Dr. Reddy's slips after subdued Q1 performance

Dr. Reddy's Laboratories declined 2.68% to Rs 5,264 after the drug company's consolidated net profit fell 1.47% to Rs 570.8 crore in Q1 FY22 from Rs 579.3 crore reported in Q1 FY21.

Consolidated revenue from operations increased by 11.3% to Rs 4,919 crore in Q1 FY22 from Rs 4417.5 crore posted in Q1 FY21. Profit before tax tumbled 16% year on year to Rs 742.5 crore in Q1 FY22 from Rs 878.9 crore registered in Q1 FY21.

The drug company's research and development expenses rose by 14% year on year to Rs 4534 crore in Q1 FY22 as compared to Rs 3980 crore in Q1 FY21. EBITDA declined 12.34% to Rs 1018.8 crore in Q1 FY22 over Q1 FY21. EBITDA margin declined to 20.7% in Q1 FY22 from 26.3% in Q1 FY21 and 23.8% in Q4 FY21. Meanwhile, company's gross profit margin stood at 52.2% in Q1 FY21 as compared to 56% in Q1 FY21.

Commenting on the results, co-chairman & MD, G V Prasad said, "The financial performance of the quarter has been driven by healthy sales growth. I am confident about improving our margins in the upcoming quarters which will be led by the scale up of recent launches, new product launches and productivity. While we continue to sharpen execution in our core business, we are also conducting pilots in areas such as Nutrition, Di tamer, and Digital Health & Wellness, which can be future growth drivers".

Dr Reddy's Laboratories is an integrated pharmaceutical company. Through its three businesses - pharmaceutical services & active ingredients, global generics and proprietary Products.

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