Dr. Reddys Lab reports Q3 PAT at Rs 19.80 cr

On a consolidated basis, Dr. Reddy's Laboratories posted a net profit of Rs 19.80 crore in Q3 FY21 as against a net loss of Rs 569.7 crore in Q3 FY20.

The drug maker's consolidated revenue increased 12% year on year to Rs 4930 crore in Q3 FY21. Dr. Reddy's registered a profit before tax of Rs 284.3 crore in Q3 FY21 compared with pre-tax loss of Rs 527.40 crore posted in the same period last year. Tax expense surged to Rs 264.5 crore in Q3 FY21 as against Rs 42.30 crore in Q3 FY20.

The company reported impairment charge of about Rs 600 crore during the quarter. In January 2021 there has been an additional generic launch for the product Nuvaring, which has led to considerable erosion in the value of this product for the company, and accordingly the firm took an impairment charge of Rs 320 crore. In addition, considering the current market dynamics, the firm took an additional impairment charge of Rs 280 crore on the intangibles pertaining to other products. The firm had an impairment charge of Rs 1320 crore in Q3 FY20 and Rs 78.1 crore in Q2 FY21.

The pharmaceutical company's EBITDA grew by 10.3% year on year and stood at Rs 1185.10 crore in Q3 FY21, representing 24% of revenue. Gross profit margin stood at 53.8%, a decline of 30 bps over previous year and 10 bps sequentially, which was primarily impacted due to price erosion and lower export benefits, partially offset by the milestone income received for the compound AUR102.

Revenues from Global Generics (GG) segment stood at Rs 4075.1 crore in Q3 FY21, rising 13% year on year primarily driven by new product launches and integration of the acquired portfolio from Wockhardt in India. The volume growth in the base business was largely offset by price erosion.

Selling, general and administrative expense (SG&A) expenses were at Rs 1440 crore, increasing 14% year-on-year primarily due to incremental costs post the integration of the acquired portfolio from Wockhardt in this year and increased freight expenses. Sequentially, it increased by 10% primarily due to pickup in sales & marketing activities in branded markets and increase in freight expenses.

R&D expenses were at Rs 410 crore, representing 8.3% to revenues. The company's focus continues on building a healthy pipeline of new products across our markets including development of products pertaining to COVID-19 treatment.

Commenting on the results, G V Prasad, MD of Dr. Reddy's said, "We continued with our growth momentum while maintaining EBITDA margins. The profits were impacted due to trigger-based impairment charge taken on a few acquired products including gNuvaring. We are progressing well on the phase 3 clinical trials for Sputnik V vaccine in India. We continue to focus on enhancing our product offerings to our patients to serve them better."

Shares of Dr. Reddy's were down 2.97% at Rs 4731.65. Dr Reddy's Laboratories is an integrated pharmaceutical company.

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