Dr. Reddy's Laboratories Ltd

Ladies and gentlemen, good day and welcome to the Dr. Reddy's Q3F520 earnings conference call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Amit Agarwal. Thank you and over to you sir.

Very good morning and good evening to all of you and thank you for joining us today for the Dr. Reddy's earnings conference call for the quarter ended 31st December 2019. Earlier during the day we have released our results and the same are also posted on our website. This call is being recorded, and the playback and transcript shall be made available on our website soon. All the discussions and analysis of this call will be based on the IFRS Consolidated Financial Statement. To discuss the business performance and outlook, we have the leadership team of Dr. Reddy, comprising Mr. Erez Israeli, our CEO, Mr. Shaman Chakraborty, our CFO, and the investor relations team. Please note that today's call is a copyrighted material of Dr. Reddy and cannot be rebroadcasted or attributed in press or media outlets without the company's express written consent. Before I proceed with the call, I would like to remind everyone that the safe harbor contained in today's press release also pertains to this conference call. Now, I hand over the call to Mr. Swamin Chakraborty. Over to you, sir.

Thank you, Amit. Greetings to everyone. The current quarter's financial performance has been quite good with the highest ever quarterly sales without any one-off fighting. An improvement in both the growth margin and EBITDA margin and healthy cash generation. However, the profit is impacted by significant amount of impairments taken due to specific triggers occurred during the quarter. Let me take you through these and other major items in some more detail. Herein all the amounts are translated into US dollars at a convenient translation rate of Rs. 71.36, which is the rate as of 31 December 2019. Consolidated revenues for the quarter are at Rs. 4,384 crores, which is The growth has been supported by a good performance across all our businesses. On a sequential quarter basis, our reported revenue declined by 9%. In Q2 FY20, we had an amount of Rs. 723 crores recognized as revenue towards the sale of two neurology brands of our proprietary product business. And adjusted for this, the sequential quarter growth would have been 7%. Consolidated gross profit margin for this quarter is 54.1%. with an improvement of 20 BPS on a year-on-year basis. On a quarter-on-quarter basis, while there is a decline of 340 BPS in the reported gross margin, however, after adjusting for the one-off in Q2 FY20, the normalized gross profit margin has improved by about 260 basis points. Gross margin for the Global Genetics business is 58.2%. with a quarter-on-quarter improvement of 270 basis points. Growth margin for the PSAI business is 30% with a quarter-on-quarter improvement of 540 basis points.