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Dr Reddy's net up 76% on new product launches and growth in emerging markets

Thursday, 31 October 2013 - 9:56pm IST | Agency: DNA

 Hyderabad-based integrated global pharma company Dr Reddy’s Laboratories (DRL) reported 76% increase, year on year (YoY), in net profit for the July-September quarter of fiscal 2014 (Q2FY14) beating street estimates by a huge margin.

The company's profit after tax (PAT) for the second quarter stood at Rs 690.3 crore as compared to Rs 392.5 crore in the same period last fiscal. A median adjusted estimate by 35 analysts on Bloomberg had pegged the net profit figure Q2FY14 to be approximately Rs 448 crore.

Reporting highest ever quarterly results, DRL’s consolidated revenues grew 17% during Q2FY14 at Rs 3,360 crore. According to company management, growth in global generics (GG) segment was driven largely by new product launches, continuous momentum in emerging markets and rupee depreciation.

Despite impressive numbers, DRL shares were down 3.45% in the intra-day trade on Thursday closing at Rs 2,455 down 2.64% from the previous day’s close.

While revenues from the global generics (GG) segment increased 32% YoY at Rs 2,650 crore with growth primarily coming from North America, Russia and other emerging markets, the pharmaceutical services and active ingredients (PSAI) segment side of revenues declined 19% YoY at Rs 640 crore.

Operating profit (Ebitda) at Rs 950 crore was 28.3% to revenues versus 25.9% to revenues in Q2FY13. During the quarter, the company launched 19 new generic products, filed 13 new product registrations and filed eight drug master files (DMFs) globally.

Gross profit margin at 58% in improved by nearly 5.6% as compared to the same period last fiscal. Gross profit margin for GG and PSAI business segments stood at 66.1% and 24.6% respectively.

“GG gross margin improved primarily on account of higher contribution from new product launches in North America, where as PSAI gross margin declined, primarily on the back of lower number of launch molecules to our customers and relatively higher overheads during the quarter,” company said in a results statement.

The company's research and development (R&D) spend at Rs 300 crore increase 71% year on year and was at 9% to revenues as compared to 6.1% in corresponding quarter last year. Capital expenditure (capex) for quarter ended September 2013 stood at Rs 380 crore.

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