Dr Reddy’s Laboratories Ltd on Thursday announced the financial results for the quarter that ended on June 30, 2022 and said that its consolidated profit after tax for the quarter ended June 30 was up by 108 per cent at Rs 1,187.6 crore against Rs 570.8 crore in the same quarter a year ago.
According to the pharmaceutical company, revenues during the quarter were up by six per cent to Rs 5,215.4 crore compared to Rs 4,919.4 crore in the first quarter of FY22. Moreover, other operating income was at Rs 600 crore compared to Rs 50 crore in QlFY22.
“Our underlying business revenues adjusted for covid products contribution during last year have grown well. The profits were aided by a few non-recurring incomes, offsetting the near-term headwinds. We continue to improve the health of our core businesses through productivity improvement and robust product pipelines,” G V Prasad, Co-Chairman and MD said while commenting on the results on Thursday.
In Global Generics (GG), Year-on-year growth of 8 percent was driven by new product launches across most of their businesses and divestment of a few non-core brands in India, partly offset by price erosion in our generic markets, and higher base due to covid product sales in the previous year. The revenues from GG segment were at Rs. 44.3 billion. However, a sequential decline of 4 percent occurred which the company claimed was due to sales decline in North America, incremental competition on key products and price erosion, and normalization of channel inventory in Russia. They also claimed that this was partly offset by new product launches.
In North America, Year-on-year growth of 2 percent, driven by the launch of new products and favorable forex rates, which was offset by price erosion in some of our key molecules. The pharma major also informed that sequential decline of 11 percent was primarily on account of price erosion and a decline in volumes for few products due to incremental competition.
According to analysts, if the one-offs in the revenues is not considered then the financial numbers for the quarter are even more weaker than expected.
Additionally, the company had launched seven new products which include the launch of Ketorolac, OTC Nicotine Lozenges Original, Methylprednisolone Sodium Succinate, Pemetrexed Injection, Posaconazole Tabs and Sorafenib in the US and Pemetrexed Inj. in Canada during the quarter. The revenue in the region stood at Rs. 17.8 billion.
In Europe, year-on-year growth of 4 percent, driven by the launch of new products and scale up of base business, which was partly offset by price erosion in some molecules and adverse forex rates during the quarter. In this region, the company’s revenue stood at Rs. 4.1 billion. Meanwhile, a sequential decline of 7% was primarily on account of price erosion and adverse forex rates, which was partly offset by volume traction in base business.
In India, the revenue was at ₹13.3 billion registering 26% YoY growth driven by the divestment of a few non-core brands, revenue contribution from the products acquired in-licensed from Novartis, and growth in base business and new products contribution. The growth was partially offset due to covid product sales in Ql FY22 which was not there in the current quarter. Moreover, a sequential growth of 38% was primarily driven by the divestment of a few non-core brands, revenue contribution from the products acquired / in-licensed from Novartis, new products contribution and growth in base business. The company launched five products during the quarter in India.
On the sale-wise performance of the launched products and expectations from the upcoming quarter, MV Ramana, CEO-Branded Markets (India & Emerging Markets) told Financial Express.com: “The products that we had launched…we had the opportunity to take it forth through the physical connect as well as through digital mode and we saw traction for the products we had launched. On an average we are expecting this year to launch about 30 products in India. There are going to be two sorts of products: first, the products which are line extentions as part of the product management process for our launch pads, and second, the products that are going to be different from the therapy that we are in. New products are very important growth lever for us and we are going to continue to focus our efforts to leverage both the ability to license and innovate assets and at the same time the ability to develop and leverage the product development department to ensure availability of products for the India buisness.”
Meanwhile, revenues from Emerging Markets stood at ₹9 billion with a 1 % YoY drop and a sequential decline of 25 percent.