In Q3, Dr. Reddy’s reports consolidated loss of ₹570 cr.

Impairment charges, bitter pill for the pharmaceutical firm

Dr. Reddy’s Laboratories Ltd. has posted a consolidated loss of ₹570 crore during the third quarter of the current financial year.

The company had reported a ₹485 crore net profit during the corresponding quarter of the previous fiscal. Total revenue grew by 14% to ₹4,384 crore from the ₹3,850 crore reported during the year-ago period.

“The profits were impacted due to a trigger-based impairment charge taken on a few products, including generic gNuvaring.

The current quarter’s performance has been good across all our businesses and we achieved strong EBITDA margins,” said Saumen Chakraborty, chief financial officer, DRL, adding the erosion in the value of gNuvaring led to an impairment charge of ₹1,113 crore while the same for other products was ₹206 crore, taking the total impairment to ₹ 1,320 crore.

The company, however, achieved the highest-ever quarterly revenue without any one-offs during the third quarter.

This could be seen from the fact that earnings before interest, tax, depreciation and amortisation grew by 24.1% while margin rose by 24.5%. Profit before tax would be at ₹793 crore, excluding the impairment.

DRL registered an increase in revenue from India, Europe, North America and emerging markets driven by new product launches. It ended the quarter with a net cash surplus of ₹414 crore and was considering inorganic growth in some spaces as an option.

The expenditure on R&D was ₹395 crore accounting for 9% of sales. It had filed three abbreviated new drug applications with the USFDA during the quarter.

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Printable version | Feb 17, 2020 2:10:49 AM |

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