Dr Reddy's Laboratories rose 2.11% to Rs 3,091.90 after the company posted Rs 569.70 crore loss in Q3 December 2019 on impairment of generic Nuvaring.
On a consolidated basis, the drug major recorded net loss of Rs 569.70 crore in Q3 December 2019 compared with net profit of Rs 485.20 crore in Q3 December 2018.Consolidated revenues rose 14% to 4383.80 crore in Q3 December 2019 over Q3 December 2018. EBITDA rose 24% to Rs 1074 crore year-on-year (YoY). EBITDA margin stood at 24.5% in Q3 December 2019, higher than 22.5% in Q3 December 2018. The result was declared during trading hours today, 27 January 2020.
The company reported pre-tax loss of Rs 527.40 crore in Q3 December 2019 compared with pre-tax profit of Rs 580.50 crore in Q3 December 2018, primarily on account of impairment of intangible assets. Excluding impairment, profit before tax stood at Rs 790 crore in Q3 December 2019. Income tax expense fell 55.61% to Rs 42.30 crore YoY.
In December 2019 there has been a generic launch and an authorized generic launch for the product "Nuvaring", which has led to a considerable erosion in the value of this product for the company, and accordingly the firm took an impairment charge of Rs 1110 crore ($156.5 million). In addition to this, considering the current market dynamics, the firm took an impairment charge of Rs 210 crore on the intangibles pertaining to other products. In total, the firm took an impairment of Rs 1320 crore on the intangible assets for this quarter. In Q2 September 2019, the company had an impairment charge on Rs 360 crore.
Commenting on the results, co-chairman and MD, GV Prasad said "The current quarter performance has been good across all our businesses and we achieved strong EBITDA margins. The profits were impacted due to trigger based impairment charge taken on a few products including gNuvaring. We continue to focus on execution and have made significant progress on quality systems and operational efficiencies".
Dr Reddy's Laboratories offers a portfolio of products and services including Active Pharmaceutical Ingredients (APIs), custom pharmaceutical services, generics, biosimilars and differentiated formulations. Its major markets include - USA, India, Russia & CIS countries, and Europe.
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