Dr. Reddy Laboratories and GAIL India Ltd Share Q2 Result

5paisa Research Team 5paisa Research Team 8th August 2022 - 06:55 pm

Dr. Reddy's Laboratories - Q2 Results

Dr. Reddy's Laboratories Ltd reported stellar numbers for the September 2021 quarter as its top line revenues grew by 17.7% at Rs.4,987 crore. Even on a quarter on quarter basis, the revenues were higher by 17.15%, showing even short term traction in the top line. Here is a gist of the key financials of Dr. Reddy Laboratories.

Rs in Crore	Sep-21	Sep-20	YOY	Jun-21	QOQ
Total Income (Rs cr)	₹ 5,763.20	₹ 4,896.70	17.70%	₹ 4,919.40	17.15%
Net Profit (Rs cr)	₹ 992.00	₹ 762.00	30.18%	₹ 571.00	73.73%
Diluted EPS (Rs)	₹ 59.65	₹ 45.83		₹ 34.34
Net Margins	17.21%	15.56%		11.61%

What were the triggers for the revenue growth. Let us look at specific verticals. Revenues from the pharma ingredients and the API segment were lower by 2.6% yoy at Rs.999 crore and that was due to supply chain constraints in the business. However, revenues from global generics were up 19% at Rs.4,743 crore and accounted for a bulk of the top line.

Net profits for the Sep-21 quarter were higher by 30.2% at Rs.992 crore. This was on the back of a spurt in the gross margins by 600 bps to 53.4%. Reddy Labs spent Rs.446 crore on R&D which is 7.7% of sales, and well above the peer group median. EBITDA margins at 27% improved by 600 bps quarter on quarter. India and EM markets showed best growth.

Reddy Labs had a comfortable net debt to equity ratio of 0.015X. Free cash flows stood at Rs.83 crore, which can considered small for a company of that size and scale. Net margins for Reddy Labs at 17.21% was surely better than 15.56% in the Sep-20 year ago quarter and it was sharply better than NPM of 11.6% in Jun-21 quarter.

GAIL India Ltd - Q2 Results

India’s largest gas transportation company, GAIL India, reported 67.39% growth in total revenues for the Sep-21 quarter on consolidated basis at Rs21,782cr. The revenues were higher by 73% on a sequential basis compared to Rs17,589cr revenues in the Jun-21 quarter. There was a volume boost and also a price boost linked to crude oil prices.

Rs in Crore	Sep-21	Sep-20	YOY	Jun-21	QOQ
Total Income (Rs cr)	₹ 21,782	₹ 13,012	67.39%	₹ 17,589	23.84%
Net Profit (Rs cr)	₹ 2,883	₹ 1,112	159.34%	₹ 2,138	34.88%
Diluted EPS (Rs)	₹ 6.49	₹ 2.47		₹ 4.81
Net Margins	13.24%	8.54%		12.15%

In terms of verticals of GAIL, the major boost to revenues came from the natural gas marketing vertical which was up by 71% at Rs21,011cr. Two other verticals viz. natural gas transmission and LPG transmission was almost flat on YoY basis. However petchem, liquid hydrocarbons and the CGD business saw good growth in revenues on YoY basis.

Net profits were up 159.34% for the Sep-21 quarter at Rs.2,883 crore. Profits were also higher by 35% on a quarter to quarter basis. The big boost to EBIT came from natural gas marketing which went from an EBIT loss of Rs-335 crore to an EBIT profit of Rs.1,029 crore. That actually triggered the boost to the overall profits to GAIL.

The EBIT contributions of CGD, liquid hydrocarbons and petchem also showed growth like in the case of the top line. However, this was on a much lower base. Net profit margins at 13.24% was substantially superior to 8.54% in the Sep-20 quarter and was also better than the net profit margins of 12.15% in Jun-21 quarter.