Erez Israeli to replace GV Prasad as CEO of Dr Reddy’s Laboratories

Our Bureau Hyderabad | Updated on July 29, 2019 Published on July 29, 2019

Dr Reddy’s Q1 net up 45% at ₹663 crore

GV Prasad, co-Chairman and CEO of Reddy’s Laboratories Ltd, has shed the CEO role in favour of Erez Israeli, the company’s COO, the company said on Monday.

Israeli will take over as CEO on August 1. “I am not retiring and will be co-Chairman and Managing Director,” Reddy said, adding that Israeli will continue to report to him.

The pharma major also reported a consolidated net profit increase of 45.31 per cent at ₹663 crore for the first quarter ended June 30, compared with ₹456 crore in the same period last year. Its total revenue increased 3 per cent at ₹3,843 (₹3,720 crore).

Announcing the results at a press conference held here, Saumen Chakraborti, President and Chief Financial Officer, said the profit included ₹343 crore received from Celgene following a settlement.

“This quarter, we grew in most of our key markets and hope to continue with this momentum with a sharper focus on performance,” Prasad said.

Generics business

Revenues from the global generics segment grew 8 per cent, primarily driven by emerging markets, India and Europe. Revenue from North America, India and Europe grew 3 per cent, 15 per cent and 19 per cent respectively. In emerging markets, the sales growth was 5 per cent. Growth across markets was mostly driven by new launches. During the quarter under review, the firm launched five products and relaunched acne treatment drug isotretinoin.

The pharmaceutical services and active ingredients segment, however, witnessed a 16 per cent fall in revenues due to a sales decline in certain products.

Acquisition plans

Dr Reddy’s said it is now scouting for acquisitions. “There is an intent for inorganic growth that we are busy exploring,” Prasad, said adding that the company’s debt is “near zero”. The drug-maker is pursuing “multiple targets” across almost all the markets it currently operates in, he added.

R&D expenditure, which was at ₹360 crore in Q1 FY20 against ₹415 crore in Q1 FY19, “will potentially go up”, said Chakraborti.

The Dr Reddy’s scrip lost 1.92 per cent on the BSE to end at ₹2,652.55 on Monday.

Amalgamation plan

In a BSE filing, the company said its board of directors has approved the amalgamation of Dr Reddy’s Holdings Ltd, an entity held by the promoter group with a 24.88 per cent stake in Dr Reddy’s Laboratories Ltd, into the company.

“The amalgamation (scheme) would lead to simplification of the shareholding structure and reduction in shareholding tiers,” it said.

Published on July 29, 2019
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