Q2 results: Dr Reddy’s net doubles to Rs 1,093 cr; North American revenue flat

Our Bureau Hyderabad | Updated on November 01, 2019

Dr Reddy’s Laboratories Ltd confirmed that Ranitidine is not sold in the Indian market

Dr Reddy’s Laboratories Ltd’s on Friday announced that its consolidated net profit doubled to ₹1,093 crore in the second quarter ended September 30, against ₹504 crore in the previous-year period.

Its total revenue grew 26 per cent at ₹4,800 crore (₹3,797 crore).

“This included a revenue of ₹720 crore towards licence fee for selling US and select territory rights for two of Dr Reddy’s neurology brands — Zembrace Symtouch (sumatriptan injection) and Tosymratm (sumartriptan nasal spray) to Upsher-Smith Laboratories LLC,” Saumen Chakraborti, the company’s CFO, said at a press conference held on Friday. 

The net tax for the quarter had a benefit of ₹330 crore from the recognition of deferred tax assets of ₹520 crore, primarily related to MAT credit.

Global generics

In the global generics segment, revenue grew 7 per cent, primarily driven by Europe, emerging markets and India. But revenue from North America remained flat at ₹1,426 crore. Price erosion, lower volumes, the impact of a voluntary recall of ranitidine and temporary logistics issues during the quarter adversely impact revenue growth in North America, said Chakraborti.

“Going forward, our focus will be on resolving the warning letter issue with the USFDA, building a pipeline of products, innovation and cost optimisation for increased efficiency,” he added.

Revenue from Europe, India and emerging markets, however, rose 44 per cent, 9 per cent and 10 per cent, respectively, on the back of new products and volume transaction in the base business. 

Selling, general and administrative expenses increased 36 per cent. “This includes ₹3.6 billion recognised as an impairment charge on three product-related intangibles (ramelteon, tobramycin and imiquimod).

R&D expenditure was ₹370 crore, or 7.6 per cent of the revenue. The earnings per share stood at ₹65.82 (₹30.31).  For the half year, net profit increased 83 per cent at ₹1,755 crore backed by a 15 per cent increase in revenue at ₹8,644 crore.

The Dr Reddy’s scrip lost 1.02 per cent on the BSE to close at ₹2,754.55 on Friday. 

Published on November 01, 2019

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