Dr Reddy’s Laboratories’ net profit increased 18 per cent to ₹1,402 crore in the first quarter. The total revenue of the Hyderabad-based company increased by 29 per cent to ₹6,738 crore. Revenue growth was led by sales in the US (lenalidomide, new products, Mayne portfolio) and Russia.
“We had double-digit growth supported by new products and market share gains,” Parag Agarwal, Chief Financial Officer told newspersons on Wednesday.
The revenue in North America grew by 70 per cent to ₹32 billion primarily on account of new product launches, continued momentum in existing products, and favourable forex rates movement, partly offset by price erosion. “Overall, this has been a very strong growth,” the CFO said.
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During the quarter, Dr Reddy’s launched six new products in the US and two in Canada and also commercialised the generic prescription portfolio acquired from Mayne Pharma.
Revenue from Europe increased 22 per cent driven by momentum in the base business, new product launches and favourable forex rates movement, partly offset by price erosion, while the same from emerging markets registered 28 per cent growth. Revenue from Russia, at ₹5.6 billion, grew 75 per cent due to an uptick in the base business, price increase, and biosimilars. “We continue to outperform the market growth,” the CFO said.
The revenue from the domestic market was at ₹11.5 billion showing a decrease of 14 per cent, excluding brand divestment income, sales of divested portfolio from base, and NLEM-related price reduction impact, India business registered a high single digit growth. “We signed two innovative deals. We are creating new growth engines.” Agarwal said.
Research & Development expenses during the quarter were at 7.4 as a percentage of revenue as against 8.3 per cent in the same quarter last year.
The company has a cash balance of about ₹5,000 crore, which could be used for inorganic growth, innovation and other capes, according to Erez Israeli, CEO of the company. Going forward, the priorities for the company would include building robust product pipeline areas, such as injectables, complex generics, digitisation and investments in people, he added.