Dr Reddy's Posts Q3 Net Profit On Strong India, US Sales

India's second largest drugmaker Dr Reddy's Laboratories Ltd maintained its growth momentum in sales and profits in India and US during the October-November quarter.

Despite challenging market conditions in most of its emerging markets and a 21 per cent sales drop in Russia, one of its key markets, the company's net profit at Rs 579.2 crore for the quarter grew marginally compared to the year-ago quarter’s Rs 574.50 crore.

Its total revenue for this quarter at Rs 3,968 crore was up 3 per cent over the last year's Rs 3,843 crore.

While reduced tax and research and development expenses helped maintaining the growth in profit, strong sales in India and the US, which grew 34 per cent and 18 per cent respectively, boosted sales.

"Despite multiple challenges we have had a satisfactory quarter in terms of our financial performance," said co-chairman and CEO G.V. Prasad.

"Our performance has been impacted due to adverse macro-economic conditions across key emerging market territories. The two approvals and one tentative approval of our new drug applications (NDAs) in the very first review cycle has been a positive development and lays the foundation for building a strong and sustainable proprietary products business," Prasad added.

The generic formulation sales in the US at Rs 1,940 crore grew primarily on account of sustained performance of the injectable franchise and market share gains in key molecules. While, revenues from emerging markets at Rs 640 crore posted a decline of 28 per cent during the quarter and sales from Russia declined 21 per cent on account of depreciation of rouble.

Formulation sales from India for the December quarter at Rs 580 crore grew 34 per cent with continued momentum of big brands. The company, which has sharpened its focus in the domestic market with the recently initiated change in the business model, has been able to see the result in the last two consecutive quarters.

"The portfolio acquired from UCB well-integrated into our supply chain normalizing for contribution from the UCB portfolio, growth of the base business during the quarter is healthy and in line with expectations," the company said in a Tuesday statement.

Its formulation sales from Europe for the quarter at Rs 190 crore also grew about 14 per cent over the last corresponding period and it was primarily driven by two new launches.