13% of revenues.

•

During the quarter, the company launched 17 new products, filed 13 new product registrations and filed 13 DMFs globally.

#	*Excluding the impact of the olanzapine profit share recorded in Q3 FY12*

*	*Adjusted for tax normalization on account of the annual effective tax rate*

**	*Adjusted for (a) impairment charges in Q2 FY13 and (b) tax normalization on account of the annual effective tax rate.*


All figures in millions, except EPS		All US dollar figures based on convenience translation rate of 1USD = 54.86

Dr. Reddy’s Laboratories Limited and Subsidiaries

Unaudited Consolidated Income Statement


	Q3 FY13									Q3 FY12									Growth
Particulars	($)			(Rs.)			%			($)			(Rs.)			%			%
Revenue		522			28,651			100			505			27,692			100			3
Cost of revenues		247			13,559			47			203			11,117			40			22
Gross profit		275			15,092			53			302			16,575			60			(9	)
Operating Expenses
Selling, general & administrative expenses		156			8,571			30			140			7,679			28			12
Research and development expenses		37			2,026			7			28			1,514			5			34
Other operating (income) / expense		(4	)		(233	)		(1	)		(3	)		(165	)		(1	)		41
Results from operating activities		86			4,728			17			138			7,547			27			(37	)
Net finance (income) / expense		2			96			0			(3	)		(174	)		(1	)		NC
Share of (profit) / loss of equity accounted investees		(1	)		(32	)		(0	)		(0	)		(26	)		(0	)		23
Profit before income tax		85			4,664			16			141			7,747			28			(40	)
Income tax expense		16			882			3			48			2,617			9			(66	)
Profit for the period		69			3,782			13			94			5,130			19			(26	)
Diluted EPS		0.4			22.20						0.5			30.16						(26	)

PROFIT COMPUTATION:


	Q3 FY13						Q3 FY12
EBITDA Computation	($)			( )			($)		( )
PBT		85			4,664			141		7,747
Net Interest Expenses / (Income)		(0	)		(13	)		3		155
Depreciation		18			971			16		899
Amortization		7			411			7		408
Reported EBITDA		110			6,033			168		9,209

Q3 FY13

Q3 FY12

Adjusted PAT Computation

($)

( )

($)

( )

PAT (reported)

3,782

5,130

Adjustments:

Tax adjustment*

)

(138

)

852

Adjusted PAT

3,644

109

5,982

*	Q3 FY13 normalized to the FY13 annual effective tax rate and Q3 FY12 normalized to the FY12 annual effective tax rate

Note: The above presented unaudited consolidated income statement for 3 months ended 31 December 2012 is based on the financial submissions to be made with the US SEC in the form 6K. A charge of Rs 20.4 crs towards fuel surcharge adjustment was accounted in Q2 FY13 after the unaudited results were announced as a subsequent event adjustment since the related judgement of AP High Court was delivered before the filing of Form 6K with US SEC for Q2 FY13 financials. However, in the financials submitted to SEBI this charge has been considered in Q3 FY13 only.

SEGMENTAL ANALYSIS

Global Generics

Revenues from Global Generics segment for Q3 FY13 at LOGO 20.8 billion, recorded YoY growth of 24%^# driven by key markets of North America and the Emerging market territories.

•

Revenues from North America for Q3 FY13 at LOGO 9.2 billion ($178 Mn), recorded YoY growth of 38%^#.

•

Growth is largely driven by key limited competition products of ziprasidone, tacrolimus, fondaparinux and ramp-up in antibiotics portfolio.

•

Continued focus on gaining market shares in new products such as atorvastatin, metoprolol, ibandronate and montelukast granules during the quarter.

•

31 products from the prescription portfolio are ranked among the Top 3 in their respective market shares. (Source: IMS Health Volumes, November 2012)

•

During the quarter, 4 ANDAs were filed. Cumulatively, 65 ANDAs are pending for approval with the USFDA of which 35 are Para IVs and 8 have ‘First To File’ status.

•

Revenues from Russia and Other CIS markets for Q3 FY13 at LOGO 4.4 billion recorded YoY growth of 32%.

•

Revenues from Russia for Q3 FY13 at LOGO 3.7 billion recorded YoY growth of 35%, largely aided by seasonal offtake across major brands and new product launches.

•

Revenues from Other CIS markets for Q3 FY13 at LOGO 0.7 billion recorded YoY growth of 19%.

•

Revenues from India for Q3 FY13 at LOGO 3.7 billion recorded YoY growth of 12%.

•

Biosimilars portfolio grew YoY by 47% during the quarter.

•

8 new brands were launched during the quarter.

•

Revenues from Europe for Q3 FY13 at LOGO 1.9 billion declined YoY by 20%.

Pharmaceutical Services and Active Ingredients (PSAI)

•

Revenues from PSAI for Q3 FY13 at LOGO 7.1 billion, recorded YoY growth of 28%.

•

During the quarter, 13 DMFs were filed globally, including 3 in the US and 1 in Europe. The cumulative number of DMF filings as of December 31, 2012 is 566.

#	*Excluding the impact of the olanzapine profit share recorded in Q3 FY12*

INCOME STATEMENT HIGHLIGHTS:

•

Gross profit margin is at 53% in Q3 FY13. Gross profit margin for Global Generics and PSAI business segments are at 60% and 29% respectively.

•

Selling, General and Administration (SG&A) expenses for Q3 FY13 including amortization at LOGO 8.6 billion increased YoY by 12%.

•

Research & development expenses for Q3 FY13 at LOGO 2.0 billion is at LOGO 7% of revenues.

