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Dr. Reddy’s Laboratories (DRREDDY) Q3 2022 Earnings Call Transcript

Drreddy earnings call - final transcript.

Dr. Reddy’s Laboratories ( NSE: DRREDDY ) Q3 2022 earnings call dated Jan. 28, 2022

Corporate Participants:

Amit Agarwal  —  Head of Investor Relations

Parag Agarwal  —  Chief Financial Officer

Erez Israeli  —  Chief Executive Officer

Kunal Dhamesha  —  Emkay Global — Analyst

Neha Manpuria  —  Bank of America — Analyst

Damayanti Kerai  —  HSBC Securities and Capital Markets — Analyst

Ashwini Agarwal  —  Akash Ganga Investments — Analyst

Surya Narayanan  —  Phillip Capital — Analyst

Sameer Baisiwala  —  Morgan Stanley — Analyst

Shyam Srinivasan  —  Goldman Sachs — Analyst

Ashish Topdar  —  Motilal Oswal Asset Management — Analyst

Shrikant Akolkar  —  Asian Market Securities — Analyst

Alok Dalal  —  CLSA — Analyst

Presentation:

Ladies and gentlemen, good day, and welcome to Dr. Reddy’s Q3 FY ’22 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Amit Agarwal, Head of Investor Relations. Thank you, and over to you.

Thank you. 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 December 31, 2021. Earlier during the day, we have released our results and the same are also posted on our website. This call is being recorded and a 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 statements.

To discuss the business performance and outlook, we have the leadership team of Dr. Reddy, comprising Mr. Erez Israeli, our CEO; Mr. Parag Agarwal, our CFO; and the Investor Relations team. Please note that today’s call is a copyrighted material of Dr. Reddy’s and cannot be rebroadcasted or attributed in press or media outlet without the company’s expressed 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. Parag Agarwal. Over to you, sir.

Thank you, Amit, and greetings to everyone. Hope all of you are keeping well. We had yet another quarter of good performance in terms of year-on-year growth in revenues and profits, while maintaining healthy EBITDA margins and generating good cash flows. Let me take you through the key financial highlights for the quarter In a bit more detail. For this section, all the amounts are translated into U.S. dollars at a convenience translation rate of INR74.39, which is the rate as of December 31, 2021.

Consolidated revenue for the quarter stood at INR5,320 crores, that is $750 million, and grew by 8% on year-on-year basis and declined by 8% on a sequential quarter basis. Year-on-year growth has been supported by growth across most of our businesses and was driven by good base business performance and recent launches. Sequentially, however, our revenues were impacted on a higher base of Q2, which had higher contribution from COVID related products and recognition of out licensing income in our proprietary products business. Consolidated gross profit margin for this quarter has been a 53.8%, which was flat over previous year, however, the margin increased by 40 basis points on a quarter-on-quarter basis. Gross margin for the global generics and PSAI we’re at 57.8% and 22.5% respectively for the quarter.

The SG&A spend for quarter is INR1,541 crores, that is $207 million, an increase of 7% year-on-year and a decrease of 3% quarter-on-quarter. The year-on-year increase is in line with our business growth and on account of continued investment in sales and marketing activities for brands in India and emerging market. As a percentage to sales, our SG&A has been at 29%, which is lower by 20 basis points year-on-year.

The R&D spend for the quarter in INR416 crores, that is $56 million and is at 7.8% of sales. R&D spend increased by 1% year-on-year and declined by 7% quarter-on-quarter. The product development activities continued normally during the quarter and we continued to build a healthy pipeline of new products across our market.

The EBITDA for the quarter is INR1,266 crores, that is $170 million and the EBITDA margin is 23.8%. The EBITDA margin for the nine months in this fiscal is a 24%, and is closely tracking our aspiration target of 25%. Consequently, our profit before tax stood at INR971 crores, that is $131 million, which is a growth of 242% year-on-year and a decrease of 23% quarter-on-quarter. Adjusted for the impairment charges, our profits grew by 10.7% over previous year. Effective tax rate to the quarter has been at 27.2%. We expect our normal ETR to be in this range of 25% to 26%. Profit after tax for the quarter stood at INR707 crores, that is $95 million. Reported EPS for the quarter is INR42.48.

Operating working capital decreased by INR512crores, which is $69 million against that on September 30, 2021I think that of the tenders shortly 20-21. The decrease was primarily driven by a decrease in receivables of roughly INR616 crores aided by higher collections. Our capital investment during the quarter stood at INR414 crores, which is $56 million. The free cash flow generated during this quarter was a net inflow of INR1,274 crores, which is $171 million. Consequently, we now have a net cash surplus of INR998 crores, that is $134 million as on December 31, 2021.

Foreign currency cash flow hedges in the form of derivatives for the U.S. dollar are approximately $360 million, largely hedged around the range of INR75.4 to INR78.9 to the dollar, RUB5875 million at the rate of 0.9909 to the ruble, AUD2.5 million at the rate of INR58.74 to the Australian dollar, and ZAR36.9 million at the rate of INR4.97 to South African Rand, maturing in the next 12 months.

With this, I now request Erez to take through the key business highlights.

Thank you, Parag. Good morning, and good evening to everyone. I hope you and you’re family are all safe and healthy. I’m pleased to share that we had a strong financial performance during the quarter without any benefit from one-off or COVID related sales. We have grown on year across our key businesses in both EBITDA and ROCE margins are closer to our aspiration target of 25% each, while we continue to invest in our future growth business.

We have been able to achieve this in spite certain industry level headwinds, like higher level of price erosion across the Generics segment in the U.S. market, increase in commodity prices and higher freight costs. These sustained performance shows the resilience we have been able to build with our diversified business model to mitigate such external headwinds. We also generated significant cash flow during the quarter and are now having a cash — net cash surplus which will enable us to invest for future growth.

Let me take you to the key business highlights for the — for the quarter. The reference of these numbers in this sections are in respective local currencies. Our North America generic business recorded sales of $248 million for the quarter with a year-over-year growth of 6%, however, the sequential quarter decline of 2%. During the quarter, we continued to gain market share for some of our key products, including a recent launch of [Indecipherable] However, the sales were impacted due to price erosion for some of our products and has been the case for the entire sector and seasonal demand variation for few of our key products, we launched four new products in United States during this quarter.

