Dr Reddy's Laboratories on Tuesday reported 1 per cent year-on-year (YoY) decline in its consolidated net profit for April-June quarter at Rs 571 crore, primarily because of higher expenses.
While revenue rose 11 per cent to Rs 4,919 crore, selling, general and administrative expenses grew 18 per cent to Rs 1,505 crore. The shares of the company declined following the announcement of results, and ended 10.44 per cent lower at Rs 4,844.35 on the BSE.
The drugmaker's earnings before interest, tax, depreciation and amortisation (EBITDA) stood at Rs 1,019 crore during the quarter, while EBITDA margin was at 20.7 per cent.
The global generics business contributed Rs 4,111 crore to the company's revenue, 17 per cent higher YoY, with North America contributing the highest at Rs 1,739 crore, followed by India at Rs 1,060 crore, and emerging markets at Rs 913 crore.
"Year-on-year growth of 17 per cent was driven primarily by branded markets (India and emerging markets) and Europe. The overall growth was on account of new product launches and volume traction in the base business, partly offset by price erosion in some of our products and adverse forex rates," the company said.
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The revenue from pharmaceutical services and active ingredients segment declined 12 per cent to Rs 754 crore, while that from proprietary products and other segments was almost unchanged at Rs 54.1 crore.
The company's R&D expenses shot up 14 per cent during the quarter to Rs 453 crore. "We continue our focus on investing in R&D to build a healthy pipeline of new products across our markets including development of biosimilars and products pertaining to COVID-19 treatment," it said.
On its COVID-19 portfolio, Dr Reddy's said it has launched Russia's Sputnik V vaccine in India across 80 cities, and over 2.5 lakh people have been vaccinated so far. "We are also working on Sputnik Light, for which Russia phase 3 trials will be leveraged for India approval as per recommendation from SEC."
Dr Reddy's MD and co-chairman GV Prasad said, "I am confident about improving our margins in the upcoming quarters which will be led by the scale up of recent launches, new product launches and productivity. While we continue to sharpen execution in our core business, we are also conducting pilots in areas such as nutrition, direct-to-consumer, and digital health and wellness, which can be future growth drivers."
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