Dr. Reddy’s Laboratories (DRL) on Thursday announced a net profit of Rs. 336 crore in the first quarter ended June 30, 2012,, up 28 per cent from the corresponding quarter in the last fiscal, that stood at Rs. 263 crore.
At a press conference, the company’s Chief Financial Officer, Umang Vohra said the company’s revenues grew at 28 per cent too, up from Rs. 1,978 crore to Rs. 2,541 crore as of June-end, attributing the growth to expansion in the domestic and global markets.
DRL’s net profits were however offset by a 23 per cent increase in selling, general/administrative expenses on account of hikes in salary/increments, higher sales and marketing costs and importantly, the effect of rupee depreciation against different currencies. Revenues from North America, that had grown 28 per cent at Rs. 790 crore were less sequentially, but that was on expected lines, he added.
President and Head of the company’s Global Generics division, Abhijit Mukherjee said margins were expected to come under pressure with increasing competition and price erosion. However, he added that exciting launches in the United States, numbering about 15 products, were lined up in the fiscal 2012-13.
DRL’s Russian and German markets had witnessed appreciable growth, but the domestic market’s growth of 19 per cent was important too, as it had outpaced the standard market growth. He informed that Betapharm, its German arm had turned around and while it was managing its own cashflows, the market continued to be challenging.
In what was considered encouraging, the company hinted that the existing ‘import alert’ notified by the United States Food and Drug Administration, on DRL’s Mexico plant was soon to be lifted. After a recent inspection, the FDA was said to have closed the warning letter.