Our Europe business recorded sales of EUR47 million and was largely flat both year-over-year or in sequential. During the quarter, we launched four new products in Germany and one product each in France and Ireland. We are expecting few good launches during Q4, which would enable us to return to growth in this market.

Our emerging market business recorded sales of INR1,154 crores with a strong year-on-year growth of 20%. However, reduced of a sequential decline of 11%. Within the emerging markets, the Russia business grew by 2% on a year-over-year basis and declined by 18% on a quarter-over-quarter basis in constant currency. As informed earlier, the Q2 performance in Russia was very strong, which supported by seasonal demand and launch of biosimilar Bevacizumab. In the rest of the world market, sales were supported by one-off sales of the COVID related products.

During the quarter, we launched 16 new products across the various emerging markets. India business recorded sales of INR1,027 crores with a year-over-year growth of 7% and sequential decline of 10%. Adjusted for COVID related portfolio sales in the previous year and the last quarter, the business performance has been fairly strong and in-line with expectations. During the quarter, we launched four new products in India market. As per the IQVIA report of December 20, 2021, we have grown higher than the market at 23.1% on net basis against market growth of 18.1%.

Our PSAI business recorded sales of $97 million with a year-over-year growth of 2%, but sequential quarter decline of 14%[Phonetic] We expect the performance to improve in the coming quarters.

During the quarter, we filed 32 drug master files globally, including filing made in the United States. We have also filed 22 formulation products across global markets and one ANDA in the United States. As of December 31, 2021, we had 91 cumulative filings pending for approval within the U.S. FDA, which include 88 ANDAs, and and three 505(b) (two)NDAs.

During the quarter, we have signed a deal with Citius [Phonetic] for commercialization of our biosimilar rituximab in the United seats. We are also continuing with the global development of five to seven other biosimilar in our portfolio within various stages of pre-clinical and clinical development. Earlier during the month, we have launched Molnupiravir in India, expanding our portfolio to fight against the ongoing COVID pandemic. We are also working on certain export content in line with the licensing rights of [Indecipherable]

As regards to Sputnik, we are now ready with capacity in India. We are working actively with the Government of India to reduce the [Indecipherable] of the vaccine and as a booster dose for Sputnik-V. We have also submitted proposals to DCGI to conduct trials to test booster to other vaccines. Sputnik continue to be a viable option for Dr. Reddy’s, for India and other and other countries.

Consistent with our aspiration and healthy balance sheet, M&A remains an integral part of our growth strategy and therefore we are actively pursuing few deals across our focused geographies. We are progressing well to strength the key processes in core businesses and in the digitalization journey. Going forward, we are looking to double down our efforts on the very critical and important areas of innovation, as well as ESG. There is a good progress to deliver in the short term and long-term growth levers across our businesses and we remain committed and optimistic about this.

I am pleased to share also the recent recognitions of our efforts towards ESG. In November 2021, we were positioned number nine, a non-pharma company in the world in the Dow Jones Sustainability Index 2021. During the quarter, we were also recognized by the UN WAP for general inclusivity in the workplace. [Indecipherable] manufacturing plant in Vizag was honored with the prestigious nation energy conversation award by the Bureau of Energy Efficiency, Ministry of Power, Government of India. We have been recognized as the most innovative company for the year of 2021 at the CII Industrial Innovation Awards 2021. Earlier this month, we won at prestige Ethics award, sustainable corporate of the year at the 2021 Frost & Sullivan TERI Sustainability 4.0 Award. As you can see, this should continue to remain our focus area and we are going to increase our efforts in this direction.

With this, I would like to open the floor for questions and answers.

Questions and Answers:

Thank you very much, sir. [Operator Instructions] The first question is from the line of Kunal Dhamesha from Emkay Global. Please go ahead.

Good evening, and thank you for giving the opportunity. So the first question is on the U.S., you have mentioned that the price erosion has been kind of little be here, but if we kind of do a back calculation, is it fair to say on a sequential basis it’s somewhere in the high single to low double digits kind of price erosion in U.S. for this quarter?

Yeah, so we — we did see an a kind of a [Indecipherable] of a kind of global phenomena, it continue to be a quarterly [Phonetic] basis situation, but in Q4, relatively a larger number of products [Indecipherable] work on the overall basis it’s more or like a double-digit, but despite that we are still growing. So managed to offset this erosion with new products, with market share, as well as with productivity activities. So this still remain an issue and and the growth of about, I think now 9 out of 10 quarters we are growing in the U.S., and this will continue to be a kind of the phenomena also in the future, in which I do see growth, may be slower than other markets, but we are still going to go and see.

Okay. Sure. And secondly on this COVID related contribution across our India and emerging market, would that be a percentage of revenue for the first nine months?

It was primarily in the second quarter, not so much in the first quarter. So, third quarter was without major sales of COVID product, and we will see probably also more in Q4. So in this respect, the main contribution of this portfolio will be in the second as well as in the fourth, not so much on the third.

And India, there was contribution in first quarter as well [Indecipherable]

In the third quarter not so much. That’s why on the sequential basis when you compare India and that’s why there is a decline because it was relatively large contribution during the second quarter, but not so much in the third. The second, you have remember was very much affected by the Delta wave and this one is Omicron wave. In between, luckily there was — there was no another wave, therefore not so much demand.

Sure. And for — just on the follow-up on that. Now that we are seeing healthy COVID contribution at least for the first nine months, do you see that to continue in FY ’23 or do you see that COVID contribution would not be a big part in FY ’23?

So we are preparing for that. We are prepared for that, so all the activities around the prevention, whether it’s vaccines or products as well as community treatments, whether its a product so that we have like no COVID and additional products that we are working on they are meant for that area. Naturally, we don’t know how this pandemic will evolve, its hard to predict how its going to be, but we are we prepared for it.

Okay, and in case this — if it doesn’t pan out, do we have — still have growth levers in place to grow on this base?

Absolutely. We will continue to grow in the spirit that we have discussed in the past that we did before, 25/25 [Phonetic] while financing the business with or without COVID products [Speech Overlap]

Okay, okay, thank you. Thank you, Erez.

Thank you. The next question is from the line of Neha Manpuria from Bank of America. Please go ahead.

Yeah, thank you for taking my question. Erez, you just mentioned about double-digit price erosion in the U.S. Could you give us some color on how this is trending in the quarter given it was product deficit. Should we see this a beating to more normalized price erosion? Any color on that.

