Dr. Reddy’s Laboratories Limited (NYSE:RDY) Q1 2024 Earnings Call Transcript

Surya Patra: Okay, sure. The second question is that regards the linear leader mine. So we have almost kind of approaching who finished the first year of supply. And obviously, as per the prescription trends, we see that okay, we have already kind of achieving 6% kind of volume share now. So is it fair to believe this is the kind of first year number and we should see a progressive improvement in the volume share going ahead?

Erez Israeli: So, you know, we cannot share a specific number on these products. We are in agreements in which volume.

Surya Patra: This is there in the public domain in terms of the RX volume. So that is why I’m asking questions.

Erez Israeli: I appreciate the question, but I cannot share I have the full knowledge of the quantities, obviously, and I cannot share that as per our agreement. But what I can say that these kind of levels of sales of linodolamide likely to continue and fluctuate from a quarter to quarter based on orders and based on preference of customers. But we believe that it will continue to play to be an importance against products until the end of the agreement, which is likely to be in January 26.

Surya Patra: Sure. Seth, my last question is about the PSI business. We have seen sequential correction in the revenue as well as the margins there. And you have also mentioned in an opening remark that there is inventory rationalization trend that is ongoing. So do you think this is a kind of couple of quarter or more kind of situation? And generally, the APIs and manufacturing supply opportunity kind of business are likely to face this inventory destocking kind of a trend and could have impact on the margins generally in the near term.

Erez Israeli: I think during the quarter, we have a certain pickup that is related to timing of picking up the orders primarily. So I believe that it will cost itself actually relatively fast already from next quarter, from Q2. So overall, I’m confident that our API business will grow this year.

Surya Patra: Sure, sir. I have a couple more. I’ll join this.

Operator: Thank you. Wish you all the best. Thank you. The next question is from the line of Neha Manpuria from Bank of America. Please go ahead.

Neha Manpuria: Thanks for taking my question. My first question is on the India business. I look at the number that we reported in fourth quarter and strip out the brand divestment. Based on that, we’ve seen a pretty sharp increase on that base in the first quarter. Did the trade generic? I know we officially announced the launch in July, but was there any contribution at all of the trade generic business in the first quarter? Or if you could give us some color in terms of what’s driving the improvement that we are seeing and how much more can this continue to I know you talked about a bunch of initiatives, but how should we look at growth in this business from the high single digit that you point it in your opening remarks?

Erez Israeli: Yeah, thank you for that. The traditional did not yet contribute much because we just recently launched. So most of the growth happened from our branded genetics, our key brands that we are focusing on, these trends likely to continue also progress and actually going to improve the activities I mentioned and we discussed quite a few occasions on our journey for top five. It’s a combination of both the innovation as well as the investment in the portfolio that we have, including the private. So most of the deals that we sign and going to be signed, we have actually quite a few deals that are in discussions is to bring innovation to India. Actually horizon two that we have discussed in the past is all about to bring innovation to India, mostly in licensing, in some product acquisitions, and some potential partnership with other players.