Dr. Reddy’s Laboratories recorded a consolidated net profit of ₹305.4 crore, in the quarter ended September 30, or 1.13% lower compared with the year earlier period. Total income was ₹3,591.4 crore, a 1.87% fall.
On a sequential basis, the pharma major recorded better growth. In the quarter ended June, total income was ₹3,371.2 crore and consolidated net profit stood at ₹66.6 crore.
CEO and co-chairman G.V. Prasad said healthy performances in India, emerging markets, Europe and PSAI businesses had contributed to sequential growth. North America revenues declined 11% year-on-year to ₹1,430 crore.Primarily, it was on account of higher price erosions due to channel consolidation and increased competition in some of the key products. Stating this, the company said it had launched four products in the quarter.
A higher contribution from Europe, India and Emerging Markets, however, helped offset much of the decline in North America. Addressing presspersons, CFO Saumen Chakraborty and COO Abhijit Mukherjee said new product launches were a way to counter balance the continuing price erosion and the company expects the U.S. market to be much better in second half of the fiscal.
To queries, Mr. Chakraborty said the process of adding capacities to the formulations and biologics manufacturing at Visakhapatnam and Bachupally in Hyderabad respectively is underway. A facility for formulations, near the existing facility, is to be commissioned next fiscal, while a biologics unit is to be commissioned next month and one more has been proposed.
On the regulatory audits, the senior executives said the USFDA was expected to conduct another audit of the Duvvada plant in the fourth quarter, while a re-audit of the Bachupally Unit-2 by EMA is likely in six-nine months. One of the key priorities for the company, Mr. Chakraborty said, was strengthening of the manufacturing and quality system and working with the regulatory agencies to address concerns raised by them.
With regard to GST, the run-up to which had impacted the performance of the company last quarter, he said there was partial recovery in the inventory holding by the distribution and marketing channel post transition to the new regime.
Dr.Reddy’s shares closed 0.07% lower on Tuesday at ₹2,431.40 apiece.
