Dr.Reddy’s Laboratories has posted a consolidated net profit of Rs.308.9 crore for the quarter ended September 30, a drop of 60 per cent compared to Rs.774.7 crore in the year ago period.
The total income dropped 10 per cent to Rs.3,616.3 crore (Rs.4,020.7 crore). Price erosion and lower sales were behind the performance, particularly a 12 per cent decline in its global generics business. Barring India, with a growth of 14 per cent, the revenue from all other market segments went down. The drop was 27 per cent in the Emerging Markets, 16 per cent in Europe and 13 per cent in the North America.
The results, on Tuesday, saw the pharma company stock gaining Rs.110.85 or 3.59 per cent to close at Rs.3,200.45.
President and CFO Saumen Chakraborty and COO Abhijit Mukherjee, addressing presspersons, said while the headwinds in the emerging markets had died down, they would continue on the pricing front in the US.
On the warning letter US Food and Drug Administration had issued last November with regard to a few facilities in Andhra Pradesh and Telangana, they said considerable progress had been made on the remediation front. Pegging the overall cost of remediation, for which an external consultant was also engaged, at under $ 40 million, the senior executives said the company has written to the regulator to inspect the facilities.
Stating that not much has changed in Venezuela, where post the currency and repatriation issues Dr.Reddy’s has stopped selling, Mr.Mukherjee said the company was in touch with the government there to get the payment. As part of an emphasis on expanding in the emerging markets, company has forayed into Columbia and looking at Brazil. “We will try to increase the footprint in one or two [new] countries every year,” he added.
Besides increased penetration in the emerging markets, the company, Mr.Chakraborty said, would focus on achieving the targeted development with regard to complex generics and speciality products.
Co-chairman and CEO G.V. Prasad, in a release, said all “our major businesses have shown sequential improvement over the previous quarter. Looking ahead, we will continue to focus on launching new products in our generics business, improving productivity and strengthening our quality management systems.”