It should be. So I believe that most of the products that faced the erosion were already there and I don’t anticipate. The business model, the transition in the U.S. will continue as it normally does. So, the business model will not change. But in terms of the products that were affected by that, I believe that most of the — most of the effect is behind us.

Understood. And, just to understand, given we saw double-digit price erosion in the U.S., but if you look at our generics gross margins, they seemed to have improved close to about 100 basis points quarter-on-quarter. Any color on, and despite the fact that we had headwinds in terms of raw material cost, etc. What drove this improved margins?

So it is a combination — it is a combination of what I discussed; first, launch of products which should change the mix, so it’s important mix. Second is productivity activity that we are doing on cost improvement programs and others. And third is market share with the relevant products within which we have better productivity. So we were preparing our self for this phenomena and like I mentioned in my script, we are growing despite those headwinds. So, and so I’m not so concerned about going forward.

Understood. And my last question, as you know, is on the India business. I think you mentioned there was no COVID product contribution today, assume there was no contribution from or very little contribution from Sputnik too in the quarter?

Yes, in quarter two there was a — in quarter two there was relatively a higher demand because it was very much affected at the time by the Delta wave. And in this quarter, luckily there was no such demand there in India. So what we are going to see is the contribution in India in Q2, as well as we are going to see some in Q4 because of the current wave of COVID. But Q3 was very less.

And what about the export — export opportunity for Sputnik? Are we in discussions with the government to allow us to export given that the booster trial will just start, so that is some time away.

We will, we can export, we can export the products. Both the vaccine as well as the other products.

Okay, and we have started exporting — exporting it in the current quarter or not as yet?

In Q3, we did not export any COVID products.

Understood. Thank you so much.

Thank you. The next question is from the line of Damayanti Kerai from HSBC Securities and Capital Markets. Please go ahead.

First question is, can you share your observation around the commodity and raw material price? Whether you have seen some kind of moderation compared to second quarter and how do you see this part moving up in next few quarters?

Yes, we did see, we saw it in three areas. Some commodity intermediate, so especially on that are serving us in the API. The second is in the energy cost, especially coal, few months ago, especially in India. And the third is on the freight — on the freight and the shipping the cost. And all of that we absorbed and are within the margins. So we counter-measure it with other activities to offset little bit. I believe that the trend is behind us in a way that I do not anticipate additional hike in this magnitude. Some of the prices did not go down yet to the original level, but I don’t anticipate additional inflation in this magnitude or scale.

So, maybe broadly we can assume that the peak is over and price might see, I’ll say more moderation from here on.

That’s which is one can predict, it looks better now. How to predict through the pandemic and the geopolitical situation in the world, assuming no other big event, it should be better.

Thank you. And my second question is, can you talk a bit about your biosimilar portfolio which you are working on, and which are target markets for key products?

You’re talking about COVID?

For biosimilars.

Our biosimilars. Yes, we are targeting globally. We have — we have Rituximab, which is we have now it commercially with most of the emerging market and the primary markets for it is today is India and Russia. And then we have the Bevacizumab [Phonetic] and additional four biosimilars primarily for the emerging market. In addition to that we are in the development. As I shared in my script, we signed a deal for Rituximab for the United States and we hope we will do it by ourselves. So, and Rituximab is going to be our first global products and we have right now additional three products in clinical trials as well as additional products that are in the pre-clinical stage. So overall it’s a healthy portfolio and this will cover us very nicely from about 2024 until 2031, 2032, in which we will launch all of these products.

And my last question is, have you heard any update on your Duvvada plant from the U.S. FDA?

We did not receive any feedback from the U.S. FDA as of the date, and we – normally 90 days, 90 days of — sometimes next week. So we need to — around that date we will probably get the feedback. We had the two milestone to submit certain data as part of our commitment to the response to the U.S. FDA of and going through the figure and we submitted it on time and we are awaiting the feedback and hopefully to get for those products.

That’s helpful. Thank you. I’ll get back in the queue.

Thank you. The next question is from the line of Ashwini Agarwal from Akash Ganga Investments. Please go ahead.

Hello, am I audible.

Yes, yes, please.

Yeah. Sir, my first question would be on this pre-filled syringe, which we have talked that, that would be mostly be commercialization in Q3 FY ’22. Can you just update me this status for like what is right now current situation on that part?

Sorry, we couldn’t get your question. Can you please repeat?

Yeah, sure. So the question is on with the bag fill crash team, which we have the prefilled syringe which we have been, we’ll be launching in Q3 FY ’22. So can you just update me with this status right now.

Currently, it is with Fresenius. For the U.S. and Europe market we have a deal with Fresenius and basically they have, I think guided for calendar 2022 launch. So as of now that’s the status.

Okay, okay. And my second question would be a bit odd, but actually I wanted to understand on that part. Whenever we launch the product, how, what is the average duration at which we can command the premiumization compared to when that it becomes, you can say a normal or a pricing product?

No, I don’t think we will be able to comment on that part.

Okay, okay, no issue. Thank you, thank you so much.

Thank you. The next question is from the line of Surya Narayanan from Phillip Capital. Please go ahead.

Yeah, thank you for this opportunity. Sir, just on the pricing erosion situation in the U.S., is it largely to Dr. Reddy specific that double-digit kind of price erosion situation? And possibly could be because for more number of Para 3 launches by you. Is that the situation or it is broad based double digit kind of price erosion that you have experienced in the U.S.

Its the business model in the United States. So naturally every company is facing price erosion. I think the proportion of the price erosion is very much based with how many of your products are facing [Technical Issues] and what is the timing in which the customers are issuing their RFTs [Phonetic] In our case we had the — we launched, let’s say in the last three years about 80 products in the United States. So naturally these products by design will face competition that allows the proportion out of the entire basket. So, and let’s say that’s why percentage per se is less for me at least to indicator of the health of the business. The health of the business the way I dictate it is growth and EBITDA and ROCE. And so far it’s pretty healthy and we are maintaining the margins and even growing a little bit in the United States, despite those revenues.

Sure sir. Sir, the second point is on the, let’s say, U.S. has so far been the dominant revenue contributor and earning contributor for us, but in the recent times we have obviously thought about diversifying our focus towards emerging market, new markets like China and all. And also accordingly reducing the R&D spend focus targeted for the U.S. market. So let’s say five-year down the line, is it fair to believe, Sir, the share of North America — revenue share of the North America will be meaningfully different than what currently it is.

