Edgar Filing: DR REDDYS LABORATORIES LTD

DR. REDDY’S LABORATORIES LIMITED

(Registrant)

/s/ Sandeep Poddar

Date: May 16, 2012

Sandeep Poddar

Company Secretary

Form 6-K

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 2012

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 revenues cross $2 billion milestone in FY12,” May 11, 2012.


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 revenues cross $2 billion milestone^[#] in FY12

FY12 Revenues at 96.7 billion, YoY growth of 30%

FY12 PAT* at 15.3 billion, YoY growth of 42%

Q4 FY12 Revenues at 26.6 billion, YoY growth of 32%

Q4 FY12 PAT* at 4.2 billion, YoY growth of 38%

Hyderabad, India, May 11^th, 2012: Dr. Reddy’s Laboratories Ltd. (NYSE: RDY) today announced its audited consolidated financial results for the quarter and full year ended March 31, 2012 under International Financial Reporting Standards (IFRS).

KEY HIGHLIGHTS

Ÿ	Consolidated revenues at 96.7 billion in FY12, year-on-year growth of 30%, driven by key markets of North America and Russia in Global Generics segment and Pharmaceutical Services and Active Ingredients segment.

•

Consolidated revenues of LOGO 26.6 billion in Q4 FY12, year-on-year growth of 32%.

Ÿ	EBITDA of 25.4 billion in FY12, 26% of revenues and recorded year-on-year growth of 51%.

•

EBITDA of LOGO 6.8 billion in Q4 FY12, 26% of revenues and recorded year-on-year growth of 34%.

Ÿ	*Profit after Tax in FY12 of 15.3 billion, year-on-year growth of 42%.**

•

Profit after Tax* of LOGO 4.2 billion in Q4 FY12, year-on-year growth of 38%.

Ÿ	During the year, the company launched 141 new generic products, filed 88 new product registrations and filed 68 DMFs globally.

Ÿ	The Board of Directors of the Company has proposed a dividend of Rs. 13.75 (275%) per equity share of Rs. 5/- face value, subject to the approval of shareholders.

[#]

Revenues based on the average billed dollar rate of 47.91

*	*Note: PAT adjusted for a) interest on bonus debentures b) Impairment of intangibles and c) corresponding tax adjustment*


All figures in millions, except EPS		All US dollar figures based on convenience translation rate of 1USD = 50.89

Dr. Reddy’s Laboratories Limited and Subsidiaries

Audited Consolidated Income Statement


	FY12									FY11
Particulars	($)			( )			%			($)			( )			%			Growth %
Revenue		1,901			96,737			100			1,468			74,693			100			30
Cost of revenues		853			43,432			45			677			34,430			46			26

Gross profit		1,048			53,305			55			791			40,263			54			32

Operating Expenses
Selling, general and administrative expenses		567			28,868			30			466			23,690			32			22
Research and development expenses		116			5,911			6			99			5,060			7			17
Write down of intangible assets		20			1,040			1			—			—			—			—
Other operating (income) / expense		(15	)		(765	)		(1	)		(22	)		(1,115	)		(1	)		(31	)

Results from operating activities		360			18,252			19			248			12,628			17			45

Net finance (income) / expense		(3	)		(160	)		(0	)		4			188			0			(185	)
Share of (profit) / loss of equity accounted investees		(1	)		(54	)		(0	)		(0	)		(3	)		(0	)		1700

Profit / (loss) before income tax		364			18,466			19			244			12,443			17			48

Income tax (benefit) / expense		83			4204			4			28			1,403			2			200

Profit / (loss) for the period		281			14,262			15			216			11,040			15			29

Diluted EPS		1.6			83.8						1.3			65.0						29

Profit Computation:


	FY12				FY11
EBITDA Computation	($)		( )		($)			( )
PBT		363		18,466		245			12,443
Interest		14		690		4			199
Depreciation		71		3,628		58			2,961
Amortization and Impairment		52		2,626		23			1,186

Reported EBITDA		500		25,409		330			16,789

Adjustments of exceptional items:
Profit on sale of land and negative goodwill		—		—		(7	)		(365	)

Adjusted EBITDA		500		25,409		323			16,424


	FY12						FY11
PAT Computation	($)			( )			($)			( )
PAT		280			14,262			217			11,040
Adjustments of exceptional items:
Interest on Bonus Debentures		9			470			—			—
Profit on sale of land and negative goodwill		—			—			(7	)		(365	)
Impairment		20			1,040			—			—
Tax adjustment		(9	)		(466	)		2			88

