Dr Reddy Laboratories : Q4FY24 Press PPT

Q4 & FY24

FINANCIAL RESULTS

May 7, 2024

1

Safe Harbor Statement

This presentation contains forward-looking statements and information that involve risks, uncertainties and assumptions. Forward-looking statements are all statements that concern plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are other than statements of historical fact, including, but not limited to, those that are identified by the use of words such as "anticipates", "believes", "estimates", "expects", "intends", "plans", "predicts", "projects" and similar expressions. Risks and uncertainties that could affect us include, without limitation:

• General economic and business conditions in India and other key global markets in which we operate;
• The ability to successfully implement our strategy, our research and development efforts, growth & expansion plans and technological changes;
• Changes in the value of the Rupee and other currency changes;
• Changes in the Indian and international interest rates;
• Allocations of funds by the Governments in our key global markets;
• Changes in laws and regulations that apply to our customers, suppliers, and the pharmaceutical industry;
• Increasing competition in and the conditions of our customers, suppliers and the pharmaceutical industry; and
• Changes in political conditions in India and in our key global markets.

Should one or more of such risks and uncertainties materialize, or should any underlying assumption prove incorrect, actual outcomes may vary materially from those indicated in the applicable forward-looking statements.

For more detailed information on the risks and uncertainties associated with the Company's business activities, please see the company's annual report filed in Form 20-F with the US SEC for the fiscal year ended March 31, 2023 and quarterly financial statements filed in Form 6-K with the US SEC for the quarters ended Jun 30, 2023, Sep 30, 2023, Dec 30, 3023 and our other filings with US SEC. Any forward-looking statement or information contained in this presentation speaks only as of the date of the statement. We are not required to update any such statement or information to either reflect events or circumstances that occur after the date the statement or information is made or to account for unanticipated events.

2	|	May 7, 2024	|	Q4 & FY24 Press Meet	|	As per consolidated financial statements under IFRS

Q4FY24 Performance

• 7,083 Cr

Revenues

12%YoY 2% QoQ

• 1,872 Cr | 26%
  EBITDA | EBITDA %

15%YoY 11% QoQ

• 1,602 Cr | ~23% PBT | PBT %

21%YoY 12% QoQ

• 1,307 Cr | ~18% PAT | PAT %

36%YoY 5% QoQ

FY24 Performance

• 27,916 Cr

Revenues

14%YoY

• 8,301 Cr | ~30%
  EBITDA | EBITDA %

14%YoY

• 7,187 Cr | ~26% PBT | PBT %

19%YoY

• 5,569 Cr | ~20% PAT | PAT %

24%YoY

Another year of strong performance with double-digit growth in revenues & profits

FINANCIAL HIGHLIGHTS

• Highest ever annual revenues and profits
• Adjusted for income from brand divestment of non-core brands in India from prior year, underlying YoY revenue growth is at 17% for Q4 and 16% for FY24
• Robust EBITDA and an annualised RoCE at 36%
• A strong balance sheet with Net cash surplus of ₹6,459 Cr

3	|	May 7, 2024	|	Q4 & FY24 Press Meet	|	As per consolidated financial statements under IFRS

Q4FY24 Highlights : Collaborations with industry partners and investing in businesses of future to enable us to deliver on our purpose

STRATEGIC INITIATIVES

• 2nd largest vaccine player in India through Sanofi partnership
• Partnered with Bayer to distribute second brand to Vericiguat, in India
• Licensed Centhaquine in India for hypovolemic shock treatment
• Partnered with Amgen for osteoporosis drug, Evenity® (romosozumab) in India
• Acquired women's dietary supplement portfolio, MenoLabs®
• Launched our first Biosimilar in UK, Bevacizumab
• Entered UK consumer health market with allergy medication, Histallay® launch
• Nerivio®, now launched in Europe, starting with Germany

OTHER UPDATES

• VAI status provided to FTO-3 & R&D centre in Bachupally, Hyderabad
• CRL issued to the BLA of our proposed biosimilar Rituximab
• Included in S&P Global Sustainability Yearbook 2024 for the 4th consecutive year - top 10% score category for first time
• 'A' rating in Supplier Engagement; only Indian Pharma Co. with 'A minus' rating in Climate Change & Water Security in 2023
  CDP

4	|	May 7, 2024	|	Q4 & FY24 Press Meet	|	As per consolidated financial statements under IFRS

Formed a joint venture with Nestlé India to take health science nutraceutical portfolio to consumers in India

• Unites global assortment of nutritional health solutions, including vitamins, minerals, herbals, and supplements from Nestle Health Science (NHSc), and harnessing the commercial expertise of Dr. Reddy's
• Nestlé Health Science brands to be licensed into the JV :

Nature's Bounty, Osteo Bi-Flex,Ester-C, Resource High Protein, Optifast, Resource Diabetic, Peptamen, Resource Renal and Resource Dialysis

• Dr. Reddy's brands to be licensed into the JV :
  Rebalanz, Celevida, Antoxid, Kidrich-D3, Becozinc
• JV Company to become operational from Q2 FY25

5	|	May 7, 2024	|	Q4 & FY24 Press Meet	|	As per consolidated financial statements under IFRS

Q4FY24 growth driven by increase in base business volumes in US and new product launches in Emerging Markets

