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Dr Reddy’s Laboratories Q3 net profit up 3,648% at Rs 707 crore

January 28, 2022 04:09 PM

Dr Reddy’s Laboratories Q3 net profit up 3,648% at Rs 707 crore
Profit after tax in the third quarter of the financial year rose from Rs. 19.8 crore in the same period the previous year.

Generic drug maker Dr Reddy’s Laboratories on Friday, January 28, reported a 3,648% surge in net profit to Rs 707 crore in the quarter ended December from a year ago as it benefitted from a steep fall in impairment, amortisation and depreciation charges.

Profit after tax in the third quarter of the financial year rose from Rs. 19.8 crore in the same period the previous year. Revenue increased 8% from a year ago to Rs. 5,320 crore, the Hyderabad-based company said.

On a sequential basis, profit declined 29 percent from Rs 992 crore in the three months ended September.

“We delivered a steady performance in Q3 with healthy EBITDA and strong cash generation while continuing to invest in building a pipeline of products across businesses,” said co-chairman and managing director GV Prasad.

EBITDA is short for earnings before interest, tax, depreciation and amortisation, a measure of corporate profitability.

Impairment charges dropped from Rs 597.2 crore in the year-ago quarter to Rs 4.7 crore in the latest quarter, the amortisation charge fell from Rs 108.6 crore to Rs 91 crore and depreciation charge declined from Rs 213.1 crore to Rs 206.6 crore during this period.

Revenue increase

Dr Reddy’s Laboratories revenue rose on an improvement of 9% in sales of global generics to Rs 4,450.8 crore and an increase of 4% in revenue from pharmaceutical services and active ingredients (PSAI) to Rs 727 crore.

In the nine months ended December, the pharmaceutical giant posted an increase of 67% in post-tax profit to Rs 2,269 crore and a rise of 12% in revenue to Rs 16,002 crore.

The company reported a significant increase in net profit margin to 13.3% in the December quarter, up from 0.4% a year ago. Gross profit margin remained stable at 53.8%, it said.

In a statement, the company attributed the growth in revenue from global generics primarily to new product launches and higher sales volume apart from a favourable forex rate.

Global generics 

Dr Reddy’s Laboratories launched four new products in the US during the quarter including a carmustine injection used to treat some types of brain tumours and an Ephedrine Sulphate injection used in the treatment of allergic disorders like bronchial asthma. It also launched valsartan tablets, used to lower blood pressure, and venlafaxine ER tablets, which are used in the treatment of depression.

The company filed a new abbreviated new drug application during the quarter, taking the cumulative generic filings to 91, of which 45 were Para-IVs and the company believes 24.

Also Read : Dr Reddy’s Q3 Preview : Revenue expected to increase 10-15%, PAT likely to grow 22-25%

In global generics, the company reported 7% growth in North America to Rs 1,864.5 crore, 7% increase in India to Rs 1,026.6 crore and 20% spurt in emerging markets to Rs 1,153.9 crore. It reported a marginal declinel of 2% in Europe to Rs 405.8 crore that was attributed to price erosion in some products.

Covid portfolio

“We continue to play our role in the fight against Covid-19 by acting proactively to bring multiple preventive and curative treatment options, including a vaccine,” said the company, whose major Covid-19 products till now include the Sputnik V vaccine, Remdesivir, Avigan (Favipiravir), 2-deoxy-D-glucose (2-DG) and Molnupiravir.

“We have conducted clinical trials for Sputnik Light and are also developing several other Covid-related drugs for treatment ranging from mild to severe conditions,” the company said.

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