Indeed you described our strategy for the last four years, and so we are investing in other markets for growth, thus India and emerging markets and this is providing us — by using the same fixed assets. So it’s based on the portfolio of assets, our knowledge, etc. So this is allowing us more goals, more [Indecipherable] And yes, I think it’s fair to say that these markets will grow faster than here. So, the United States will continue to be an important market for us and just want to emphasize what I mean, and we will continue to invest in growing in the United States.

And the other markets, emerging market, India will grow faster than the United States. So therefore then the average weight to United States will decrease, is decreasing already and will decrease over time. And the capital allocation is done accordingly to the diversification report.

Okay, just last one question, sir, on this generic Revlimid. So whether we are seeing — see we have already launched the product in Canada and that is also kind of influencing size market for this product. So whether we have seen the appropriate number of — or the kind of revenue that we would want, the product could have generated out of Canada market, whether we have achieved the right size revenue out of it as if it or will take longer time to achieve the peak potential out in the market from Revlimid?

Yeah, in Canada, that will take a bit longer because the way that the Canadian process is what historically each one of the relevant provinces in Canada and then for each one of them to participate in the relevant sales processes, say with the tenders or other mechanism in which each one of the states is providing, so both is expecting a bit longer and it’s not the day one launch that you have seen in the United States in that respect. In any case, the launch in the U.S. and the launch in Canada are unrelated as the launch in the U.S. in spite of the settlement in Canada is naturally, it’s really market situation. And so I would not draw any kind of — it’s not the same situation. I would not draw any conclusion from one market to another. Last but not least, we are going to launch this product not just in Canada and the United States, we are going to launch it also in Europe as well as in some emerging market, so this is going to be a little bit product cost.

Sure, Sir. Okay, thank you. Wish you all the best.

Thank you. The next question is from the line of Sameer Baisiwala Morgan Stanley. Please go ahead.

Hi, thank you very much, and good evening to everyone. So the first question is for Icosapent, which is Vascepa in the U.S. So good job done on the market share gain. I think it’s now stabilizing around 11%, 12% for last few weeks. So have we reached the peak or what’s the outlook over here? And is it the supply that is holding you back?

I think we, and — I think that the product is going well and we are planning to continue to do well also in the next quarters to come. There is still a lot of market share to gain with this product as the innovator is still holding nice market share. And the — and in terms of supply, it is not constraining us any such.

So then why is the market share in early double digit and not much higher if supply is not holding you back? So what’s the roadblock?

The outlook globe is the desire of customers who take the product from us.

Okay. But, Sir, that’s little counterintuitive because generic is lower cost, lower priced. So most of the time customers are too happy to take generic product. Is there anything different over here?

No, nothing different here.

Okay, okay, that’s fine, Sir. Sir, the second question is, is on the Russia, Ukraine business. Given the geopolitical situation, what’s your read of the situation? Have you seen any disruption or any problem in the business that you are doing over there?

So Ukraine, Russia situation is beyond my paycheck. But, we are, we both — Russia is a very important market for us, will continue to be an important market for us and there — and if there will be any, hopefully not, I wish not. But if there will be any adverse events, we’ll have to accordingly be prepared for which, and we are. But I wish that it will be only peace in the world and calmness.

So far have you seen any impact on the business.

Okay, great. Sir, one final question, if I may, which is on your health tech platform. Is there any update away here? How has been the progress? Anything you can share on the physical infrastructure that you have built, especially for online pharmacy fulfillment and diagnostic side and how many cities have you rolled out? What’s the plan going forward for next four to six quarters?

Sure. It is growing very nicely. We basically are in the last stages of finishing the pilot. We are now present in five cities, going to 10 in the next few weeks. And this will cover, of course, the main cities of India, Including Mumbai and Delhi. And accordingly will be the rollout of the companies that join this platform. So there are many ways to grow this businesses by convincing the companies to work with us and give treatment to their employees and basically insured by our insurance in this format. And of course, rolling out a good service of — by physicians, as well as by other vendors to provide excellent service. This is very, very neat project and I’m very proud of the beginning and we believe that deliver is very much. It’s a good thing for us and I believe it’s a very good thing for India as whole.

Okay, great. Thank you so much.

Thank you. The next question is from the line of Shyam Srinivasan from Goldman Sachs. Please go ahead.

Hi, good evening, and thank you for taking my question. Just the first one is on the PSAI business. In your opening remarks, Erez, you had mentioned we expect performance to improve quarter-on-quarter. What’s driving that optimism? I remember last quarter we had the issue of inventory destock from some of our customers. So just can you help us understand the dynamics in the PSAI business?

Sure. If we are taking out, like to call it COVID related behaviors by companies and take business, especially its consumption, the main driver of course will be the launches that will be in the marketplace of FY ’23, FY ’24 and FY ’25 by the customer, both by internal use as well as external use. And if we [Indecipherable] meaning, the top of products that used to drive this, which are going to be changed by products that will be launched in this area, which will be one more profitable and second, biggest in the size. This will drive the growth on the base LPI [Phonetic] PCI is comprised also on the CDMO activities that are lightly picking up and we very much believe in it. So most of the ceiling that is down now with small projects which are in Phase 1 and early Phase II, and actually some of these projects will come to Phase III and beyond that and, of course sale which goes by the CDMO type of the business which is as I discussed in the first part of our writing to activities and in sitting and picking up. The sales is — we are selling the B2B in the PCI and its picking up and with launches of pharmaceutical product that we are serving in Japan as well as in some Middle Eastern and African countries. So the combination of the three should grow PCI in the future.

Got it. That’s very helpful. And is it early days? And if so, can you quantify some of the non-API sections in the PSAI, CDMO, the projects that you’re talking about?

At this stage, the two sections are not big and we are not going to be PSAI specifics proportion, but they are not big. They will be, but they will be more and more meaningful and the — so right now still most of the — most of the PCL comprise of API, of the API persistence. And in the case of Q2, it was comprising some COVID sales as well, so which was not there in that magnitude in Q2. So some of the sequential trend is related to COVID.

Got it, helpful. Second question is on the Sputnik, I missed some of the early comments. You said we are actively looking to register Sputnik Light as a booster, right? And the trial we are doing it as just to — was the reason for doing the trial with other vaccines?

Yeah, we will — we will — we’ll have to get approval from the authorities here in India for the protocol of the trial. And based on the pending date of that protocol, we will have the trial with other vaccines, so it will serve us another option for private as well as the government for any booster in the future. We believe that boosters will be part of our life and we’ll have to take it one or twice a year now, and we believe that we want to build further.

