Dr Reddy's net rises 13.7%

Total income from sales and services grew 7% at Rs 3,757 cr

Indian drug major Dr Reddy’s Laboratories reported a 13.7 per cent jump in consolidated net profit at Rs 625.6 crore in the June quarter, on the back of improved gross profit margins. The net profit was much higher than Bloomberg consensus estimates of Rs 547 crore.

Total income from sales and services grew 6.8 per cent to Rs 3,758 crore compared with Rs 3,517 crore in the corresponding quarter last year. Consensus estimates for sales stood at Rs 3,885 crore. Global generic sales in North America, which accounts for 60 per cent of the total revenues from its generics business, grew 14 per cent while Europe and India grew 43 per cent and 19 per cent, respectively.

With higher margin, global generic sales grew eight per cent to Rs 3,096 crore. Overall earnings before interest, taxes, depreciation and amortisation margins (Ebitda) also got a boost to 26.5 per cent compared to 25.2 per cent in same quarter last year. Ebitda at Rs 994 crore crore, thus, beat the Bloomberg estimates of Rs 852 crore comprehensively.

Sustained performance of injectable franchise and market share gains in key molecules, contribution from products launched subsequent to quarter ended June, 30, 2015 like valanciclovir, sirolimus, Habitrol added to the revenue growth in American market, according to the company.

Commenting on the results, Dr Reddy's co-chairman and CEO, G V Prasad said," Our first quarter results, with year on year growth of 7 per cent in top line and 14 per cent in bottom line, reflects healthy performance. We were able to achieve these results despite limited new launches and headwinds in the form of currency devaluation in key emerging markets. As we continue to further strengthen our product portfolio and drive new launches, we are well positioned for the next phase of our growth."

The company's gross profit margin at 61.1 per cent, improved by 180 basis points over last year while selling and general expenses grew marginally at Rs 1,097.28 crore as compared with Rs 1,067.89 crore in the year ago period.

Revenues from global generics segment stood at Rs 3,096.1 crore with an year-on-year growth of 8 per cent, primarily driven by North America, Europe, Venezuela and India, the company said.

Pharmaceutical services and active ingredient business grew only marginally at Rs 561.4 crore as compared with Rs 553.8 crore in the corresponding previous quarter due to a fall in revenues from Europe and India in this segment. Sales in North America, however, increased by 21 per cent to Rs 66 crore.