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Pharma major Dr Reddy's Laboratories Ltd posted ₹570-crore consolidated loss in the third quarter ended December 31, 2019.
In the corresponding quarter of the previous year, the Hyderabad-based company posted ₹485-crore net profit. Total revenue grew 14 per cent at ₹4,384 crore (₹3,850 crore).
“The profits were impacted due to trigger-based impairment charge taken on a few products, including generic Nuvaring,’’ Saumen Chakraborti, Chief Financial Officer, Dr Reddy’s, told newspersons at a press conference here on Monday.
The erosion in the value of Nuvaring, which has led to a considerable erosion in the value of this product, has taken an impairment charge of ₹1,113 crore while the same for a few others was ₹206 crore. In total, the company has taken an impairment charge of ₹1,320 crore.
The pharma major fared better in several other parameters. “We had the highest-ever quarterly revenue without any kind of one-offs during the quarter under review,’’ he said.
At the operating level, earnings before interest, tax, depreciation and amortisation (EBITDA) grew 24.1 per cent to ₹1,073 crore and margin rose by 200 bps to 24.5 per cent. Excluding intangible impairment, the profit before tax would be ₹793 crore.
Revenue growth
Revenue from North America, emerging markets, India and Europe, increased 8 per cent, 19 per cent, 13 per cent and 52 per cent, respectively driven by new products launches, among others.
Research and Development (R&D) expenditure was at ₹395 crore (₹367 crore last year) and accounted for 9 per cent sales. Dr Reddy’s filed for three Abbreviated New Drug Applications (ANDAs) with the USFDA during the quarter taking the total pending ANDAs to 101.
Net cash surplus
Dr Reddy’s ended the quarter with a net cash surplus of ₹414 crore. When asked on what the company intends to with the cash, Chakraborti said inorganic growth in ‘some spaces’ will be an option.
On the resolution of CT0 6 warning letter from the USFDA, Chakraborti said: “As we speak now the audit by the US regulator is on.’’ He said further details cannot be shared.
Stock surge
Despite losses Dr Reddy’s scrip surged on the bourses. An analyst said, “This was a market surprise and was mainly due to the strong growth in gross margins and other operational merits the results showed.’’
Dr Reddy’s scrip gained 5.31 per cent on the BSE to end at ₹3,188.95 on Monday .
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