Dr Reddy's beats street; Q2 net profit up 32% at Rs 407 cr

Pharma major Dr Reddy's Laboratories reported better-than-expected 32 percent year-on-year rise in second quarter net profit at Rs 407 crore, sending its shares up more than 2 percent on Tuesday.

Its net sales in July-September were up 27 percent to Rs 2,881 crore.

Analysts on average had expected Dr Reddy's to report net profit of Rs 365 crore on revenue of Rs 2,704 crore, according to a CNBC-TV18 poll.

Strong growth and new drug launches in its generic drugs business, especially in the North American market, helped top street expectations.

"Revenues from global generics segment for Q2 at Rs 2,010 crore, recorded YoY growth of 25 percent, driven by key markets of North America, India and other emerging markets," Dr Reddy's said.

During the quarter, a non-recurring and non-cash impairment charge of Rs 68.8 crore pertaining to product intangibles in its generic drug portfolio and a goodwill charge with respect to Italian operations has been considered, it said.

Dr Reddy's second quarter earnings before interest, taxes, depreciation and amortization (EBITDA) were up 47 percent at Rs 770 crore and EBITDA margin improved by 400 basis points to 27 percent from 23 percent.

Its research and development expenses were at Rs 180 crore, 6 percent of revenue.

Its North America revenue from generic drug sales was up 47 percent at Rs 930 crore, driven by limited competition products like fondaparinux (used to prevent deep vein thrombosis), ziprasidone (used to treat mental disorders) and clopidogrel (blood thinning drug), ramp-up in antibiotics portfolio and products from its Shreveport facility, the company said.

Dr Reddy's launched 4 new products in North America in the second quarter and filed 4 abbreviated new drug applications (ANDA). It now as 63 ANDAs pending approval from US Food and Drugs Administration.

Among other markets for generic drugs, India revenue rose 12 percent to Rs 390 crore, and Russia and CIS markets were up 14 percent at Rs 380 crore. Europe revenue, however, declined 16 percent to Rs 180 crore in July-Sep, it said.

The company's revenue from pharmaceutical services and active ingredients grew 33 percent at Rs 790 crore, last quarter.

Dr Reddy's shares were up 2.1percent at 1,733.10 on NSE in afternoon trade.

Source: www.moneycontrol.com

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