Dr Reddy’s Beats Estimates In October To December Quarter Despite 16% Fall In Profit
Net profit fell to Rs 492.3 crore from Rs 585.7 crore year-on-year.
Dr Reddy's Laboratories Ltd. surpassed analysts’ estimates in the October to December quarter, despite the 15.9 percent drop in its net profit.
The drug manufacturer’s profit slipped to Rs 492.3 crore from Rs 585.7 crore in the corresponding quarter last year, according to its stock exchange filing. The consensus profit estimate of analysts tracked by Bloomberg stood at Rs 377.1 crore. Dr Reddy’s had taken a Rs 63.7 crore one-time hit from its Venezuelan subsidiary in the October to December quarter in 2015.
Revenue fell 6.4 percent to Rs 3,723.2 crore from Rs 3,979.7 crore in the same quarter last year. This was in line with the consensus of analyst estimates.
Earnings before interest, taxes, depreciation and amortisation declined 12.1 percent to Rs 864.5 crore from Rs 984 crore earlier, while margins fell to 23.2 percent from 24.7 percent.
The company spent around Rs 1,500 crore on research and development, which accounted for 14.2 percent of its revenue.
Segment-Wise Performance
Revenue from the global generics segment declined 9 percent to Rs 3,063.8 crore “primarily on account of lower contribution from North America and Venezuela”, the company added in the exchange filing.
Revenue from the North America business fell 15 percent to Rs 1,659.5 crore.
Year-on-year decline of 15 percent, primarily on account of increased competition in valgancyclovir and our injectables franchise coupled with continuing pricing pressure.”Dr Reddy’s Laboratories’ Exchange Filing
Revenue from emerging markets, excluding India, declined 7 percent to Rs 594.8 crore.
Regulatory Challenges
The U.S. Food and Drug Administration is scheduled to re-inspect three manufacturing facilities - Duvvada and Srikakulam in Andhra Pradesh, and Miryalaguda in Telangana - in February and March 2017. Dr Reddy’s had received warning letters from the U.S. drug regulator regarding violation of good manufacturing practices at these facilities in November 2015.