Dr. Reddy's Q3 Results: Profit Rises 75%, Beats Estimates

Dr. Reddy’s Laboratories Ltd.'s third quarter net profit rose, beating analyst estimates.

Other Highlights (YoY)

• Revenue from the mainstay North American market rose 64%, contributing 45% of the total sales. This was driven by new product launches, increase in volumes and a favourable forex movement, which was partly offset by price erosion.

• Five new products were launched in the U.S. in the third quarter.

• European business rose 6%, accounting for 6% of the revenue.

• India revenue was up 10%, contributing 17% of the total revenue for the quarter. The filing said that the growth was driven by increase in sales prices and new product launches, partly offset by reduction in volumes for certain products.

• Emerging market sales grew 14%, making up 19% of the revenue for the quarter. Of this, Russia reported a year-on-year sales growth of 45% on account of increase in volumes and prices, new product launches and favourable forex rates. The other geographies reported a year-on-year decline.

• Pharmaceutical services and active ingredients segment grew 7%. It made up 11% of the total revenue.

• Expenditure on selling, administration and distribution rose 17% to Rs 1,800 crore.

• Research and development expenses stood at 7.1% of revenue. A year ago, it was 7.8%. “We continue our focus on investing in R&D to build a healthy pipeline of new products across our markets, including development of products in our biosimilars and generics businesses,” the company said in the filing.

• The company has a net cash surplus of Rs 3,400 crore as on Dec. 31.

Shares of Dr. Reddy's Labs closed 1.3% lower prior to the results, compared with a 1.27% fall in the benchmark Sensex.