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Aided by high-margin product launches in North America and strong growth in emerging markets, Dr Reddy’s Laboratories Ltd recorded its highest sales and profit numbers for the July-September quarter.
The Hyderabad-based drug-maker’s consolidated net profit increased 76 per cent to Rs 690 crore in the second quarter, from Rs 392 crore a year ago.
Revenue went up 17 per cent to Rs 3,357 crore. The company’s earnings per share stood at Rs 40.47 against Rs 23.93.
“This is the highest-ever reported sales and profit in any quarter,’’ said Abhijit Mukherjee, President, Global Generics, Dr Reddy’s, speaking to reporters here on Thursday.
Talking about the growth drivers, CFO Saumen Chakraborti said that out of 19 product launches during the quarter, four were in the US, which boosted revenue.
The improvement in the over-the-counter segment in emerging markets such as Russia and the CIS countries (former Soviet republics) also aided sales growth.
In the domestic market, business grew 8.5 per cent. However, the government regulation of drug prices, which came into effect recently, will impact Dr Reddy’s to the tune of Rs 50 crore during the year.
The shift from a tender-based market in Europe resulted in a slight decrease in revenue. The net incremental foreign exchange impact was Rs 2.3 crore.
Asked whether growth levels could be sustained in the remaining two quarters, Mukherjee said: “This quarter is exceptionally good on new launches. Every quarter cannot be like this.’’
The research and development (R&D) cost could also go up as the company was moving to complex products in the global generics market. During the September quarter, R&D expenses increased to 9 per cent of sales from 6.1 per cent last year.
The Dr Reddy’s scrip lost 2.64 per cent on the BSE on Thursday to close at Rs 2,455.95.
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