Dr Reddy’s Q3 net drops 29% to Rs 334 cr

Hyderabad: Dr Reddy’s Laboratories (DRL) on Thursday announced its financial results for the third quarter of FY18. The drug major suffered 29 per cent drop in consolidated net profit, which stood at Rs334.40 crore as against the previous corresponding quarter’s Rs470.1 crore. However, its total revenues rose marginally by three per cent to Rs3,806 crore for the quarter under review from Rs3,706.5cr. The company said total revenue from operations for the quarter was not comparable consequent to introduction of Goods and Services Tax (GST) from July 1, 2017. 

GV Prasad, CEO and co-Chairman, said: “We had a satisfactory third quarter performance, with all our key markets performing well. We recorded sequential revenue growth of seven per cent, despite continuing challenges such as price erosion in the US.”

Revenues from global generics (GG) segment were at Rs300cr registering a sequential growth of five per cent primarily driven by the US and emerging markets. It suffered a two per cent year-on- year (Y-o-Y) decline, primarily on account of adverse foreign exchange as the US dollar depreciated by four per cent and lower contribution from Europe generics market. 

“Revenue from operations for the earlier periods (before July 1) included excise duty, which is now subsumed in GST,” Dr Reddy’s said. Prasad further adds: “Our first-cycle NDA approval of Impoyz is a significant milestone in the commercialization of our proprietary products pipeline. We will continue our focus on operational excellence and controlling of SG&A costs across the organisation.”

Company’s CFO Saumen Chakraborty and COO Abhijit Mukherjee spoke to the media here after announcing financial results for the third quarter.Chakraborty said: “Profit after Tax was Rs330 crore. During the quarter, the ‘Tax Cuts and Jobs Act of 2017’ was approved and enacted in the US. Consequent to this enactment the deferred tax assets and liabilities in the US entity have been re-measured resulting in a one-time charge of Rs 93cr being recorded under tax expense.” 

Mukherjee adds: “The capital expenditure was Rs220crore and R&D expenses were Rs470crore. The R&D expenses rose by six per cent. Revenues from North America were Rs 1,610 cr and this indicates sequential growth of 12 per cent, primarily on account of contribution from new products major being sevelamer carbonate. 

However, revenues on YoY declined by three per cent primarily on account of higher price erosions due to channel consolidation and increased competition in some of our key molecules, and impact of adverse foreign exchange. The above is partly offset by new products contribution.”