Hot it. Helpful, Erez. Last question. Again on your opening remarks, you are now net cash M&A. Can you just help us understand what those therapy areas or is there a geographical flattish [Phonetic] swell. Which are some of the assets or products that you will be looking to acquire?

So we are looking for opportunities in all of our spaces, all the geographies. India, naturally as well as emerging market, United States and Europe, in all of those geographies there are now active projects. Some of them can be faster and within the next few weeks, if of course will be concluded, and some of them may be later. The nature of the capital location will be the same as we discussed in the past. We are not in the shopping spree. We see it as complementary to our organic goals. At the same time, because we have a very comfortable financial situation, we are planning to use that. So now let’s see which of the projects will be, actual eventually come to conclusion. But likely that we will see multiple deals in the next coming months.

Got it. Thank you so much, Erez, and all the best.

Thank you. Thank you. The next question is from the line of Ashish Topdar from Motilal Oswal Asset Management. Please go ahead.

Yeah, thanks for the opportunity. Sir, on the Sputnik you said, obviously, we have got permission from the government to export. Can you quantify the doses that we are planning to export? Or we’re open to export any amount of there is a restriction?

No restrictions I cannot specify now specific number, but there are no restrictions that prevent us as the output.

Okay, but the, but the — these numbers will be reflected in fourth quarter you believe so?

We’d say it depends on the type of [Indecipherable] allow for the product. For example, we say Sputnik Light will be approved eventually as a vaccine and subsequent will get as a booster, so will be as a booster for other products and we look in WHO. If all of this will happen, it can create a nice opportunity for us. And of course, the quantities will be accordingly. So it depends, of course, on the type of approval that is available for this market at this particular time.

Okay, okay. So just to get this thing clear, you cannot export till you get some sort of approvals from various agencies. Is that a right understanding?

No, no, we can export export. Export is — we can export, but naturally our customers will not buy a product that is not approved for use in the relevant markets, for the relevant patients, if I want to use it. So it has to be approved in that specific country for the use either as a vaccine or as a booster, and this is where the — from from there we’ll derive the quantities.

Okay. But, Sir, as you understand, this product is approved from most of the Scandinavian countries. So how about that?

This is not a part of our agreement with Russia. So this will come directly from Russia, not from us, to these type of markets.

Okay, yeah. Got it. Sir, next question was on this Pegfilgrastim. So earlier participant asked to this, but I missed it. We were supposed to launch in quarter three, right, through Fresenius Kabi. So we have launched the product or there is a delay? And if the delay is there, why so.

I did not get the questions.

Yeah, so Ashish, basically Fresenius has mentioned or indicated basically calendar 2022, is when you expect to launch the product in both U.S. and Europe market.

So do you say that we are just, we are still two to three quarters, probably two, three quarters away from the launch?

No, they have not specified the quarter, but maybe next one or two quarter it may happen, but obviously we don’t have the specific date.

Okay, fair enough. So just last question on this price erosion in the U.S., it’s been quite a while since we have price erosion. But as the investors understood, we felt that by the end of March of be intensity of the price erosion should gradually start coming off. So in your experience and what do you see in the market, would you be on similar lines? Would you also say that price erosion intensity would eventually come off by end of March?

As I mentioned before, price erosion and the magnitude of the price erosion not a top-down, it’s bottom up, meaning which depends on the product that is facing that weekly competition. And in our case, most of our portfolio faced it, and so likely that we are not going to see another round for these specific products and hence will probably calm down. So it’s not the top down, it’s a bottom-up and this from their comment this [Technical Issues]

Mr. Akolkar, your line is unmuted. Please proceed with your question.

Yes, thank you. Thank you for the opportunity. I have a question on the Chinese market. So recently, we have seen there have been lockdowns in several provinces. So how has been our performance in the recent quarters [Technical Issues]

We can move on.

Sure sir. We take the next question from the line of Kunal Dhamesha from Emkay Global. Please go ahead.

Yeah, thank you for the opportunity again. So on Pegfilgrastim, we are seeing that we are not, and once again happening in next one or two quarter. But have we supplied any initial inventory to Fresenius Kabi or it will happen once the approval comes down? And I assume that it will also take time, right? It’s already not supplied.

So just to strengthen. As part of the deal [Technical Issues] and therefore we are just ahead of the certain financial arrangements with Fresenius. Once they will go, we will enjoy the extreme of the value of that will come from their launch. So we are not supplying and not involved in the launch and we are not aware of the date and we are going to be advised by then when they will be decide to do this.

Okay, sure. Thank you.

The next question is from the line of Sameer Baisiwala from Morgan Stanley. Please go ahead.

Yeah, thanks for the follow-up. I hope my voice is audible. There seems to be some disruption. So just one final question. How are you thinking about your injectable portfolio for the U.S. market? As in how many ANDAs have been filed? And are there any complex long-acting type, micro spore type product, peptide products that you’ve done the filing? And when can we start to see the approval cycle begin for these?

So, it’s naturally very important to us, not just in the U.S., but also globally. And the answer is yes. We do have these complex generic assets I spoke a bit, some of it took long time to develop, some we are still in development. Overall, the injectable and the complete generic will drive the growth in the United States on the generic product and it will grow faster than the retail product.

Sir, very specifically, have you filed some of these high value complex injectables?

We did file some high value complex injectable, yes.

Okay. And the PAI done Duvvada. Does it relate to one such product?

Some of these products are coming from Duvvada, yes.

No, no, sir. The question is, is the PAI, pre-approval inspection done by FDA? Was it related to one such complex large injectable product?

The PAI was not related to specific products like that, but naturally when we have the PAI, they’re not checking only the specific products, they’re checking the entire site.

Okay, got it, got it. Yeah, thank you so much.

Thank you. Ladies and gentlemen, we take the last question from the line of Alok Dalal from CLSA. Please go ahead.

Yeah, good evening. Taking Sameer’s question forward on Duvvada. Would you — would you still expect to grow in the U.S. next year if there is an adverse observation on Duvvada from the FDA?

Firstly, Hi, Alok. First, we hope not to have this adverse affect. And the secondly is at this stage we’re not looking for scenarios that we don’t have the sties. But these sites are very, very important on the growth in the United States, not just next year, but also in the years to come. Okay. And, Erez, any update on NuvaRing? Internally, have you decided to go ahead with the launch or drop it? We did not finish all the evaluation, but unlikely that you’ll see launch in the next few months.

