Dr Reddy’s Q4 net down 76% at ₹88 crore

Pharma major Dr Reddy’s Laboratories’  consolidated net profit declined 76 per cent at ₹88 crore in the fourth quarter ended March 31, 2022 compared with ₹362 crore in the corresponding quarter of previous financial year. The revenue of the Hyderabad-based company grew by 15 per cent at ₹5,437 crore as against ₹4,728 crore as per IFRS 

For the full year-ended March 31, 2022, Dr Reddy’s posted a 37 per cent increase in net profit at ₹2,357 crore on a revenue of ₹21,439 crore, which registered a 13 per cent increase over previous year’s revenue of ₹18,972 crore. 

“We delivered healthy growth in revenue through profits have been impacted by the impairment charges. Inspite of multiples external challenges, our core businesses performed well driven by an increase in market share, some strong launches and productivity improvement,’‘ G V Prasad, Co-Chairman and Managing Director, Dr Reddy’s told newspersons in a press conference on Thursday.

Impairment charges were mainly over product impairment of Tepilamide Fumarate Extended Release Tablets  on account of its decrease in market potential and impairment of Shreveport plant assets and Goodwill.

Broad based growth

The company registered broad-based growth in revenues in all geographies including Russia and the domestic market.

Revenues from North America Generics for the year at ₹75 billion registered a year on year growth of 6 per cent .

“We have crossed the one billion dollar milestone in this market,’‘ Parag Agarwal, Chief Financial Officer, Dr Reddy’ said.  Revenues from Europe grew 8 per cent while domestic market registered 26 per cent growth.

Russia business unaffected

According to Prasad, the company was not impacted in Russia in the backdrop of the Russia-Ukraine war. “Russia is our main market. Shipping continues and money is coming,’‘ he said.  

In Ukraine, however, there was some impact. “We are finding ways to support Ukraine by sending supplies,’‘ Prasad said adding that the impact of the geopolitical crisis on the industry was more `indirect’ in view of increasing costs in general.

Revenues from emerging markets showed a growth of 30 per cent while revenues from Russia grew by 32 per cent.

Research & development expenses in FY22 were at 8.2 per cent . Dr Reddy’s will continue to invest in biosimilars, among others, it says.

Sputnik V

Speaking on the impact of the Russian–Ukraine crisis on Sputnik, Deepak Sapra, CEO–APIs & Services, Dr Reddy’s, said there was none as “Sputnik V is now a completely ‘Indianised’ vaccine in terms of supply chain. There was no change in Dr Reddy’s collaboration with Russian Direct Investment Fund (RDIF), he added.

The company is betting big on the recent nod for SputnikLight as a booster dose for the people who had already taken Sputnik V. 

“We are also in the middle of clinical trials of Sputnik Light as a universal booster,’’ Sapra said. The company is likely to approach the regulator with data by the end of June. 

Dr Reddy’s, which the brand custodian of Sputnik V in India following a tie-up with RDIF, had so far supplied 1.2 million doses of Sputnik V. It expects the volumes to go up with the booster dose supplies. The price of Sputnik Light vaccine will be reduced to make it more `competitive’ in line with the current market situation, according to Sapra. Sputnik is now priced at ₹995 per dose with 5 per cent GST.

For now, there is no ‘focus’ on Sputnik M for children, Sapra added. Dr Reddy’s is also looking at export of its Covid-19 portfolio depending on the opportunity. 

The board of directors of the company has recommended a final dividend of ₹30 (600 per cent) per equity share of ₹5 each for the financial year 2021-22. The dividend will be paid on or after five days from the date of declaration of the final dividend by the shareholders at the 38th annual general meeting.

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