DR. REDDYS LAB 2023-24 Annual Report Analysis

Thu, 4 Jul

DR. REDDYS LAB has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the company during FY23-24.

DR. REDDYS LAB Income Statement Analysis

• Operating income during the year rose 13.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 24.5% YoY during the fiscal. Operating profit margins witnessed a fall and down at 28.4% in FY24 as against 25.9% in FY23.
• Depreciation charges increased by 17.6% and finance costs increased by 19.8% YoY, respectively.
• Other income declined by 15.3% YoY.
• Net profit for the year grew by 23.8% YoY.
• Net profit margins during the year grew from 18.3% in FY23 to 19.9% in FY24.

DR. REDDYS LAB Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	246,697	280,111	13.5%
Other income	Rs m	10,555	8,943	-15.3%
Total Revenues	Rs m	257,252	289,054	12.4%
Gross profit	Rs m	63,860	79,478	24.5%
Depreciation	Rs m	12,502	14,700	17.6%
Interest	Rs m	1,428	1,711	19.8%
Profit before tax	Rs m	60,485	72,010	19.1%
Tax	Rs m	15,412	16,231	5.3%
Profit after tax	Rs m	45,073	55,779	23.8%
Gross profit margin	%	25.9	28.4
Effective tax rate	%	25.5	22.5
Net profit margin	%	18.3	19.9

Don't Miss: Key Information for Long-term Investors

DR. REDDYS LAB Balance Sheet Analysis

• The company's current liabilities during FY24 stood at Rs 96 billion as compared to Rs 86 billion in FY23, thereby witnessing an increase of 11.9%.
• Long-term debt stood at Rs 6 billion as compared to Rs 1 billion during FY23, a growth of 368.7%.
• Current assets rose 22% and stood at Rs 248 billion, while fixed assets rose 16% and stood at Rs 130 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 378 billion as against Rs 316 billion during FY23, thereby witnessing a growth of 20%.

DR. REDDYS LAB Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	231,404	281,235	21.5
Current Liabilities	Rs m	85,721	95,880	11.9
Long-term Debt	Rs m	1,278	5,990	368.7
Total Liabilities	Rs m	315,799	378,060	19.7
Current assets	Rs m	203,161	247,886	22.0
Fixed Assets	Rs m	112,638	130,174	15.6
Total Assets	Rs m	315,799	378,060	19.7

DR. REDDYS LAB Cash Flow Statement Analysis

• DR. REDDYS LAB's cash flow from operating activities (CFO) during FY24 stood at Rs 45 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -40 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -4 billion, an improvement of 86% on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs 1 billion from the Rs -9 billion net cash flows seen during FY23.

DR. REDDYS LAB Cash Flow Statement 2023-24

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-23	Mar-24
Cash Flow from Operating Activities	Rs m	58,875	45,433	-22.8%
Cash Flow from Investing Activities	Rs m	-41,373	-40,283	-
Cash Flow from Financing Activities	Rs m	-26,861	-3,763	-
Net Cash Flow	Rs m	-9,073	1,328	-

Current Valuations for DR. REDDYS LAB

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 334.4, an improvement from the EPS of Rs 270.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 6,428.1, stands at 19.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.8 times, while the price to sales ratio stands at 3.8 times.
• The company's price to cash flow (P/CF) ratio stood at 12.9 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Sales per share (Unadj.)	Rs	1,481.4	1,679.1
TTM Earnings per share	Rs	270.7	334.4
Diluted earnings per share	Rs	270.2	334.3
Price to Cash Flow	x	13.4	12.9
TTM P/E ratio	x	17.2	19.3
Price / Book Value ratio	x	3.0	3.2
Market Cap	Rs m	703,039	908,234
Dividends per share (Unadj.)	Rs	40.0	40.0

Ratio Analysis for DR. REDDYS LAB

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.6x during FY24, from 2.4x during FY23. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio deteriorated and stood at 43.1x during FY24, from 43.4x during FY23. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company improved and stood at 19.8% during FY24, from 19.5% during FY24. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company declined and down at 25.7% during FY24, from 26.6% during FY23. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company improved and stood at 15.2% during FY24, from 14.7% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Current ratio	x	2.4	2.6
Debtors’ Days	Days	107	105
Interest coverage	x	43.4	43.1
Debt to equity ratio	x	0.0	0.0
Return on assets	%	14.7	15.2
Return on equity	%	19.5	19.8
Return on capital employed	%	26.6	25.7

To see how DR. REDDYS LAB has performed over the last 5 years, please visit here.

DR. REDDYS LAB Share Price Performance

Over the last one year, DR. REDDYS LAB share price has moved up from Rs 5,189.6 to Rs 6,428.1, registering a gain of Rs 1,238.5 or around 23.9%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 37,428.9 (up 0.7%). Over the last one year it has moved up from 25,703.5 to 37,428.9, a gain of 11,725 points (up 45.6%).

Overall, the S&P BSE SENSEX is up 22.7% over the year.

(To know more, check out historical annual results for DR. REDDYS LAB and quarterly results for DR. REDDYS LAB)