Dr. Reddy’s Laboratories reports decline in profits
Dr. Reddy’s Laboratories on Friday reported 28% year-on-year decline in net profit to Rs 554 crore for the quarter ended in March. The drugmaker posted 7% year-on-year increase in revenue to 4,728 crore for the quarter under review. Revenue from North America, Dr. Reddy’s Laboratories largest revenue contributor, dropped 3% year-on-year to Rs 1,749.1 crore. “The decline was primarily on account of higher volumes during Q4 last year due to COVID-19 related stocking up and price erosion,” the company said.
In India, revenues grew 23% year-on-year to Rs 844.5 crore. Sequentially, the revenue dropped 12% “led by reduction in COVID-19 drugs sales and seasonality.” Sales in the European market rose 15% on year to Rs 395.6 crore. Emerging markets sales climbed 10% to Rs 884.5 crore, the company said in a statement.
The company’s board approved a final dividend of Rs 25 per share for the financial year 2020-21.
Gross profit margin for the year at 54.3%, an increase of 50 bps over previous year. “The increase was driven by a better product mix and increased leverage from manufacturing overheads. This was partly offset by price erosion, lower export incentives and benefit from PP out-licensing income in FY 20,” the company said.
Commenting on the results, G V Prasad, co-chairman and managing director, said “In FY 21, we continued to grow across all our businesses, enhance productivity and strengthen our development pipeline. We are prioritizing our efforts to launch Sputnik V vaccine across India while working on the development and commercialization of several drugs for the treatment of mild to severe COVID 19 infections.”
The pharma giant’s consolidated operating profit grew 13% on year to Rs 1,133 crore for the last financial quarter of FY21. The consolidated operating margin in the quarter grew by 140 basis points on year to 24%.
“We continue to play our role in the fight against Covid-19 by acting proactively to bring multiple preventive and curative treatment options, including a vaccine,” Dr. Reddy’s said in a statement. Sputnik V vaccine trials demonstrated efficacy of 91.6%, consistent safety and immunogenicity results.
“In April, 2021 we received Emergency Use Authorization (EUA) for the COVID-19 vaccine. We have launched it today and the first dose of the vaccine was administered. Our priority is to ensure widest reach in the shortest possible time,” the company added.
It is expected that the next quarter would be better for the company, with the COVID 19 vaccine Sputnik V available in Indian markets at an MRP of 948. With the government having made vaccination available for all adults, Dr. Reddy’s Laboratories based Sputnik V should help bridge gap between demand and supply.