Oct. 23, 2009 (The Hindu Business Line) --
Hyderabad, Oct. 23 Dr Reddy’s Laboratories’ standalone net profit for the quarter ending September 2009 more than doubled to Rs 197 crore from Rs 91 crore in the same period last year. Its income was up 16 per cent to Rs 1,073 crore from Rs 922 crore in the year ago period. The company’s shares were up 6.35 per cent on the NSE at Rs 960.
The consolidated net profit more than doubled to Rs 217.3 crore from Rs 105 crore in the corresponding previous quarter.
German revenues down
Strong growth in global generics segment in North America, supported by reasonable growth in Russia and India, tight control over operating expenses which remained flat and launch of new products triggered growth in the earnings, Mr G.V. Prasad, Vice-Chairman and Chief Executive Officer, Dr Reddy’s, told newspersons here on Friday.
The total revenues grew 14 per cent to Rs 1,837 crore (Rs 1,615 crore). This included a forex gain of Rs 24 crore.
The company, however, continued to face problem in Germany where it operates through its subsidiary, Betapharm.
The revenues from Germany was down 25 per cent at Rs 220 crore (Rs 280 crore). Asked if the company was planning to exit Germany, Mr Prasad said ‘No’.
“The market in Germany was challenging and will continue to be so for some more time. Our non-AOK tender (A part of which was bagged by the company earlier) products are not doing well. In addition, there is pricing pressure as well,” Mr K. Satish Reddy, Chief Operating Officer and Managing Director, said.
Positive outlook
The company is ‘optimistic’ about its earnings growth this year.
“Germany accounts for only 10 per cent of our revenues. There are many other positive things to happen,” he said.
There were some other tenders in Germany in which the company is participating.
“The outcome would be known soon. The North American generics pipeline of ‘annuity of opportunities’ is very clear. We will be launching some new products – Nateglinide, Lotrel Z(hypertension) and Antara. The first one will have deemed exclusivity in that there are no other players in the market,” Mr Reddy said.
In the domestic market, new product launches (17) and reorganisation of supply chain management resulted in 13 per cent revenue growth at Rs 250 crore.
"We are also planning to launch Omeprozole and one biosimilar in India by the end of current fiscal year,'' he added.
The strategic alliance with GSK for emerging markets was progressing well, he said, adding that the first product may enter the market by the year-end.
On reports that GSK was likely to acquire stake in Dr Reddy's (NYSE:RDY) , Mr Prasad said: "We have said that the promoters are not selling their stake. In line with our company policy, we don't react to market speculation."
Dr Reddy's is expanding its capacity. "The work on two proposed SEZs in Viskhapatnam and Medak has begun. It may involve Rs 150 crore investment each,'' Mr Prasad said.
