Share price of a leading pharmaceutical company rose by nearly 1 percent following its announcement of plans for a stock split and a joint venture with Nestle.
Price movement
In Thursday’s trading session, the share price of Dr. Reddy’s Laboratories Ltd. reached an intra-day high of Rs.6,853 per share gaining nearly 1 percent after opening at Rs.6,795 apiece. The share price has delivered a return of more than 23 percent in a year.
Stock split
Hyderabad-based pharmaceutical company Dr. Reddy’s Laboratories Ltd. announced on Wednesday that its Board of Directors will meet on July 27, 2024, at the company’s registered office to consider the sub-division (split) of the company’s equity shares having a face value of Rs.5 each.
This marks the first instance of a stock split for the company since it became public. The last stock split occurred in October 2001, when the face value was changed from Rs.10 to Rs.5.
Joint Venture and ownership
Dr. Reddy’s Laboratories Ltd. and Nestle India Ltd. have officially launched a joint venture named Dr. Reddy’s and Nestle Health Science Ltd.
Following the joint venture agreement, Dr. Reddy’s Laboratories has transferred 49 percent of the equity share capital in the joint venture to Nestlé India. As a result, Dr. Reddy’s Laboratories now retains 51 percent of the share capital, consisting of 51,000 equity shares with a face value of Rs.10 each, while Nestlé India Limited holds 49 percent, comprising 49,000 equity shares of Rs.10 each in the joint venture company.
Dr. Reddy’s and Nestle Health Science Ltd.
The joint venture, Dr. Reddy’s and Nestlé Health Science Ltd., aims to introduce cutting-edge nutraceutical brands to consumers in India and other designated regions, harnessing the combined capabilities of both organizations.
Nestlé India will bring its renowned global portfolio of nutritional health solutions, including vitamins, minerals, herbals, and supplements from Nestlé Health Science, complemented by Dr. Reddy’s robust commercial presence across India.
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Both companies will license specific brands to the new entity, with Nestlé contributing popular brands like Nature’s Bounty and Osteo Bi-Flex, while Dr. Reddy’s will provide brands such as Rebalanz and Celevida.
The joint venture entity will have its headquarters in Hyderabad and is anticipated to commence operations in the second quarter of FY25. Its primary objective will be to enhance and broaden synergistic nutraceutical offerings across various categories, including metabolic care, hospital nutrition, general wellness, women’s health, and child nutrition.
Financials
In the quarter ending March 2024, Dr. Reddy’s Laboratories saw its revenue rise significantly by 24.5 percent to Rs.5,081.8 crores compared to the previous quarter. The company’s Profit After Tax (PAT) also experienced a substantial increase, jumping 118 percent to Rs.1,034.8 crores from Q3 FY24.
About the company
Dr. Reddy’s Laboratories is an Indian multinational pharmaceutical company that manufactures and markets a wide range of pharmaceuticals in India and overseas. The company manufactures and markets generic formulations, active pharmaceutical ingredients (APIs), biosimilars, and proprietary products.
Written by – Siddesh S Raskar
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