Q1 Results: Higher Other Income Saves The Day For Dr. Reddy’s Laboratories
Dr. Reddy’s Laboratories Ltd.’s quarterly profit beat estimates helped by higher other income and improved sales in all key markets.
Net profit jumped 45 percent year-on-year to Rs 663 crore in the quarter ended June, the drugmaker said in an exchange filing. Profit was aided by higher other income following a settlement of Rs 345.7 crore with U.S. drugmaker Celegen Corp. That compares with the Rs 482-crore consensus estimate of the analysts tracked by Bloomberg.
However, revenue rose 3 percent over last year to Rs 3,844 crore, below the analysts’ forecast of Rs 4,003 crore.
“This quarter, we grew in most of our key markets and hope to continue this momentum with a sharper focus on performance,” GV Prasad, the company’s co-chairman and chief executive officer, was quoted as saying in a statement accompanying the exchange filing.
Sales from India, other emerging markets and Europe jumped 15 percent, 10 percent and 19 percent year-on-year, respectively.
The Hyderabad-based firm’s operational performance, however, missed expectations. Operating profit fell 2.4 percent to Rs 758 crore—the consensus estimate was Rs 858 crore. Operating margin contracted to 19.7 percent from 20.8 percent a year ago. That’s 170 basis points below the projections.
Erez Israeli, the company's chief operating officer, has been promoted as chief executive officer with effect from Aug. 1.
GV Prasad, the current CEO, will be re-designated as co-chairman and managing director of the drugmaker, it said in a separate exchange filing.
Israeli had joined Dr. Reddy’s as COO in April 2018. “Erez has spearheaded the transformation agenda of the organisation by ensuring clear strategic focus, effective cost management, setting foundations for sustainable performance and driving growth,” Dr. Reddy's said. “His appointment as CEO will help to propel the organisation's growth agenda forward.”
In another filing, the company said that Prasad R Menon has been designated lead independent director in place of Anupam Puri whose term ended July 26.
On Monday, Dr. Reddy’s shares fell 2.11 percent on the NSE Nifty Index. That compared with a 1.7 percent decline in the NSE Nifty Pharma Index.