Dr Reddy’s Laboratories has registered a 69.41% year-on-year rise in consolidated net profit at R690 crore in the September quarter, driven by strong growth of generics in the North American market.
Revenues rose to Rs 3,357 crore, up 16.5%, beating Street estimates. Revenues from Europe remained flat, while sales in the emerging markets, including Russia, CIS countries and rest of the world, increased by 42%. Higher sales of limited competition products, including Finasteride, too, helped.
Gross profit margin stood at 58%, improving by nearly 560 basis points, compared with the year-ago period. Gross profit margin for global generics and pharmaceutical service and active ingredients (PSAI) business segments stood at 66.1% and 24.6%, respectively. The gross margin improved on account of higher contribution from new product launches in North America, whereas that of pharmaceutical service and active ingredients (PSAI) declined, primarily on the back of lower number of launch molecules and relatively higher overheads.
Revenues from global generics segment improved by 32% to R2,655 crore driven by North America, Russia and other emerging markets. Its sales in North America increased by 43% to R1,320 crore from R927 crore in the same period of last year mainly due to launch of four new products and higher sales by existing products like fondaparinux, omepprazole DR.
Sales from the domestic market improved by 8.5% to R421 crore from R388 crore. The sales were under pressure on account of trade disruptions and impact of the revised prices under new pharma pricing policy. Its sales from emerging markets increased by 42% to R730 crore. Its revenue from Russia went up by 44% to R460 crore largely driven by volume uptake in the current quarter on account of seasonal impact. Its European sales declined marginally to R1,76 crore from R178 crore.
Sales from PSAI segment declined by 19% to R640 crore on the back of lower number of ‘launch molecules’ to its customers from R788 crore in the corresponding period of last year. PSAI sales in North America declined by 30% to R94.4 crore from R135.30 crore and that in Europe by 19% to R235.8 crore from R290.6 crore. DRL shares closed at R2455.95, down 2.64%, on BSE on Thursday.