Dr Reddy's Laboratories Limited today said its consolidated net profit for the quarter ended March 31, 2018 was down by three per cent to Rs 302 crore against Rs 312.5 crore in the same quarter in FY 17, primarily due to price erosion in USA and seasonal issues in the Russian market.
Saumen Chakraborty, president, CFO and global head of HR of Dr Reddys, said revenue during the quarter was down by one per cent to Rs 3,535 crore. It was Rs 3,554 crore in Q4 of FY17.
"The drop in net profit is on account of USA and Russia. There was price erosion due to competition in USA and in Russia, there has been a seasonal impact," he told reporters.
Revenue from generic sales from USA and emerging markets, including Russia, was down by six per cent and 9 per cent to Rs 1,449 crore and Rs 550 crore respectively during Q4, Chakraborty said.
G V Prasad, CEO and co-chairman of Dr Reddys, said there have been headwinds in USA that have impacted the net profit.
"The only way out is to launch additional new products and manage on the cost. Also issues with regard to couple of our sites were not resolved.So we are diligently working on them," he said,adding he issues would be sorted out in the coming quarter.
Two of Dr Reddys manufacturing plants received FDA observations during the regulators inspection.
He however said there is no stoppage of supply form those two units to USA.
On the outlook for the current year, he said it depended on approvals by FDA, the US drug regulator, for new products that the company is planning to launch in that country.
"We concluded a challenging year for Dr Reddys with a relatively muted fourth quarter performance. This was mainly on account of continuing headwinds in the US markets and a temporary drop in sales in Russia, attributable to a shift in the channel purchasing pattern."
"Looking ahead, we will continue to workdiligentlyto resolve pending regulatory issues. We will focus on accelerating new products to market and improving our approval process," Prasad said in a statement.
For the whole FY 18, PAT stood at Rs 981 crore as against Rs 1,203.9 crore in FY 17.
The company spent Rs 1,830 crore on research and development during the last fiscal.
Overall, global generic sales declined by one per cent to Rs 1,1400 crore in FY 18 due to lower contribution from North America generics markets, owing to higher price erosion and unfavourable US dollar conversion, he said.
Income from pharmaceutical service and active ingredients segment grew by three per cent to Rs 2,199 crore in FY 18 as against Rs 2,128 crore in FY 17.
In filing with bourse, Dr Reddy's Laboratories said its board of directors recommended a final dividend of Rs 20 (400 per cent) per equity share of Rs 5 face value for the financial year 2017-18.
Dr Reddys shares closed at Rs 2013.75 apiece up 6.30 per cent over previous close on BSE.
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