Dr Reddy’s Labs Q1 net flat at ₹571 cr

Our Bureau Hyderabad | Updated on July 27, 2021

GV Prasad, Co-Chairman and MD, Dr Reddy’s Laboratories

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Pharma major Dr Reddy’s Laboratories Ltd’s consolidated net profit decreased by one per cent, at ₹571 crore, in the first quarter ended June 30, 2021, compared to ₹579 crore in the corresponding quarter of the previous financial year.

The total revenue of the Hyderabad-based company, however, increased 11 per cent at ₹4,919 crore as against ₹4,417 crore in the same period last year.

“The financial performance of the quarter has been driven by healthy sales growth. 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,” GV Prasad, Co-Chairman and MD, Dr Reddy’s, said on Tuesday.

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“While we continue to sharpen execution in our core business, we are also conducting pilots in areas such as nutrition, direct-to-customer, and digital health and wellness, which can be future growth drivers,” he added.

The financials for the quarter under review have been adjusted with an additional charge of ₹191 crore arising out of the arbitration award in favour of HatchTech towards the Xeglyze product as an adjusting subsequent event for filing International Financial Reporting Standards (IFRS) financials,” the company said.

Revenue up, new products launched

Revenues from North America grew by one per cent, driven by launch of new products and increase in volumes of certain existing products, which was offset by price erosion in some molecules and adverse forex rates.

During the quarter, the company launched six new products, including Sapropterin Dihydrochloride Powder, Albendazole Tablets, Ertapenem Injection and Icosapent Ethyl Capsules in the US, and two products in Canada.

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In Europe, revenue grew by 12 per cent primarily on account of volume traction in base business and new product launches across the company’s markets, which was partially offset by price erosion.

In the domestic market, the increase in revenue was at 69 per cent, primarily driven by increase in sales volumes of its existing products, led by increase in sale of Covid drugs due to the severe second wave witnessed in India.

“The growth was also aided by contribution from new product launches and increase in sales prices of our existing products. We launched six new products during the quarter, including Sputnik-V vaccine and 2-Deoxy-D-glucose for Covid,” Dr Reddy’s said. In Emerging Markets too, there was 14 per cent increase in revenue growth.

Covid portfolio

Dr Reddy’s launched Russian Covid vaccine Sputnik V in India in collaboration with the Russian Direct Investment Fund (RDIF) in May 2021 after receiving emergency use authorisation (EUA) in April 2021. The company said it was working with RDIF for ramping up supplies.

`”We are also working with six CMOs in India for manufacturing readiness. We have launched it across 80 cities and 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,” it said.

The company also ramped up supply of Remdesivir during the first quarter to meet higher demand due to the surge in Covid cases during the second wave in India.

Published on July 27, 2021

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