Dr Reddy's Laboratories reported a 31.3% year-on-year decline in consolidated net profit for the September quarter, even as its earnings exceeded analyst estimates, supported by better-than-expected operating performance.
Net profit fell to Rs 925 crore from Rs 1,347 crore a year earlier. The pharmaceutical company's revenue declined 1.5% to Rs 8,698 crore from Rs 8,828 crore in the corresponding quarter last year.
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Despite the decline in reported earnings, the Hyderabad-based drugmaker's operating performance surpassed market expectations.
Earnings before interest, tax, depreciation and amortisation (EBITDA) stood at Rs 1,731 crore, down 13.9% from Rs 2,010 crore a year earlier. Analysts had estimated EBITDA at Rs 1,287 crore.
The EBITDA margin, a measure of operating profitability, narrowed to 19.9% from 22.8% in the year-earlier period. However, it remained comfortably above the consensus estimate of 14.9%.
Revenue also exceeded expectations of Rs 8,615 crore, while net profit was higher than the estimated Rs 727 crore, according to the estimates provided.
Among key markets, Dr Reddy's North America revenue fell 23% year-on-year to Rs 2,489 crore, indicating continued pressure on its largest overseas market.
In contrast, its India generics business recorded stronger growth, with revenue rising 17% to Rs 1,851 crore. The company's Europe generics revenue edged up 1% to Rs 1,394 crore.
The contrasting regional performance highlights the divergence in demand across the company's key markets, with growth in India offering some support as North American sales weakened.
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The quarterly results reflect a decline in revenue and operating earnings compared with the previous year, even as the company outperformed expectations on profitability and sales.
Investors will look for further clarity on the factors weighing on earnings and the sustainability of growth in its domestic business.
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