All right. And lastly, any update on Copaxone?

It’s still in process. It’s now in the FDA’s court. The ball is in their court. Meaning, that we submitted all the relevant information and we are waiting for the response. Again, I I believe that at least I don’t think likely to see a launch in the next few months.

Got it. Okay, thank you very much for taking my questions.

Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to the management for closing comments.

Thank you all for joining us today for the earnings call. In case of any further queries, please reach out to the Investor Relations team. Thank you.

[Operator Closing Remarks]

This transcript is produced by AlphaStreet, Inc. While we strive to produce the best transcripts, it may contain misspellings and other inaccuracies. This transcript is provided as is without express or implied warranties of any kind. As with all our articles, AlphaStreet, Inc. does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company’s SEC filings. Neither the information nor any opinion expressed in this transcript constitutes a solicitation of the purchase or sale of securities or commodities. Any opinion expressed in the transcript does not necessarily reflect the views of AlphaStreet, Inc.

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Refer page no. 2 for EBITDA computations.

Earnings Call Details (07:30 pm IST, 10:00 am EDT, Oct 27, 2023)

The management of the Company will host an Earnings call to discuss the Company’s financial performance and answer any questions from the participants.

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Play Back: The play back will be available after the earnings call, till Nov 3 rd , 2023. For play back dial in phone No: +91 22 7194 5757, and Playback Code is 02796.

Transcript: Transcript of the Earnings call will be available on the Company’s website: www.drreddys.com

About Dr. Reddy’s: Dr. Reddy’s Laboratories Ltd. (BSE: 500124, NSE: DRREDDY, NYSE: RDY, NSEIFSC: DRREDDY) is a global pharmaceutical company headquartered in Hyderabad, India. Established in 1984, we are committed to providing access to affordable and innovative medicines. Driven by our purpose of ‘Good Health Can’t Wait’, we offer a portfolio of products and services including APIs, generics, branded generics, biosimilars and OTC. Our major therapeutic areas of focus are gastrointestinal, cardiovascular, diabetology, oncology, pain management and dermatology. Our major markets include – USA, India, Russia & CIS countries, China, Brazil, and Europe. As a company with a history of deep science that has led to several industry firsts, we continue to plan and invest in businesses of the future. As an early adopter of sustainability and ESG actions, we released our first Sustainability Report in 2004. Our current ESG goals aim to set the bar high in environmental stewardship; access and affordability for patients; diversity; and governance. For more information, log on to: www.drreddys.com .

Disclaimer : This press release may include statements of future expectations and other forward-looking statements that are based on the management’s current views and assumptions and involve known or unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. In addition to statements which are forward-looking by reason of context, the words "may", "will", "should", "expects", "plans", "intends", "anticipates", "believes", "estimates", "predicts", "potential", or "continue" and similar expressions identify forward-looking statements. Actual results, performance or events may differ materially from those in such statements due to without limitation, (i) general economic conditions such as performance of financial markets, credit defaults , currency exchange rates , interest rates , persistency levels and frequency / severity of insured loss events (ii) mortality and morbidity levels and trends, (iii) changing levels of competition and general competitive factors, (iv) changes in laws and regulations and in the policies of central banks and/or governments, (v) the impact of acquisitions or reorganization , including related integration issues, and (vi) the susceptibility of our industry and the markets addressed by our, and our customers’, products and services to economic downturns as a result of natural disasters, epidemics, pandemics or other widespread illness, including coronavirus (or COVID-19), and (vii) other risks and uncertainties identified in our public filings with the Securities and Exchange Commission, including those listed under the "Risk Factors" and "Forward-Looking Statements" sections of our Annual Report on Form 20-F for the year ended March 31, 2022. The company assumes no obligation to update any information contained herein.” The company assumes no obligation to update any information contained herein.

INVESTOR RELATIONS RICHA PERIWAL [email protected]

MEDIA RELATIONS USHA IYER [email protected]

Release Summary

Dr. Reddy’s Laboratories Ltd. today announced its consolidated financial results for the quarter ended Sep 30, 2023.

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Dr. Reddy's Laboratories Limited

Ine089a01023, pharmaceuticals, dr reddy laboratories : . reddy's investor presentation - sep 2023.

INVESTOR PRESENTATION

September 2023

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, 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.

Dr. Reddy's at a glance

nationalities

Note: The map is not to scale and is an artistic representation.

We accelerate access to affordable and innovative medicines because

Good Health Can't Wait.

689 mn patients reached globally

$2.99 bn Revenue

15% Revenue Growth

~30% EBITDA%

24,832 Employees globally

30 Plants (Manufacturing & R&D)

All information as of FY23

Our Journey

Expanded internationally

by establishing presence in Russia and the U.S. by the mid-1990

Dr. Anji Reddy established Dr.

Reddy's Laboratories

1 st Indian company to initiate new drug

discovery (1993)

1 st Indian pharma company to launch an Authorized Generic (AG) in the U.S

Became fastest Indian pharma company to cross USD 1 bn in revenue

Launched the world's first monoclonal

antibody biosimilar of rituximab in India

Launched the world's first and India's only generic of darbepoetin alfa (Cresp)

Acquired portfolio of Belgium- based UCB's established brands in certain South Asian countries

Acquired German medical cannabis company, Nimbus - segment-wise, a

1 st for an Indian pharma company

1 of 2 Indian pharma cos to be recognised by World Economic Forum as part of its Global Lighthouse Network for Hyderabad facility

5+ million patients served during COVID - therapeutics & vaccine

Acquired select divisions of Wockhardt in India

Dr. Reddy's went public (BSE) (1986)

1 st Indian company to export APIs to the USA at scale (Late 80s onwards)

Indian pharma company to license a novel drug to an innovator

1 st Indian pharma company to obtain 180- day marketing exclusivity from the USFDA (fluoxetine 40mg)

1 st pharma company in Asia outside Japan to list on the New York Stock Exchange

Entered the nutraceuticals segment in India (Celevida)

1 st Indian pharma company to get approval for supplying generic drugs to China's public hospitals

1 st Indian & 3 rd Asian company to join

Science-Based targets initiative (SBTi)

1980s 1990s

OUR STRATEGY

Progressing on our journey by…

STRENGTHENING OUR CORE

Biosimilars OTC

(GROWTH DRIVERS IN SHORT TO MEDIUM TERM)

INVESTING IN INNOVATIVE SPACES

(GROWTH DRIVERS IN SHORT TO LONG TERM)

…to deliver on our aspirations

Our Approach

LEADERSHIP IN CHOSEN SPACES

With patients at the center, our execution is driven by three pillars of Market Leadership, Productivity and Innovation

• Focus on 'products that matter'
• Economy of scale, complex brands and clinically differentiated products

To Serve 1.5Bn+ patients

STRATEGY IN ACTION :

BUSINESS OVERVIEW

Global Revenues

For the fiscal year 2023 (Apr'22 to Mar'23)

Attachments

• Original Link
• Original Document

Dr. Reddy's Laboratories Limited published this content on 12 April 2024 and is solely responsible for the information contained therein. Distributed by Public , unedited and unaltered, on 12 April 2024 10:01:06 UTC .