Adjusted PAT		300			15,306			212			10,763

Appendix 1: Key Balance Sheet Items


	(in millions)
	As on 31st Mar 12				As on 31st Mar 11
Particulars	($)		( )		($)		( )
Cash, cash equivalents and other investments		357		18,152		113		5,831
Trade receivables		498		25,339		346		17,615
Inventories		380		19,352		316		16,059
Property, plant and equipment		653		33,246		582		29,642
Goodwill and Other Intangible assets		265		13,529		300		15,246
Loans and borrowings (current and non current)		633		32,210		463		23,503
Trade payables		187		9,503		167		8,480
Equity		1,129		57,443		904		45,990

Appendix 2: FY12 Revenue Mix by Segment


	(in millions)
	FY12						FY11						Growth %
	($)		( )		%		($)		( )		%		Growth %
Global Generics		1,380		70,243		73		1,048		53,340		71		32
North America				31,889		45				18,996		36		68
Europe				8,259		12				8,431		16		(2	)
India				12,931		18				11,690		22		11
Russia and Other CIS				13,260		19				10,858		20		22
RoW				3,904		6				3,366		6		16
PSAI		468		23,812		25		386		19,648		26		21
North America				4,272		18				3,170		16		35
Europe				8,424		35				7,020		36		20
India				3,586		15				2,619		13		37
RoW				7,531		32				6,838		35		10
Proprietary Products and Others		53		2,682		3		34		1,705		2		57

Total		1,901		96,737		100		1,468		74,693		100		30

SEGMENTAL ANALYSIS

Global Generics

Revenues from Global Generics segment at LOGO 70.2 billion in FY12, year-on-year growth of 32% driven by key markets of North America and Russia.

•

Revenues from North America at LOGO 31.9 billion in FY12 grew by 62% in local currency over previous year. Revenues in Q4 FY12 at LOGO 8.7 billion represented year-on-year growth of 36% in local currency. In Q4 FY12, revenue share of olanzapine was below $2 million due to lower generic substitution and shelf stock adjustment.

•

Growth was largely driven by new product launches of ziprasidone, fondaparinux, amoxicillin clavulanic acid, products from Shreveport facility and market share expansion in existing products of lansoprazole and omeprazole Mg OTC.

•

16 new products were launched during the year.

•

26 products of prescription portfolio feature among the Top 3 ranks in market shares (Source: IMS Health Volumes February 2012).

•

During the year, 17 ANDAs were filed. Cumulatively 80 ANDAs are pending for approval with the USFDA of which 41 are Para IVs and 7 are with FTF status.

•

Revenues in Russia and Other CIS markets at LOGO 13.3 billion in FY12 represented year-on-year growth of 22%.

•

Revenues in Russia at LOGO 11.0 billion in FY12 represented year-on-year growth of 15% in local currency. Revenues in Q4 FY12 at LOGO 2.9 billion represented year-on-year growth of 23% in local currency.

•

Growth driven by volume increase across key brands and OTC portfolio.

•

OTC portfolio grew by 32% over previous year.

•

Based on market research, Dr. Reddy’s year-on-year rouble growth at 21% versus industry’s growth of 17%; Dr. Reddy’s is ranked 13th by market share (Source: Pharmexpert March 2012)

•

Revenues in Other CIS markets at LOGO 2.2 billion in FY12 grew by 17% over previous year.

•

Revenues in India at LOGO 12.9 billion in FY12 grew by 11% over previous year. Revenues in Q4 FY12 at LOGO 3.2 billion represented year-on-year growth of 16%.

•

Growth driven by volume increase across key brands and oncology portfolio.

•

Biosimilars portfolio grew by 33% over previous year.

•

23 new products were launched during the year.

•

Revenues from Europe at LOGO 8.3 billion in FY12 declined by 2% over previous year.

•

Revenues from Germany at LOGO 5.1 billion in FY12 declined by 15% in local currency over previous year. This decline was largely due to the continued tenderization of the German market.

Pharmaceutical Services and Active Ingredients (PSAI)

•

Revenues from PSAI are at LOGO 23.8 billion in FY 12, year-on-year growth of 21%. Revenues in Q4 FY12 at LOGO 7.5 billion represented year-on-year growth of 35%.

•

The growth in Active Ingredients business was led by sales to generic customers to support their generic product launches in line with patent expiries in the near term.

•

The growth in Pharmaceutical Services business was led by new customer orders.

