Dr Reddy’s Q3 results: Net profit at Rs 19.8 crore, sharply lower than Street estimates

Dr Reddy’s Q3 results: Net profit at Rs 19.8 crore, sharply lower than Street estimates

MUMBAI: Dr Reddy’s Laboratories reported a consolidated net profit of Rs. 19.8 crore for the quarter ended December, sharply lower than analysts’ estimate of Rs. 726.5 crore, as against a consolidated net loss of Rs. 527.4 crore reported in the year ago quarter.

The company’s consolidated revenues grew 12 per cent on year to Rs. 4,930 crore, which was largely in-line with analysts’ estimate of Rs. 4,975 crore.

The company’s bottomline in the quarter was adversely affected by a one-time impairment charge of Rs. 592.6 crore with respect to certain products.

There were significant changes to the market conditions for certain of the products fanning part of Company’s Global Generics and Proprietary Products segments, the company said.

“The changes include the launch by competitor of generic version of the product, decrease in the market potential of products primarily due to higher than expected price erosion and increased competition, and higher than expected value erosion,” the company added.

Dr Reddy’s said that not accounting for the impairment cost the company’s net profit in the quarter would have been at Rs. 882 crore.

The company reported an operating profit of Rs. 1,185 crore for the quarter with operating margin coming in at 24 per cent.

“We continued with our growth momentum while maintaining EBITDA margins. We are progressing well on the phase-3 clinical trials for Sputnik V vaccine in India,” said co-chairman and managing director G.V. Prasad.

The company’s revenues in India soared 26 per cent on year to Rs. 959.1 crore in the reported quarter. In North America, the sales of the company rose merely 9 per cent to Rs. 1,739.4 crore, which underperformed analysts’ estimate.

The proprietary products segments of the company continued its strong performance as sales grew 53 per cent on year to Rs. 153.6 crore.

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