Dr Reddy's back in black

Posts Rs 273-cr profit; revenues from North American operations soar 60%.

Global pharmaceutical company Dr Reddy's Laboratories posted a net profit of Rs 273.2 crore for the third quarter ended December as compared to a net loss of Rs 594.6 crore in the same period last year.

Revenues grew 10 per cent to Rs 1,898.5 crore from Rs 1,729.6 crore in the corresponding previous quarter.

Terming the numbers reasonably good, Satish Reddy, chief operating officer of Dr Reddy’s, however, said the results represented a mixed performance. Revenues from North American operations posted a healthy growth at 60 per cent, while from Europe it was down 16 per cent. Pharmaceutical services and active ingredient business declined 5 per cent.

The Hyderabad-based company continued to underperform in Germany, which contributed Rs 140 crore to the revenue, a 33 per cent decline in rupee terms. However, revenues from the rest of Europe grew 39 per cent to Rs 74.4 crore.

Revenues from North America registered a 60 per cent jump to Rs 476 crore in the third quarter as compared to Rs 297 crore in the corresponding previous quarter. Russia contributed Rs 244 crore to the revenues, which is 7 per cent higher compared with Rs 228 crore in the same quarter last financial year. Revenues from the domestic market increased 14 per cent to Rs 301 crore from Rs 263 crore.

Chief Executive Officer G V Prasad said the company had been making good progress in the global generics business adding $10 million and above to the revenues in North America in each quarter for the past four to five quarters.

R&D expenditure was up 46 per cent for the quarter to Rs 130 crore from Rs 89.2 crore in the same quarter last year. The company intends to maintain the same level of spending in the coming months as well, Prasad said. Other operating expenses under selling, general and administrative were up 17 per cent to Rs 637.4 crore, representing 34 per cent of the total revenues, from Rs 543.1 crore.

The company also said it had entered into two settlement agreements with AstraZeneca in the US relating to ANDA (abbreviated new drug application) filed for the generic versions of AstraZeneca's Nexium and Accolate (for asthma) drugs. Revenue from this move would take time in view of the licensing agreement.