Dr Reddy’s Laboratories’ consolidated net profit increased 77 per cent to ₹1,247 crore in the third quarter of FY22 as against ₹706 crore in the corresponding quarter of the previous financial year. The total revenue of the Hyderabad-based company increased 27 per cent to ₹6,770 crore compared to ₹5,320 crore in the year-ago period.
Describing the quarter as “yet another very strong quarter”, Parag Agarwal, Chief Financial Officer, said the sales growth was broad based with all businesses registering growth with higher contribution from North America and Russia.
The revenue from the global generics segment grew 33 per cent year-on-year, primarily driven by new product launches, increase in business volume and favorable forex movement, which was partially offset due to price erosion in the generic markets.
Revenue from North America registered 64 per cent growth. Revenue from Europe and emerging markets increased 6 per cent and 14 per cent, respectively, and by 10 per cent in the domestic market.
Revenue from Russia, at ₹690 crore, showed 45 per cent increase. R&D expenses stood at ₹480 crore, representing 7.1 per cent of total revenue in the quarter under review.
At ₹1,800 crore, SG&A expenses increased 17 per cent yoy. This was primarily attributable to investments in sales & marketing, annual increments, certain one-off expenses and higher forex rate. There was an impairment charge of ₹13.40 crore.
The company sees no demand for Covid-19 products and its collaboration with Russian Direct Investment Fund on Sputnik vaccine is in force. The company has now halted the production of Sputnik but is ready to start the production if demand comes up.
Going forward, the company has a ‘lot of appetite’ for inorganic growth if it finds a right candidate that matches with its business philosophy, product and capability requirements, Erez Israeli, CEO, said. Investments will be made in developing complex products and biosimilars, among others.