Uncertainty in obtaining approvals for its products will continue to be a drag on Dr Reddy’s Laboratories, by the company’s own admission.
“Many of our products are awaiting approvals. There is uncertainty on approvals. However, it is a regulatory process,” GV Prasad, vice-chairman and managing director, told analysts last week.
The company saw no major launches in the third quarter, which reflected in its performance.
At Rs2,865 crore, revenue was up around 3% on-year, while profit was down 26% on-year at `378 crore. The 12% rise in selling, general and administrative expenses to `857 crore, and substantial increase in R&D expenses from `151 crore to about `202 crore, are said to be the key reasons for a negative impact on the bottomline.
The slowdown in approvals and increase in competition in the US market are also likely to have an impact on the company’s target of scaling up to $2.3-2.5 billion this fiscal.
For the nine months ended December, the company recorded revenue of $1.51 billion and is expected to fall short of the target by $700-800 million.
Prasad refused to dwell on specifics and only said that the company would accomplish next fiscal what it wanted to do this year.
The company is also said to be reworking on the game plan by putting together a combination of acquisitions, extended R&D programme, new technology platforms, focus on complex injectables and biologics. “We have a game plan in mind,” said Prasad.