India, US drive Dr Reddy’s growth

Posts 14% jump in net profit at `625.7 cr in Q1; Revenue rises by 7% to `3,757.8 cr

Hyderabad: Driven by robust growth in Indian and the US markets, Dr Reddy’s Laboratories Limited posted better-than-expected financial results for the first quarter ended on June 30 with its net profit for the three month period climbing by 14 per cent to Rs 625.7 crore. The pharma major reported Rs 550.4 crore in the corresponding period a year ago.

However, the company managed to increase the revenues by just seven per cent to Rs 3,757.8 crore owing to slowdown in Russia and depreciation in its currency, ruble. The revenues reported by the company in the same quarter last year stood at Rs 3,517.5 crore.

“There is a continued momentum in injectables’ portfolio. Overall, the improvement has happened because of increase in global generics business. Secondly, we have achieved good cost control and as result, there is also three per cent increase in expenses,” Saumen Chakraborty, Chief Financial Officer, Dr Reddy’s, told media after announcing the first quarter results here on Thursday.

The global generics business which accounts for as much as 82 per cent of the company’s revenues saw eight per cent upswing at Rs 3,096.1 crore, driven by India, North America including the US, Europe and Venezuela.

Revenues from the North American market, biggest for the company, stood Rs 1,851.5 crore, a growth of 14 per cent from Rs 1,620.5 crore in the first quarter of last fiscal. Sustained performance of the injectable franchise and market share gains in key molecules helped the company post robust growth in the key geography.

In India, the company’s revenues increased by 19 per cent to Rs 475.6 crore from Rs 399.9 crore a year ago. New product launches and prescription growth have not only helped the company to post better growth than industry, but also enabled it to increase market share.

However, income from emerging markets declined by 20 per cent to Rs 577.6 crore from Rs 720.1 crore, mainly due to lower sales in Russia. But Venezuela delivered strong growth of 42 per cent, stemming overall decline to some extent.

Revenues from Europe where Dr Reddy’s is present in Germany and UK went up 43 per cent to Rs 191.2 crore from Rs 133.4 crore a year ago. In the pharmaceutical services and active ingredients (PSAI) segment which accounts for 15 per cent of the company’s revenues, it reported flat growth at Rs 561.4 crore during the quarter.