•

Net Finance expense is at LOGO 96 million, in Q3 FY13 compared to the net finance income of LOGO 174 million in Q3 FY12. The change is on account of :

•

Net decline in the forex benefit primarily on account of the loss on time value of options, due to the recent depreciation in the rupee.

•

Incremental Interest income of LOGO 168 million primarily on account of higher interest income from Fixed Deposit and mutual funds.

•

EBITDA for Q3 FY13 is LOGO 6.0 billion, 21% of revenues.

•

Profit after Tax in Q3 FY13 at LOGO 3.8 billion, 13% of revenues.

•

*Adjusted Profit after tax in Q3 FY13 at LOGO 3.6 billion, 13% of revenues.

•

Diluted earnings per share in Q3 FY13 are LOGO 22.2.

•

Capital expenditure for Q3 FY13 is LOGO 1.5 billion.

*	*Adjusted for tax normalization on account of the annual effective tax rate*


All figures in millions		All US dollar figures based on convenience translation rate of 1USD = 54.86

Appendix 1: Key Balance Sheet Items


	As on 31st Dec 12				As on 30th Sep 12
Particulars	($)		( )		($)		( )
Cash and cash equivalents		424		23,264		376		20,641
Trade receivables		490		26,873		478		26,247
Inventories		422		23,169		399		21,885
Property, plant and equipment		659		36,126		643		35,300
Goodwill and Other Intangible assets		226		12,436		224		12,297
Loans and borrowings (current & non current)		672		36,825		636		34,901
Trade payables		200		10,996		190		10,412
Equity		1,217		66,789		1,155		63,354

Appendix 2: Revenue Mix by Segment


	Q3 FY13						Q3 FY12
Segment	($)		( )		%		($)		( )		%		Growth %
Global Generics		380		20,828		73		388		21,287		77		(2	)
North America				9,243		44				11,114		52		(17	)
Europe				1,931		9				2,426		11		(20	)
India				3,718		18				3,333		16		12
Russia & Other CIS				4,380		21				3,317		16		32
RoW				1,556		7				1,097		5		42
PSAI		130		7,127		25		101		5,563		20		28
North America				1,266		18				1,170		21		8
Europe				2,472		35				1,652		30		50
India				1,268		18				862		15		47
RoW				2,121		30				1,880		34		13
Proprietary Products & Others		13		696		2		15		841		3		(17	)
Total		522		28,651		100		505		27,691		100		3


All figures in millions, except EPS		All US dollar figures based on convenience translation rate of 1USD = 54.86

Appendix 3: Consolidated Income Statement


	9 months FY13									9 months FY12									Growth
Particulars	($)			( )			%			($)			( )			%			%
Revenues		1,510			82,866			100			1,279			70,153			100			18
Cost of revenues		713			39,133			47			562			30,818			44			27
Gross profit		797			43,733			53			717			39,335			56			11
Operating Expenses
Selling, general and administrative expenses		453			24,862			30			395			21,651			31			15
Research and development expenses		97			5,347			6			76			4,170			6			28
Impairment loss on goodwill and intangible assets		12			688			1			0			0			0			0
Other operating (income) / expense		(15	)		(848	)		(1	)		(10	)		(567	)		(1	)		50
Results from operating activities		249			13,684			17			257			14,081			20			(3	)
Net finance (income) / expense		(1	)		(63	)		(0	)		(1	)		(78	)		(0	)		(20	)
Share of (profit) / loss of equity accounted investees		(1	)		(79	)		(0	)		(1	)		(43	)		(0	)		84
Profit before income tax		252			13,826			17			259			14,202			20			(3	)
Income tax expense		50			2759			3			61			3,367			5			(18	)
Profit for the period		202			11,067			13			197			10,835			15			2
Diluted EPS		1.2			64.95						1.2			63.68						2

Appendix 4: Profit Computation:


	9 months FY13						9 months FY12
EBITDA Computation	($)			( )			($)		( )
PBT		252			13,826			259		14,202
Net Interest Expenses / (Income)		(0	)		(1	)		11		601
Depreciation		51			2,810			48		2,607
Amortization & Impairment		35			1,932			22		1,202
Reported EBITDA		338			18,567			339		18,612

9 months FY13

9 months FY12

PAT Computation

($)

( )

($)

( )

PAT (reported)

202

11,067

197

10,835

Adjustments:

Impairment loss on goodwill and intangible assets

688

Tax adjustment*

)

(417

)

133

Adjusted PAT

207

11,338

199

10,968

*	Adjusted for tax normalization on account of the annual effective tax rate for respective YTD financial years.

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.

About Dr. Reddy’s

Dr. Reddy’s Laboratories Ltd. (NYSE: RDY) is an integrated global pharmaceutical company, committed to providing affordable and innovative medicines for healthier lives. Through its three businesses Pharmaceutical Services and Active Ingredients, Global Generics and Proprietary Products – Dr. Reddy’s offers a portfolio of products and services including APIs, custom pharmaceutical services, generics, biosimilars, differentiated formulations and NCEs. Therapeutic focus is on gastro-intestinal, cardiovascular, diabetology, oncology, pain management, anti-infective and pediatrics. Major markets include India, USA, Russia and CIS, Germany, UK, Venezuela, S. Africa, Romania, and New Zealand.

For more information, log on to: www.drreddys.com

CONTACT INFORMATION

Investors and Financial Analysts:

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

Saunak Savla at saunaks@drreddys.com / +91-40-49002135

Milan Kalawadia (USA) at mkalawadia@drreddys.com / +1 908-203-4931

Media:

S Rajan at rajans@drreddys.com / +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: February 14, 2013		Name:	Sandeep Poddar
		Title:	Company Secretary