DRL net doubles to Rs 217 cr

Hyderabad-based pharmaceutical major Dr Reddy’s Laboratories Ltd (DRL) more than doubled its net profit to Rs 217 crore during the July-September quarter compared to Rs 105 crore in the same period last year, its consolidated results announced today show.

This was on the back of forex gains, cost-control measures and higher margins on some products in the US and Russia. Revenue during the quarter was up nearly 14 per cent to Rs 1,837 crore as against Rs 1,615 crore during the same period last year.

The company gained Rs 24.4 crore during the quarter from forex, as compared with a loss of Rs 29.6 crore last year, said G V Prasad, vice chairman and chief executive officer. DRL also saved about Rs 20 crore on amortisation costs.

 

“Similar performance will not be repeated in the third and fourth quarters,’’ warned Prasad, giving an expectation of 15-19 per cent return on capital employed for the second half of the financial year.

During the quarter, DRL launched 39 new generic products, filed 24 new product registrations and five drug master files globally.

The company will launch Omeprazole Mg OTC, useful in treatment of peptic ulcer diseases, in the current quarter. “The competition will not be intense, as only one generic version of it is available now. DRL will launch one biosimilar by March next. Allegra D24, for treating cough, itchy eyes and related others, will also be launched towards the end of the year,” he said.

This was also a quarter in which the company recorded its highest-ever quarterly sales in the domestic market, at Rs 252 crore, led by key brands like Omez, Omez-DSR and Razo.

As for export markets during the quarter, DRL saw revenue from North America, its largest market abroad, increase 36 per cent to Rs 430 crore, driven by high-volume growth across existing products and new launches in the past one year.

“The generics pipeline is gaining visibility. This was a good quarter for the company, considering that exclusivity of sumatriptan, the generic version of Imitrex, ended in the second week of August. The company had a deemed exclusivity for the launch of nateglinde, a diabetic drug, and purchased Antara ANDA. We also had a settlement on the generic version of Lotrel,” he said.

The company however witnessed a 21.4 per cent drop in its revenues from Germany during the second quarter to Rs 220 crore, from Rs 280 crore last year, on account of lower sales and pricing pressures as the pharma market there shifted from a brand model to a commodity tender model (based on the lowest price).

DRL also won the right to supply eight products through the tender floated by Germany’s largest health insurance company, Allgemeine Ortskramkenkasse (AOK). These products have a market share ranging from 50-80 per cent. However, non-AOK products had only 5-20 per cent market share.

Though revenues from Germany continue to decline, DRL has no plans to exit from there. “The market in Germany is larger than many other markets. We will have a cost advantage and can compete,’’ Prasad said.