•

During the year, 68 DMFs were filed globally, with 14 each in the US and Europe. The cumulative DMF filings as of 31^st March 2012 are 543.

INCOME STATEMENT HIGHLIGHTS:

•

Gross profit margin at 55% in FY12 marginally improved versus 54% in FY11. Gross profit margin for Global Generics and PSAI business segments were at 63% and 32% respectively.

•

Selling, General and Administration (SG&A) expenses including amortization at LOGO 28.9 billion increased by 22% over previous year. This increase is on account of higher manpower and distribution costs and the effect of rupee depreciation against multiple currencies.

•

In Q4 FY12, there were triggering events in the German market relating to reduction in the reference prices and additional tenders at low bid prices. As a result, a non-cash impairment charge, related to product intangibles, of LOGO 1,040 million was recorded in the books. Impairment charge after effecting the corresponding tax benefit was LOGO 730 million.

•

Net Finance income was at LOGO 160 million in FY 12 versus net Finance expense of LOGO 188 million in FY11. The change is on account of :

•

Net forex gain of LOGO 689 million in FY12 versus net forex loss of LOGO 57 million in FY11.

•

Net interest expense of LOGO 690 million in FY12 versus LOGO 199 million in FY11. This increase is largely on account of the interest on bonus debentures of LOGO 470 million recorded in FY12.

•

Profit on sale of investments of LOGO 161 million in FY12 versus LOGO 68 million in FY11.

•

EBITDA of LOGO 25.4 billion in FY12, 26% of revenues and recorded year-on-year growth of 51%.

•

Profit after Tax* in FY12 of LOGO 15.3 billion recorded year-on-year growth of 42%.

•

Earnings* per share in FY 12 were LOGO 89.9.

•

Capital expenditure in FY12 was LOGO 8.6 billion.

*	*Note: Adjusted for: a) interest on bonus debentures b) Impairment of intangibles and c) corresponding tax adjustment*

Appendix 4: Q4 FY12 Consolidated Income Statement


All figures in millions, except EPS		All US dollar figures based on convenience translation rate of 1USD = 50.89


	Q4 FY12									Q4 FY11
Particulars	($)			( )			%			($)			( )			%			Growth %
Revenue		522			26,584			100			396			20,173			100			32
Cost of revenues		248			12,613			47			181			9,224			46			37

Gross profit		274			13,971			53			215			10,949			54			28

Operating Expenses
Selling, general and administrative expenses		142			7,217			27			120			6,127			30			18
Research and development expenses		34			1,741			7			29			1,491			7			17
Write down of intangible assets		20			1,040			4			—			—			—			—
Other operating (income) / expense		(4	)		(198	)		(1	)		(10	)		(512	)		(3	)		(61	)

Results from operating activities		82			4,171			16			76			3,843			19			9

Net finance (income) / expense		(2	)		(82	)		(0	)		(1	)		(74	)		(0	)		14
Share of (profit) / loss of equity accounted investees		(0	)		(12	)		(0	)		0			4			0			—

Profit / (loss) before income tax		84			4,265			16			77			3,913			19			9

Income tax (benefit) / expense		16			838			3			11			567			3			48

Profit / (loss) for the period		68			3,427			13			66			3,346			17			2

Diluted EPS		0.4			20.1						0.4			19.7						2

Appendix 5: Q4 FY12 Profit Computation


	(in millions)
EBITDA Computation	Q4 FY12				Q4 FY11
EBITDA Computation	($)		( )		($)			( )
PBT		84		4,265		77			3,913
Interest		2		88		2			104
Depreciation		20		1,020		15			787
Ammortization and Impairment		28		1,424		5			274

EBITDA		134		6,797		99			5,078

Adjustments of exceptional items:
Profit on sale of land and negative goodwill		—		—		(7	)		(365	)

Adjusted EBITDA		134		6,797		92			4,713


PAT Computation	Q4 FY12						Q4FY11
PAT Computation	($)			( )			($)			( )
PAT		67			3,427			66			3,346
Adjustments of exceptional items:
Interest on Bonus Debentures		2			116
Profit on sale of land and negative goodwill								(7	)		(365	)
Impairment		20			1,040
Tax adjustment		(7	)		(349	)		2			88

Adjusted PAT		82			4,234			61			3,069

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 business segments—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. Focus markets include India, USA, Russia and CIS, Germany, UK, Venezuela, S. Africa, Romania, Australia and New Zealand.

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

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

Saunak Savla at saunaks@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 audited 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.