The Hindu Business Line : Generic sales inject more profits for Dr Reddy's

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Hyderabad Jan. 22 Riding on the fruits of its acquisitions and big jump in generics sales in the global markets, Dr Reddy's Laboratories has more than tripled its net profit, while logging a 160 per cent growth in revenues, during the third quarter of the financial year 2007.

While the net profit stood at Rs 187.9 crore during the third quarter ended December 31, 2006, against Rs 62.8 crore in the corresponding period of the last fiscal, Dr Reddy's Laboratories logged sales of Rs 1,543.4 crore, an increase of 160 per cent over the corresponding quarter's earnings of Rs 592. 6 crore. The company's diluted earning per share (EPS) stood at Rs 11.73 for the quarter, against Rs 4.09 during the third quarter of the financial year 2006.

The city-based pharma major also achieved the milestone of crossing $1 billion revenues, in the nine months of the current financial year. Announcing the company's unaudited financial results today, Mr Satish Reddy, Chief Operating Officer (COO), told newspersons that, "Acquisitions, branded formulations, APIs and custom pharmaceutical services (CPS), propelled the growth story for the company during the quarter".

Generics business

While authorised generics business rose to Rs 768.2 crore during the quarter under review against Rs 83.1 crore during the same quarter last year, CPS services boosted the bottomline by adding Rs 156.9 crore against Rs 10.1 crore in comparative periods. The acquisition of Roche's Mexican facility in November 2005 itself adding substantially, he said.

The 180-day marketing exclusivity gained for Ondansetron, the generic version of Zofran tablets, during December 2006, which the company launched also helped Dr Reddy's to capture 55 per cent marketshare, which added Rs 22.3 crore to the third quarter under review. Ondansetron, is the second drug gaining marketing exclusivity, after Fluextine substantially bolstered the company's revenues in 2001.

Overseas markets

The growth has been bolstered with higher revenues from Russia, the CIS nations of Ukraine, Belarus, Uzbekistan and the good performance of Betapharm (German company acquired in 2006), in the European markets. The year-on-year growth in the last six quarters has also been consistent, said Mr Satish Reddy.

Expressing confidence that the company would at a broad level be able to sustain this high growth momentum, Mr G.V. Prasad, Chief Executive Officer, said, "The company was open to more acquisitions, if it fitted the strategic growth plans." He said the company was not into giving revenue guidance.

With a robust portfolio of over 100 Drug Master Files (DMFs), 18 new product launches, the 180-day exclusivity gained for Ondansetron, and over 35 Abbreviated New Drug Applications (ANDAs), Dr Reddy's will be able to continue expanding its global markets, Mr Prasad said.

The company's shares closed at Rs 809.9, down by Rs 1.5 or 0.2 per cent on the BSE today.

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