Dr Reddy's Lab Q2 net profit rises 26% to Rs 722 crore

Hyderabad: Aided by good sales growth coupled with new product launches, drug major Dr Reddy's Laboratories Thursday reported a 25.74 percent jump in consolidated net profit at Rs 721.89 crore for the second quarter ended September 30.

The city-headquarted company had posted a net profit of Rs 574.10 crore during the corresponding period of previous fiscal.

Net income from sales and services rose to Rs 3,988.96 crore during the quarter under review, as against Rs 3,587.81 crore in the same period of previous fiscal, an increase of 11 percent, company officials said.

"We had robust sales growth across our markets of US, India and Europe, supported by new products that were launched in the last twelve months," Dr Reddy's Laboratories co-chairman and CEO GV Prasad was quoted as saying in a statement.

The Gross Profit Margin stood at 61.3 percent, an improvement by 285 bps over last year.

The R & D spend was Rs 450 crore, with continued focus on building complex generics and differentiated products pipeline, it said.

The EBITDA stood at Rs 1100.40 crore, which is 28.6 percent of revenues, a year-on-year growth of 31 percent.

"This was a very satisfactory quarter for us in terms of both revenue and profitability. Going ahead, of course, there are head-winds, in terms of not so many launches, competition coming up and consolidation of the channel. I think all these are certainly areas of concern, apart from regulatory compliance related issues and all that", Chief Operating Officer, Abhijeet Mukherjee told a press conference here.

He further said, "Other geographies are all doing very well. India is doing very well. Europe, a great growth. Emerging markets, we have the currency hit. There is nothing much to add, but it stabilised. Russia has come back. Overall, the story is good. The PSAI (pharmaceutical services and active ingredients), although the revenue is flattish, the margins are significantly more healthy".