Dr Reddy’s Laboratories pins hopes on launches after sharp fall in Q4 profit

HYDERABAD: Dr Reddy’s Laboratories (DRL), which disappointed the Street by suffering a steep fall in its March-quarter profit mostly on account of a write-off of receivables from Venezuela, expects higher sales and profits this fiscal pinning hopes on new approvals and launches.

The stock suffered a fall immediately after the announcement of results but recovered to close with a gain of 3.65% at Rs 2,973.85 on BSE.

The Hyderabad-headquartered drug manufacturer’s consolidated net profit plunged by 86% at Rs 74.6 crore in March quarter from Rs 518.8 crore a year back. The company also suffered a marginal fall of 3% in revenues at Rs 3,756.2 crore in the fourth quarter from Rs 3,870.4 crore in the same quarter of the previous fiscal.

Terming the March quarter as a challenging one, Dr Reddy’s CEO GV Prasad said: "While there has been a marginal decline in revenues, there has been a greater impact on profitability."

Pointing out that provisions were made as a matter of abundant caution to write down outstanding receivables from Venezuela, Prasad said the company "will continue to actively engage with the Venezuelan Government to provide affordable medicine to fulfil the need of people of the country, subject to repatriation of funds."

Apart from anticipated approvals to pending ANDAs that could result in product launches, Prasad said the company’s biosimilars business was also gaining traction by getting approvals and building partnerships in emerging markets.

Hoping to address the concerns raised by the USFDA through correction and upgradation initiatives over the next few months, he said, “Our topmost priority continues to be the strengthening of our quality management processes across the organisation.”

DRL saw 7% growth in its global generics sales at Rs 12,806.2 crore with healthy double-digit growth of 19% each in North America, Europe and India.

The firm witnessed a 25% fall in generic revenues from emerging markets.