Latest news about Dr. Reddy's Laboratories Limited

Chart dr. reddy's laboratories limited.

Company Profile

Income statement evolution, ratings for dr. reddy's laboratories limited, analysts' consensus, eps revisions, quarterly earnings - rate of surprise, sector other pharmaceuticals.

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• News Dr. Reddy's Laboratories Limited
• Dr Reddy Laboratories : . Reddy's Investor Presentation - Sep 2023

Dr Reddy's Laboratories Ltd

Performance

Hasn't fared well - amongst the low performers

Seems to be overvalued vs the market average

Financials growth has been moderate for a few years

Profitability

Showing good signs of profitability & efficiency

Entry point

The stock is overpriced but is not in the overbought zone

No red flag found

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Financial Statements

Balance Sheet

What is an income statement?

The income statement indicates a company's financial performance measured over a reporting period. Performance is assessed by summarising how the business incurs its revenues, expenses and net profit or loss incurred over the period. It's also called the P&L statement

Income Statement

Higher than industry revenue growth a higher-than-industry revenue growth represents increased potential for the company to increase their market share.

Over the last 5 years, revenue has grown at a yearly rate of 12.28%, vs industry avg of 8.33%

Increasing Market Share Market share is the percentage of an industry's total sales going to a particular company. It gives a general idea of the size of a company v/s its competitors

Over the last 5 years, market share increased from 7.1% to 7.89%

Higher than Industry Net Income Net income is equal to net earnings (profit) less expenses. This number is an important measure of how profitable the company is

Over the last 5 years, net income has grown at a yearly rate of 36.63%, vs industry avg of 9.77%

EPS and DPS in ₹. Other numbers except Payout Ratio in ₹ cr

Company Updates

Annual report

Investor Presentation

• DR. REDDY'S LABORATORIES LTD.
• SECTOR : PHARMACEUTICALS & BIOTECHNOLOGY
• INDUSTRY : PHARMACEUTICALS

Dr. Reddy's Laboratories Ltd.

NSE: DRREDDY | BSE: 500124

Mid-range Performer

5868.80 -39.75 ( -0.67 %)

33.87% Gain from 52W Low

244.4K NSE+BSE Volume

NSE 14 May, 2024 3:31 PM (IST)

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Operating Revenue TTM

Market Runner Up

Net profit TTM

Net Profit Margin TTM %

Revenue Growth (TTM)

Above industry Median

Net Profit TTM Growth %

Below industry Median

Dr. Reddy's Laboratories Ltd. Quarterly Results and Financial Statement as of today

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Dr Reddy's Laboratories Ltd ADR

Dr. reddy’s earnings: wraps up 2024 on strong footing, and long-term outlook looks more favorable.

No-moat Dr. Reddy’s reported fourth-quarter earnings that came in higher than we expected. Total sales were up 12.5% year over year as demand and prescription utilization trends continue their strong momentum and help the firm end its fiscal year on a strong note. On top of solid performance, Dr. Reddy’s was busy during the quarter with a number of notable highlights, including a launch of Versavo, biosimilar of Avastin (bevacizumab), in the UK that marks the firm’s first entrance in the region’s biosimilar market. Management also spent some time during the call discussing investments in fueling its biosimilars pipeline. We think this is a sound strategy given our positive long-term outlook on the biosimilars market, particularly the US, and we think Dr. Reddy’s is well positioned to utilize its scale and low-cost manufacturing to carve out a share in the marketplace. While we now expect higher operating expenses in later years of our valuation model as we believe the firm needs to allocate higher spending in both research and development and selling, general, and administrative to ramp up its pipeline, we think this will be more than offset by higher gross margin that biosimilars and complex generics carry. After updating our fiscal 2024 numbers as well as ticking up our long-term outlook for the firm, we raise our fair value estimate to $60 from $54 per share.

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The Unique Burial of a Child of Early Scythian Time at the Cemetery of Saryg-Bulun (Tuva)

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Pages:  379-406

In 1988, the Tuvan Archaeological Expedition (led by M. E. Kilunovskaya and V. A. Semenov) discovered a unique burial of the early Iron Age at Saryg-Bulun in Central Tuva. There are two burial mounds of the Aldy-Bel culture dated by 7th century BC. Within the barrows, which adjoined one another, forming a figure-of-eight, there were discovered 7 burials, from which a representative collection of artifacts was recovered. Burial 5 was the most unique, it was found in a coffin made of a larch trunk, with a tightly closed lid. Due to the preservative properties of larch and lack of air access, the coffin contained a well-preserved mummy of a child with an accompanying set of grave goods. The interred individual retained the skin on his face and had a leather headdress painted with red pigment and a coat, sewn from jerboa fur. The coat was belted with a leather belt with bronze ornaments and buckles. Besides that, a leather quiver with arrows with the shafts decorated with painted ornaments, fully preserved battle pick and a bow were buried in the coffin. Unexpectedly, the full-genomic analysis, showed that the individual was female. This fact opens a new aspect in the study of the social history of the Scythian society and perhaps brings us back to the myth of the Amazons, discussed by Herodotus. Of course, this discovery is unique in its preservation for the Scythian culture of Tuva and requires careful study and conservation.

