Dr Reddy's profits decline by 7.09 percent

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SME Times News Bureau | 30 Jan, 2015
Pharmaceuticals major Dr. Reddy's consolidated net profits declined by 7.09 percent due to muted growth in the US, increased in expenses and impairment charges.

Its net profit was Rs.574.53 crore for the quarter ended Dec 31, against Rs.618.42 crore during the same time period last fiscal. Consolidated net sales were up by 8.75 percent at Rs.3,843.10 crore during the quarter compared to Rs.3,533.76 crore in the third quarter of the last fiscal.

The operating margin for the company stood at 18.8 percent with an EBITDA of Rs.1,050 crore.

Its revenue from the global generics segment grew at 7.81 per cent to Rs.3,169.22 crore in the third quarter of the current fiscal compared to Rs.2,939.58 crore in the same period of the previous fiscal.

Selling, general and administrative expenses were Rs.1,120 crore, 29 percent of the revenue. The research and development (R&D) expenses were at Rs.430 crore, 11.2 percent of revenues as against 8.4 percent during previous quarter. The R&D expenses grew by 45 percent year-on-year.

"This increase in is line with our planned scale-up in development activities," said Abhijit Mukherjee, chief operating officer, Dr Reddy's.

Talking to reporters, he also attributed the decline in profit to impairment charge of Rs.53.4 crore during the quarter.

The growth in sales in the US, which is the company's biggest market, remain muted.

Revenues from North America were Rs.1,680 crore, a year-on-year growth of four percent. The revenues from emerging markets at Rs.860 crore, grew by 16 percent year-on-year.

Revenues from Russia declined by nine percent due to the rouble depreciation while the revenues from Venezuela grew by 185 percent.

Saumen Chakraborty, the chief financial officer, said India accounted for Rs.430 crore revenues, a year-on-year growth of 11 percent.

The company launched 13 new products including six launches in US. It filed 18 new product registrations and 14 DMFs globally.

During the quarter, the company completed the acquisition of Habitrol franchise, an over-the-counter nicotine replacement therapy transdermal patch from Novartis Consumer Health Inc. for $80 million and began marketing the product in the US.