Dr. Reddy’s net profit jumps to Rs. 217 crore

Dr. Reddy’s Laboratories (DRL) has described the reports on its take over by pharma major GlaxoSmithKline (GSK) as “speculative”.

DRL Vice-President and Chief Executive Officer G. V. Prasad said the company had entered into a strategic tie-up with the GSK for marketing its products in the emerging markets. “We share the revenues as part of the agreement,” he said reiterating that the promoters of DRL were not willing to dilute their stake in the company.

Mr. Prasad, accompanied by DRL Managing Director Satish Reddy and Chief Financial Officer Umang Vohra, announced the results of the company for the first half of the current financial year at a press conference here on Friday. The company registered consolidated revenue of Rs. 1,836.80 crore during the first half against Rs. 1,615.10 crore in the year-ago period, a growth of 14 per cent. The net profit has more than doubled to Rs. 217.30 crore from Rs. 105.20 crore and the company announced diluted earnings per share of Rs. 12.80 against Rs. 6.20.

Mr. Satish Reddy said the year-on-year growth was driven by North America where the company had registered 36 per cent growth, including high volume growth across the existing products. There was growth in revenues from Russian and Indian markets, but the company witnessed decline in sales in the German market. The company was, however, committed to continue its operations in Germany which remained a sizable market. The situation there was still evolving and the market was yet to settle and this prompted the company to change its strategy.

Explaining about the company’s initiatives, he said DRL incurred capital expenditure of $30 million in the two special economic zones it was setting up in Visakhapatnam (active pharmaceutical ingredients) and Medak (finished dosage products). The company was expected to incur a total investment close to $200 million by the time the SEZs were completed in a couple of years.