Dr Reddy’s posted a 3 per cent fall in sales and decline in profits in the fourth quarter. Speaking to Bloomberg TV India, Dr Reddy’s President and Chief Financial Officer, Saumen Chakraborty, says the company is set to launch quite a few products in the second half of the year. The new product launches should provide a growth momentum, he said.

Can you tell us where you have seen price erosion and market share loss in terms of your key products?

As and when we see more competition coming in, we will see some price erosion and also market share loss. We have experienced that in some of the molecules. But in some other molecules we have gained some market share.

Of course, recently there has not been much launches in the North American market. But we expect quite a few launches queued up in the second half of the year.

The new product launches should provide a growth momentum. But otherwise our base business has performed quite resiliently resulting in 19 per cent growth in a year when there were hardly any new product launches.

With respect to three warning letters, have you received any communication from the US FDA? Have you taken any remedial measures? Can you give a timeline for the US FDA re-inspection? Have you been able to successfully site transfers for some of your critical products?

In terms of risk mitigation site transfers, we have successfully done for most of the critical products, which were to be launched in the foreseeable time frame. But products which are to be launched in four-five years from now, we have not taken any site transfer kind of initiatives. In terms of update to the US FDA, we updated one in January and one in the last week of March in response to the warning letters, which we submitted in December.

And I think we would prepare now the third update and send it in a few weeks to the US FDA. Whatever remediation we have committed till May, we have completed almost all of them barring may be one or two. It doesn’t complete all the remediation commitment that we have made. So that will still take couple of months to finish.

Any new facilities expected to be inspected in 2016?

The Bachupally facility was inspected few months back. And the result was good in terms of voluntary action indicator. There are a few more facilities which have been inspected. Once in two years, we expect our facilities to be inspected.

There are a couple of facilities which are due for inspection also. But apart from the US FDA, we got the Australian Regulatory authority inspecting our Srikakulam API plant. Despite intense audit, they gave the best possible rating, which is a comforting factor.

What is the strategy with respect to emerging markets especially Russia and CIS group? Have there been currency hedges in place or is there more pain to be seen in terms of currency depreciation?

What we have seen in FY-16 in comparison to FY-15, we will be far better off in FY-17 in comparison to FY-16. When we compare with FY-16, already the Russian ruble versus the Indian rupee for the whole year, it has been less than one.

So once you start with that base and unless the low crude oil prices go down drastically, you can’t expect that kind of drastic reduction in ruble depreciation. But even then, we have done some hedging. May be only 10-15 per cent of whole FY-17 anticipated sales in Russia is unhedged. But in Russia recently we have got only some key approvals and also quite a few filings have happened from our organic pipeline. Russia remains a key market for us. Ukraine, as a country, will be on our watch list.

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