Dr Reddy's Q2 net doubles to Rs 1,092 cr on one-off gains, revenues up 26%

Riding on one-off gains, drug major Dr Reddy's Laboratories Limited has reported a 33 per cent jump in profit before tax, at Rs 766.4 crore, while its post-tax profit more than doubled to Rs 1,092.5 crore for the quarter ended September 2019. Th epre- and post-tax profit figures in the corresponding quarter the previous year were Rs 578 crore and Rs 503.8 crore respectively.

The company has reported a 26 per cent rise in revenues, at Rs 4,801 crore for the quarter under review, from Rs 3,797.8 crore in the year-ago period despite a flattish growth in the US business.

The company's top-line growth largely hinged on a Rs 722.9-crore license fee received towards the sale its anti-migraine drug to Upsher-Smith Laboratories and the receipt of Rs 345.7 crore from Celgene Company, pursuant to a settlement agreement during the quarter.

Revenues from global generics in the quarter under review were up seven per cent to Rs 3,281.6 crore from Rs 3053.6 crore a year ago, while those from the pharmaceutical services and active ingredients (PSAI) division rose 18 per cent to Rs 710.7 crore from Rs 602.9 crore in the corresponding previous quarter.

Sales from the proprietary products division rose nearly five fold to Rs 808.6 crore, from Rs 141.3 crore in the year-ago quarter on account of a Rs 722.9 crore license fee that the company has received on the sale of its Sumatriptan injection and nasal spray to Upsher-Smith Laboratories.

Dr Reddy's said price erosion and lower volumes, besides the impact of voluntary recall of ranitidine and temporary disruption in supplies due to logistics issues have resulted in a flattish growth in formulations revenues (Rs 1,426.5 crore) in the US, despite the launch of eight products during the quarter.

The overall growth in the global generics business was led by India and Emerging Markets, which grew by 9 per cent and 10 per cent, tp Rs 751.1 crore and Rs 827.6 crore, respectively, during the quarter under review.

The company's gross profit margin was up 250 basis points at 57.5 per cent, from 55 per cent a year ago. However, adjusted for one-offs, normalised gross profit margin stood at 51.5 per cent, according to the company.