Dr Reddy's Q3 profit lags estimates as emerging market sales slip

MUMBAI (Reuters) - India's second-largest drugmaker, Dr Reddy's Laboratories Ltd, reported a quarterly profit that fell short of analysts' estimates due to lower sales in emerging markets such as Russia.

Net earnings for the quarter ended Dec. 31 were 5.79 billion rupees ($85.13 million), up from 5.75 billion rupees a year earlier, Dr Reddy's said in a statement. Analysts, on average, expected 6.55 billion rupees.

"Our performance has been impacted due to adverse macro-economic conditions across key emerging market territories," Dr Reddy's Chief Executive GV Prasad said. He said the quarter had been satisfactory.

Currency volatility, mainly in Russia and Venezuela, has been a drag on Dr Reddy's earnings for several months. For the third quarter, the company's sales from such emerging markets slumped 28 percent.

That overshadowed a 7 percent rise in revenue from its largest market, the United States, and a 34 percent rise in sales from India.

Dr Reddy's U.S. business, however, has been under a regulatory overhang since November, when the U.S. Food and Drug Administration (FDA) warned it for violations of manufacturing standards at three of its factories.

The company said at the time that it was working on responding to the FDA's concerns with a plan on how it would fix the problems. But some analysts have expressed worries that the FDA could ban imports from the plants if it remains dissatisfied with the company's response.

Dr Reddy's shares fell as much as 4 percent on Tuesday in Mumbai.

($1 = 68.0100 Indian rupees)

(Reporting by Zeba Siddiqui in Mumbai; Editing by Sunil Nair)