Dr Reddy's Laboratories Ltd. reported a fall in profit in the third quarter of the current financial year due to a one-time impact of higher labour costs, even as it beat estimates.
Consolidated net profit tanked 14% to Rs 1,210 crore in the October-December period, compared to Rs 1,414 crore in the year-ago quarter, according to a stock exchange filing on Wednesday. Analysts' consensus estimates compiled by Bloomberg projected a bottom line of Rs 1,091 crore.
The company has assessed the implications of the New Labour Codes and has recognised an incremental cost of Rs 117 crore towards employee benefits during the third quarter.
Dr. Reddy's Labs Q3 Results (Cons, YoY)
- Revenue up 4.4% Rs 8,753 crore versus Rs 8,360 crore (Bloomberg Estimate: Rs 8,340 crore)
- Ebitda Rs 1,888 crore versus Rs 2,344 crore (Bloomberg Estimate: Rs 1,833 crore)
- Margin at 21.56% versus 27% (Bloomberg Estimate: 22%)
- Profit down 14% Rs 1,210 crore vs Rs 1,414 crore (Bloomberg Estimate: Rs 1,091 crore)
Segment Performance
Dr Reddy's Lab witnessed broad-based growth, aided by forex, in the international market. It was moderated by product-specific headwinds in the US.
Revenue from North America dropped 12% year-on-year to Rs 2,964 crore, while Emerging Markets rose 32% to Rs 1,896 crore, Europe sales jumped 30% to Rs 1,448 crore and India income increased by 19% to Rs 1,603 crore.
Global generics segment jumped 7% to Rs 7,911 crore.
Shares of Dr Reddy's settled 1% lower at Rs 1155.5 on the BSE, ahead of the results, compared to 0.3% decline in the benchmark Sensex. The stock is down 10% on a 12-month basis.
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