Dr. Reddy's Laboratories' consolidated net profit declined by over 19% to ₹ 272.1 crore for the quarter ended March 2018, compared to ₹ 337.6 crore of the year-earlier period, as per results prepared under Indian Accounting Standards (Ind AS).
Pressure on margins, increased competition and adverse foreign exchange impact as well as an outgo stemming from the Tax Cuts and Jobs Act of 2017 in the U.S. were factors that weighed on the company's performance during the quarter and for the full fiscal too.
Total revenue from operations of the Hyderabad-headquartered firm during the quarter was 1.60% lower at ₹ 3,553.9 crore (₹ 3,611.9 crore).
For the full fiscal, the company's registered a net profit of ₹ 946.8 crore, which was 26.72% lower in comparison to the ₹ 1,292.1 crore it had posted in 2016-17. Total revenue from operations was muted at ₹ 14,281 crore (₹ 14,196.1 crore).
CEO and co-chairman G.V.Prasad described it as a challenging year for the company with a relatively muted fourth quarter performance.
“This was mainly on account of continuing headwinds in the U.S. markets and a temporary drop in sales in Russia, attributable to a shift in the channel purchasing pattern,” he said.
Looking ahead, “we will continue to work diligently on resolving pending regulatory issues. We will also focus on accelerating new products to market and improving our approval process,” he said in a statement.
On the charges arising from the Tax Cuts and Jobs Act of 2017, the company said consequent to the enactment it re-measured the U.S. deferred tax assets and liabilities, based on the new tax law, which resulted in a charge of ₹ 39.6 crore and ₹ 126.9 crore for the quarter and year ended March 31, respectively.
On the generics business front, the mainstay of the company, barring the India market, the sales declined in other markets during the quarter. The PSAI (pharmaceutical services and active ingredients) and proprietary products segments, whose share to the overall sales is under 23%, however, grew.
400% dividend
The board of directors of the company at its meeting on Tuesday recommended a final dividend of ₹ 20 (400%) per equity share of ₹ 5 face value for 2017-18.
