Dr Reddy's fourth quarter net doubles with new launches

Hyderabad-based pharmaceutical company Dr Reddy's Laboratories Limited today reported a 101 per cent jump in consolidated net profit (adjusted) for the quarter ended March 2011 helped primarily by strong margins from new launches. The company's net profit for the fourth quarter stood at Rs 334.5 crore compared to Rs 166.7 crore in the corresponding quarter last year. Revenues grew 23 per cent to Rs 2,017 crore from Rs 1,642.4 crore.

For the full year 2010-11, net profit grew 16.8 per cent to Rs 1,076.2 crore compared with Rs 921.4 crore in the previous year even though there was a moderate rise of six per cent in revenues, which stood at Rs 7,469.3 crore (Rs 7,027.7 crore).

Adjustments include non-cash impairment charge of Rs 860 crore and German subsidiary betapharm restructuring cost of Rs 90.5 crore for financial year 2009-10. For 2010-11, these include profit from sale of land of Rs 29.2 crore.

Company vice-chairman and chief executive officer G V Prasad said while the delay in new launches and general decline in pharmaceutical services business contained the growth in revenues, the increased profitability for the full year could be attributed to the new product launches. However, there was a 20 per cent dip in operating expenses for 2010-11 to Rs 2,763.5 crore from Rs 3,433.2 crore the year ago period, contributing to the overall profitability.

Managing director and chief operating officer P Satish Reddy said the restructuring of betapharm and other initiatives taken with substantial investments would start yielding results from the current financial year.

He said North America, Russia, India and other emerging markets were driving the growth of sales revenues. Its revenues from North America grew 18 per cent led by new product launches. However, revenues from Germany declined 25 per cent during the same period while from Europe, other than Germany, increased 13 per cent.

Reddy said the company would launch 20 new products in the current year besides investing Rs 883 crore in infrastructure, including expanding the capacity to 25 billion units in finished dosages.

The board of directors has recommended a final dividend of Rs 11.25 per equity share of Rs 5 face value, subject to the approval of shareholders at the ensuing annual general meeting.