Dr Reddy?s Laboratories (Dr Reddy?s) has set sights on emerging markets, which are expected to grow rapidly, compared with regulated markets.

Given the expected slowdown in the US, the company is also looking to strengthen presence in emerging markets for pharma such as Brazil, Russia, India, China, South Korea, Turkey and Mexico to sustain its growth.

Sources said that though markets such as Latin America, Africa, West Asia and some parts of of Asia Pacific region are small in size, compared with the US and Europe, these are expected to grow rapidly than the regulated markets.

Combined revenue from these markets is expected to surge at a CAGR of 12-15% at $290 billion to $320 billion, which will augur well for the company, sources maintained.

To capitalise on this huge prospect, Dr Reddy?s has entered into a tie-up with GlaxoSmithkline to develop and market select products across these markets.

The US markets, which crossed the $300 billion mark recently, will witness a growth slowdown in 2010. As against last year (2009)’s growth of 5.5%, the US markets will grow between 3-5% in 2010, the company said.

Of the $850-billion global generics market, the US and Europe will account for 50-55% and the rest comes from emerging. For Dr Reddy?s India has also become an important market as it expect to contribute 18-19% to the total revenue as compared to 17% in 2009 financial year, sources maintained.

On the business segments, pharmaceutical services and active ingredients (PSAI) has shown substantial improvement over the last few years and contributed around Rs 2,040 crore during the last financial year, comared with Rs 1,875 crore in the previous financial year.

The gross profits from this segment to the total revenue touched 33% as compared to 30% last financial year. This financial year, the company hopes to net Rs 2,500 crore from this segment, the sources said further.

The revenue from proprietary products will grow that of in the previous financial year. As against Rs 294 crore in 2008-09, the revenue from this segment grown substantially to Rs 515 crore in 2009-10 and the company expects the revenue growth will be more or less maintained in the current financial year.