Hyderabad-based pharmaceutical major Dr Reddy's Laboratories posted a 68.38 per cent drop in net profit for the fourth quarter ended March 31, 2008 (Q4FY08) to Rs 102.8 crore as compared with Rs 325.2 crore during the corresponding period last year. Revenues were down 14.9 per cent to Rs 1,325.2 crore from Rs 1,557.3 crore last year.
Announcing the results, GV Prasad, group vice-chairman and chief executive officer, said revenues and profit dropped due to high upsides.
The company also paid the entire non-recourse loan taken for acquiring Germany's Betapharm. The administrative expenses during the quarter increased to Rs 427.5 crore, as against Rs 343.3 crore.
The company saw a decline in revenue from the generics business in North America, which contributed Rs 560 crore in the fourth quarter of 2006-07 as against Rs 250 crore this quarter. Revenues from the custom pharmaceutical services business dived to Rs 140 crore from Rs 190 crore.
For the financial year ended March 31, 2008 (FY08), the group recorded a 49.46 per cent decline in net profit at Rs 470 crore from Rs 930 crore in FY07. Revenues slipped to Rs 5,000 crore, down 23.07 per cent from Rs 6,500 crore last year.
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Satish Reddy, group managing director and chief operating officer, said North America, Germany and India each accounted for more than Rs 20 crore in finished dosages while Russia contributed Rs 10 crore.
Higher rebates to insurance companies and pricing pressures in Germany and supply constraints in Mexico dogged the company for a larger part of the year, he said.
During the year, the company launched 89 generic products and made 397 filings. He said Dr Reddy's was relocating the manufacturing of certain products from the Betapharm portfolio to India for cost advantages.
So far, 16 products have been moved to India. The company has restructured and repositioned its business into generics, pharmaceutical products and innovation wings.
The company has also created a research and development facility in Cambridge, UK, and now has manufacturing plants in India, the US, the UK, Mexico and China. It will ramp up the manufacturing capabilities at all plants.
Dr Reddy's would also foray into the dermatology business in the US with three new products - two in-licenced products and one developed with another company, he said. The company would also launch a new biologic product in India apart from coming out with about 15 new products this year in India and Germany.