Dr Reddy's Lab net profit increases by 76% in Q3 to Rs 1,244 cr

Dr Reddy’s Laboratories (DRL), a Rs 21,500 crore plus pharma giant, has registered strong growth in consolidated net profit during the third quarter ended December 2022 on account of new product launches, higher volumes of base business and forex movements. The consolidated revenue has taken quantum jump of 30 per cent to Rs. 6,635 crore from Rs. 5,103 crore in the corresponding period of last year.

Total revenue, including licensing fees, increased by 37.2 per cent to Rs. 6,790 crore. Its net profit moved up by 75.5 per cent to Rs. 1,244 crore from Rs. 709 crore and EPS, for the face value of Rs. 5 per share, worked out to Rs. 74.93 as against Rs. 42.75 in the last period. The sales of global generics increased by 33 per cent to Rs. 5,924 crore from Rs. 4,451 crore and that of pharmaceutical services and active ingredients (PSAI) moved up by 7 per cent to Rs. 776 crore from Rs. 727 crore. Its sales from licensing fees declined sharply by 38 per cent to Rs. 135 crore from Rs. 217 crore.

The generic sales in North America went up by 64 per cent during the quarter under review to Rs. 3,057 crore from Rs. 1,865 crore. The company launched five new products in US during the quarter. These were desmopressin MDV, OTC guaifenesin ER, fingolimod capsules, thiotepa injection and biorphen injection. Generic sales in North America contributed 45 per cent to its total revenue. Generic sales in Europe improved only by 6 per cent to Rs. 430 crore from Rs. 406 crore due to price erosion and adverse forex rates. Its sales in Germany declined slightly by one per cent to Rs. 220 crore and that in UK and others increased by 25 per cent to Rs. 130 crore. The domestic sales of generics improved by 10 per cent to Rs. 1,127 crore from Rs. 1,027 crore driven by increase in sales prices and new product launches.

Its generic sales in emerging market moved up by 14 per cent to Rs. 1,310 crore from Rs. 1,027 crore. Sales in Russia improved by 45 per cent to Rs. 690 crore. However, sales in CIS countries & Romania declined by 6 per cent to Rs. 220 crore due to reduction in volumes and adverse forex movement. The sales in ROW declined by 10 per cent to Rs. 400 crore on account of higher base in previous year due to the Covid product sales and decrease in sales price of some of our key molecules. DRL’s R&D expenditure improved by 15.9 per cent to Rs. 482 crore from Rs. 416 crore during the similar quarter of last year. The company filed one new ANDA during the quarter. As of 31st December 2022, cumulatively 78 generic filings are pending for approval with the US FDA (75 ANDAs and 3 NDAs under 505(b)(2) route). Out of these 78 pending filings, 41 are Para IVs and 21 have 'First to File' status.

The company also filed 2 DMFs in US during the December quarter. For the first nine months ended December 2022, DRL’s revenue increased by 14.1 per cent to Rs. 17,617 crore from Rs. 15,446 crore in the same period of last year. Its sales from licensing fees improved to Rs. 675 crore from Rs. 556 crore. The sales of generics improved by 19.8 per cent to Rs. 15,966 crore. However, PSAI sales moved down by 4.9 per cent to Rs. 2,680 crore. Its profit before tax improved by 71 per cent to Rs. 4,690 crore from Rs. 2,743 crore and net profit went up by 70 per cent to Rs. 3,547 crore from Rs. 2,086 crore. With significant jump in profits, EPS touched to Rs. 213.68 as against Rs. 125.74 in the last period.