REVENUE BY SEGMENT	GLOBAL GENERICS REVENUE BY GEOGRAPHY
			₹ 3,263 Cr	₹ 521 Cr
			North America	Europe

		GLOBAL GENERICS	29%YoY	3% QoQ		5%YoY	5% QoQ
		86%
₹ 7,083 Cr				46%	7%
12%YoY	2%QoQ	PSAI
		12%
	OTHERS				16%	₹ 1,127 Cr
		2%					India

12%YoY^ 5% QoQ

₹ 6,119 Cr	₹ 822 Cr
Global Generics	Pharmaceutical Services &
Active Ingredients (PSAI)

13%YoY	3% QoQ	6%YoY	5% QoQ	17%	₹ 1,209 Cr
				Emerging Markets
^Adjusted for brand divestment income in previous period; India grew in double-digit @ 11% YoY			9%YoY	6% QoQ

6	|	May 7, 2024	|	Q4 & FY24 Press Meet	|	As per consolidated financial statements under IFRS

Investing to strengthen our brands & creating future growth platforms Q1 FY24

Performance

GROSS MARGINS (% of Revenue)	SG&A EXPENSES (% of Revenue)	R&D EXPENSES (% of Revenue)

Q4FY24

Q3FY24

Q4FY23

		58.6%		Q4FY24
		58.5%	+7 bps QoQ	Q3FY24
	57.2%			+140 bps YoY	Q4FY23

			28.9%		Q4FY24
	+1% QOQ	Q3FY24
	28.0%
			Q4FY23
		28.6%	+14% YoY

	9.7%	+24% QOQ
	7.7%
		8.5%	+28% YoY

CAPEX (₹ Cr)		FREE CASH FLOW (₹ Cr)	NET DEBT / EQUITY

FY24

FY23

FY22

FY21

FY20

					1517	FY24*
			1132	1466	FY23*
				FY22
		974			FY21*
	485					FY20

	2672	4566	-0.23
					-0.21
	1191				-0.08
			2464		-0.04
		2313		-0.03

Mar '24^

Mar '23

Mar '22

Mar '21

Mar '20

*Before acquisition related payouts	^Net Cash Surplus (Adjusted for non-current cash &
	borrowings) stood at ₹ 6,459 Cr. as on 31st Mar 2024

7	|	May 7, 2024	|	Q4 & FY24 Press Meet	|	As per consolidated financial statements under IFRS

North America Q4FY24

Good volume growth in our base business; strengthening position in OTC through acquisitions

Performance

46%

Revenues

• 3,263 Cr

29%YoY 3% QoQ

GROWTH DRIVERS

• Driven by market share expansion in base business, integration of Mayne portfolio, partially offset by price erosion

MARKET PERFORMANCE

16.5% vs. 4.8%

DRL Growth vs. US Generic

Market Growth*

*As per IQVIA MAT for Feb' 24

PRICE

EROSION

STABLE

NEW

LAUNCHES

5 21

Q4 FY24

NEW

FILINGS

9 | 1	17 | 2
Q4	FY24

ANDA | NDA

PENDING

APPROVAL

81 5

ANDA NDA

Includes 50 Para IVs & 24 FTFs

STRATEGIC

HIGHLIGHTS

• Acquired MenoLabs® branded portfolio of women's health focused supplements

8	|	May 7, 2024	|	Q4 & FY24 Press Meet	|	As per consolidated financial statements under IFRS

India Q4FY24

Double-digit growth excluding divestment income in previous year; continuous focus on strategic collaborations

Performance

16%

Revenues

• 1,127 Cr

12%YoY 5% QoQ

GROWTH DRIVERS

• Decline largely on account of divestment of few non-corebrands last year

MARKET PERFORMANCE

8.9% vs. 5.7%

DRL Growth vs. IPM Growth*

*As per IQVIA MQT Mar' 24

MARKET

RANKING

10th

MQT & FTM

NEW BRAND

LAUNCHES

3 13

Q4 FY24

STRATEGIC

HIGHLIGHTS

• 2nd largest vaccine player through exclusive distribution partnership with Sanofi
• To distribute second brand to Bayer's heart failure management drug,
  Vericiguat
• Licensed Centhaquine for hypovolemic shock treatment from Pharmazz

*As per IQVIA Mar'24

9	|	May 7, 2024	|	Q4 & FY24 Press Meet	|	As per consolidated financial statements under IFRS

Emerging

Markets Q4FY24

Performance

Growth driven by new product launches in RoW and market share expansion; offset by unfavourable forex

REVENUE SPLIT	OTHER HIGHLIGHTS

17%

Revenues

• 1,209 Cr

9%YoY

6% QoQ

GROWTH DRIVERS

• Revenues from new launches in RoW and higher volumes in base business, offset by unfavourable forex

CISR 18%

Russia

41%

• 499 Cr

Russia

4%YoY

15% QoQ

• Constant currency growth:

YoY +9% & QoQ

decline of 13%

RoW 41%

• 217 Cr

CISR

5%YoY

7% QoQ

• Growth impacted by lower sales volumes

NEW

LAUNCHES

17 106

Q4 FY24

New Products across markets

• 493 Cr

RoW

34%YoY 7% QoQ

• YoY growth driven by new product launches

10 |	May 7, 2024	|	Q4 & FY24 Press Meet	|	As per consolidated financial statements under IFRS