Impacted by shrinking revenues from its German subsidiary Betapharm and the absence of one time exclusivity revenues on two major products, the Indian pharmaceutical major Dr Reddy's Laboratories reported a 5% dip in net profit at Rs 267.2 crore for the quarter ended September 2007 as compared with Rs 279.8 crore in the corresponding quarter last year.The year on year decline in net profit for the quarter under review was contained at 5% level thanks to the one time tax benefit of Rs 150 crore($36.5 million) coming by way of reversal of deferred tax liability related to Betapharm.The company revenues registered a 37% decrease at Rs 1,267 crore for the second quarter of the current financial year as compared with Rs 2,003.9 crore in the corresponding quarter last year.Yet, the exclusion of one-time revenue of Rs 780.8 crore from the generics sale during the 6 month marketing exclusivity for simvastatin and finasteride would give a 4% increase in revenues(in rupee terms), the company maintains.Revenues from Betapharm declined to Rs 190 crore(Rs 47 million) during the second quarter ended September 2007 compared with Rs 260 crore($64 million) in the corresponding quarter last year. Gross profit for the quarter rose to 51% of the total revenues as compared with 41 % in the corresponding previous quarter.While there were no new announcements to ensue an immediate recovery to make up for the revenue decline, the company CEO G V Prasad said the normal revenues with increased profit margins are expected to start from the end of the current financial year when the shifting of manufacturing of all the products of German subsidiary to India and Europe is complete.The decline in revenues from Betapharm was on account of supply constraints where in Salutas, the supplier to Betapharm, was not able to maintain supplies, besides the rupee appreciation against he Euro, according to Prasad.The company registered a 11% growth in APIs business, 27% growth in sales in CIS countries, 9% growth in India. US generics business, excluding the one time revenues, has also gone up by 63% during the quarter.The company is actively working on its $50 million (Rs 200 crore) capital expansion plans to increase the formulations and finished dosages capacities, Prasad said.
