Dr. Reddy's Laboratories
) reported fourth quarter fiscal 2014 (ended Mar 31, 2014) earnings
per American Depositary Share (ADS) of 47 cents, missing the Zacks
Consensus Estimate of 52 cents. Earnings during the quarter were
below the year-ago figure of 56 cents per ADS.
The company reported revenues of $580 million during the
quarter, reflecting a year-over-year increase of 4% and above the
Zacks Consensus Estimate of $571 million.
For fiscal 2014, Dr. Reddy's earnings were $2.10 per ADS, up 28%
year over year but short of the Zacks Consensus Estimate of $2.18.
Revenues for fiscal 2014 were up 14% year over year to $2.2
billion, beating the Zacks Consensus Estimate of $2.15 billion.
Dr. Reddy's launched 13 new generic products, filed 22
registrations for new products and also filed 29 drug master files
(DMFs) globally in the fourth quarter.
Fiscal 2014 in Detail
Dr. Reddy's reports revenues under three segments - Global
Generics, Pharmaceutical Services & Active Ingredients (PSAI)
and Proprietary Products and Others. Revenues at the Global
Generics segment were up 27% to $1.8 billion. Strong sales in North
America and emerging markets primarily led to the upbeat Global
Generics revenues increased in North America (up 46%), Russia
(up 16%), other CIS (Commonwealth of Independent States) markets
(up 22%), India (up 8%) and the rest of the world/RoW (up
PSAI revenues fell 22% to $400 million during the fiscal year
due to soft demand from key customers and fewer launches. Revenues
in the Proprietary Products and Others segment inched up 1% to $51
million during the fiscal year.
Selling, general and administration (SG&A) expenses
including amortization amounted to $646 million, reflecting an
increase of 13%. The increase was due to annual increments,
additional labor deployment, marketing expenses and rupee
depreciation against the dollar. Research and development (R&D)
expenses increased 62% to $207 million driven by planned R&D
During the fiscal year, Dr. Reddy's made 13 filings in the U.S.
The company has 62 abbreviated new drug application (ANDAs) pending
approval with the U.S. Food and Drug Administration (FDA) of which
39 are Para IV filings and 9 are first-to-file.
The stock carries a Zacks Rank #3 (Hold). We are pleased with
the Generic segment's performance in North America. Dr. Reddy's is
progressing toward a greater mix of complex generics and limited
competition products to its portfolio.
However, investors looking for better-ranked stocks may consider
). Akorn carries a Zacks Rank #2 (Buy) while Allergan and
Mallinckrodt carry a Zacks Rank #1 (Strong Buy).
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