 "Dr Reddy's Q3 profit marginally up at Rs 579 cr")
Indian drug major Dr Reddy's Laboratories Limited has reported a marginal 1% increase in consolidated net profit at Rs 579.2 crore for the quarter ended December, 2014 on the back of lower growth in revenues.
The company revenues for the quarter under review grew by 3% at Rs 3,967.9 crore as compared with Rs 3,843.1 in the corresponding period previous year.
While the company performed well in global generics revenues from the three important geographies - North America (18%) Europe(14%) and India(34%) - by posting a higher revenue growth, the same in the emerging markets were down by 28% on account of the falling currencies in respective countries.
Revenues from the pharmaceutical services (PSAI) business also declined by 17% compared with the corresponding previous quarter.
Stating that the impact on revenues from the emerging markets were largely compensated by a higher revenue growth in the other important markets, including the US, Dr Reddy's chief operating officer Abhijit Mukherjee said he would expect the emerging markets to stay stable going forward as there was little room for further fall in oil prices.
The company, on the other hand, was able to improve the gross profit margin by 130 basis points to 59.5% during the quarter.
Revenues from North America for the quarter under review stood at Rs 1904 crore, registering a 18% growth, primarily on account of sustained performance of the injectable franchise and market share gains in key molecules, according to the company.
Commenting on 34% growth in Indian revenues, the company chief financial officer Saumen Chakraborty said the acquisition of UCB portfolio was performing well in line with the expectations.
Dr Reddy's has taken hit from the non-repatriation of $63 million outstanding revenues from Venezuela, which stopped the dollar outflow from the country. Dr Reddy's has been working on various options to address the issue, according to Chakraborty.
Responding to a question on how the company was going to achieve higher revenue and profit growth under the current circumstances, Abhijt Mukherjee said they would expect to launch far more new launches in the US market than what they could launch in the current year.
Commenting on Dr Reddy's quarterly results Sarabjit Kour Nangra, vice president-research of Angel Broking said the results were below expectations both on top and bottom line.
"The lower than expected performance is on the back of emerging market(Rs 639.9 crore), which dipped by 28%, Russia with sales of Rs 310 crore declined by 21% year on year on the back of depreciation of Ruble," Nangra said in a note.