Keywords: Tuva, Early Iron Age, early Scythian period, Aldy-Bel culture, barrow, burial in the coffin, mummy, full genome sequencing, aDNA

Information about authors: Marina Kilunovskaya (Saint Petersburg, Russian Federation). Candidate of Historical Sciences. Institute for the History of Material Culture of the Russian Academy of Sciences. Dvortsovaya Emb., 18, Saint Petersburg, 191186, Russian Federation E-mail: [email protected] Vladimir Semenov (Saint Petersburg, Russian Federation). Candidate of Historical Sciences. Institute for the History of Material Culture of the Russian Academy of Sciences. Dvortsovaya Emb., 18, Saint Petersburg, 191186, Russian Federation E-mail: [email protected] Varvara Busova  (Moscow, Russian Federation).  (Saint Petersburg, Russian Federation). Institute for the History of Material Culture of the Russian Academy of Sciences.  Dvortsovaya Emb., 18, Saint Petersburg, 191186, Russian Federation E-mail:  [email protected] Kharis Mustafin  (Moscow, Russian Federation). Candidate of Technical Sciences. Moscow Institute of Physics and Technology.  Institutsky Lane, 9, Dolgoprudny, 141701, Moscow Oblast, Russian Federation E-mail:  [email protected] Irina Alborova  (Moscow, Russian Federation). Candidate of Biological Sciences. Moscow Institute of Physics and Technology.  Institutsky Lane, 9, Dolgoprudny, 141701, Moscow Oblast, Russian Federation E-mail:  [email protected] Alina Matzvai  (Moscow, Russian Federation). Moscow Institute of Physics and Technology.  Institutsky Lane, 9, Dolgoprudny, 141701, Moscow Oblast, Russian Federation E-mail:  [email protected]

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Out of the Centre

Savvino-storozhevsky monastery and museum.

Zvenigorod's most famous sight is the Savvino-Storozhevsky Monastery, which was founded in 1398 by the monk Savva from the Troitse-Sergieva Lavra, at the invitation and with the support of Prince Yury Dmitrievich of Zvenigorod. Savva was later canonised as St Sabbas (Savva) of Storozhev. The monastery late flourished under the reign of Tsar Alexis, who chose the monastery as his family church and often went on pilgrimage there and made lots of donations to it. Most of the monastery’s buildings date from this time. The monastery is heavily fortified with thick walls and six towers, the most impressive of which is the Krasny Tower which also serves as the eastern entrance. The monastery was closed in 1918 and only reopened in 1995. In 1998 Patriarch Alexius II took part in a service to return the relics of St Sabbas to the monastery. Today the monastery has the status of a stauropegic monastery, which is second in status to a lavra. In addition to being a working monastery, it also holds the Zvenigorod Historical, Architectural and Art Museum.

Belfry and Neighbouring Churches

Located near the main entrance is the monastery's belfry which is perhaps the calling card of the monastery due to its uniqueness. It was built in the 1650s and the St Sergius of Radonezh’s Church was opened on the middle tier in the mid-17th century, although it was originally dedicated to the Trinity. The belfry's 35-tonne Great Bladgovestny Bell fell in 1941 and was only restored and returned in 2003. Attached to the belfry is a large refectory and the Transfiguration Church, both of which were built on the orders of Tsar Alexis in the 1650s.  

To the left of the belfry is another, smaller, refectory which is attached to the Trinity Gate-Church, which was also constructed in the 1650s on the orders of Tsar Alexis who made it his own family church. The church is elaborately decorated with colourful trims and underneath the archway is a beautiful 19th century fresco.

Nativity of Virgin Mary Cathedral

The Nativity of Virgin Mary Cathedral is the oldest building in the monastery and among the oldest buildings in the Moscow Region. It was built between 1404 and 1405 during the lifetime of St Sabbas and using the funds of Prince Yury of Zvenigorod. The white-stone cathedral is a standard four-pillar design with a single golden dome. After the death of St Sabbas he was interred in the cathedral and a new altar dedicated to him was added.

Under the reign of Tsar Alexis the cathedral was decorated with frescoes by Stepan Ryazanets, some of which remain today. Tsar Alexis also presented the cathedral with a five-tier iconostasis, the top row of icons have been preserved.

Tsaritsa's Chambers

The Nativity of Virgin Mary Cathedral is located between the Tsaritsa's Chambers of the left and the Palace of Tsar Alexis on the right. The Tsaritsa's Chambers were built in the mid-17th century for the wife of Tsar Alexey - Tsaritsa Maria Ilinichna Miloskavskaya. The design of the building is influenced by the ancient Russian architectural style. Is prettier than the Tsar's chambers opposite, being red in colour with elaborately decorated window frames and entrance.

At present the Tsaritsa's Chambers houses the Zvenigorod Historical, Architectural and Art Museum. Among its displays is an accurate recreation of the interior of a noble lady's chambers including furniture, decorations and a decorated tiled oven, and an exhibition on the history of Zvenigorod and the monastery.

Palace of Tsar Alexis

The Palace of Tsar Alexis was built in the 1650s and is now one of the best surviving examples of non-religious architecture of that era. It was built especially for Tsar Alexis who often visited the monastery on religious pilgrimages. Its most striking feature is its pretty row of nine chimney spouts which resemble towers.

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635th Anti-Aircraft Missile Regiment

635-й зенитно-ракетный полк

Military Unit: 86646

Activated 1953 in Stepanshchino, Moscow Oblast - initially as the 1945th Anti-Aircraft Artillery Regiment for Special Use and from 1955 as the 635th Anti-Aircraft Missile Regiment for Special Use.

1953 to 1984 equipped with 60 S-25 (SA-1) launchers:

• Launch area: 55 15 43N, 38 32 13E (US designation: Moscow SAM site E14-1)
• Support area: 55 16 50N, 38 32 28E
• Guidance area: 55 16 31N, 38 30 38E

1984 converted to the S-300PT (SA-10) with three independent battalions:

• 1st independent Anti-Aircraft Missile Battalion (Bessonovo, Moscow Oblast) - 55 09 34N, 38 22 26E
• 2nd independent Anti-Aircraft Missile Battalion and HQ (Stepanshchino, Moscow Oblast) - 55 15 31N, 38 32 23E
• 3rd independent Anti-Aircraft Missile Battalion (Shcherbovo, Moscow Oblast) - 55 22 32N, 38 43 33E

Disbanded 1.5.98.

Subordination:

• 1st Special Air Defence Corps , 1953 - 1.6.88
• 86th Air Defence Division , 1.6.88 - 1.10.94
• 86th Air Defence Brigade , 1.10.94 - 1.10.95
• 86th Air Defence Division , 1.10.95 - 1.5.98