Dr. Reddy’s Laboratory posted a 76 percent year-on-year dip in its consolidated net profit to Rs 88 crore in the fourth quarter of fiscal 2022. The pharmaceutical major posted figures much below analysts’ expectations of Rs 677 crore.
However, the company posted a 15 percent year-on-year increase in consolidated revenues from operations to Rs 5,437 crore in the fourth quarter. However, it declined 6% sequentially.
For the full year, Dr. Reddy’s saw a 13 percent increase in revenues to Rs 21,439 crore, while its net profit rose 37 percent to Rs 2,357 crore.
The pharma company attributed the decline in consolidated net profit to the company to impairment of non-current assets worth Rs 751.5 crore in the quarter under review.
Dr. Reddy’s said it reduced the value of tepilamide fumarate extended-release pills by Rs 433 crore, the Shreveport cash-generating unit by Rs 305 crore, and other intangible assets by Rs 17 crore during the quarter.
Dr. Reddy’s co-chairman and MD, G V Prasad said: “We delivered healthy growth in revenue, though the profits were impacted by impairment charges. In spite of multiple external challenges, our core businesses performed well, driven by an increase in market share, some strong launches, and productivity improvement.”
The pharma company witnessed strong sales in the quarter. The North American market’s sales increased 14 percent on year to Rs 1,997 crore.
The North American generics business grew 6% to Rs 74,900 crore in the full fiscal, reflecting 35 percent of Dr. Reddy’s consolidated revenues.
Price erosion mitigated some of the gains from new product releases. North American revenues increased by 14% year over year in Q4FY22.
“During this quarter, we launched 3 new products – Vasopressin Injection, Nicotine Lozenges Cherry Flavour (OTC), and Clobetasol Shampoo in Canada and for the full year, we have launched 17 products. During the year, we filed 7 new Abbreviated New Drug Applications (ANDAs) with the US Food and Drug Administration (USFDA). As of 31st March 2022,” Dr. Reddy’s said.
In 2021-22, Dr. Reddy’s India business generated revenue at Rs 4,200 crore, up 26 percent YoY. The increase in sales volume, as well as prices of existing products, resulted in a rise in revenue.
Dr. Reddy’s said that the India business growth was supported by Covid-19 product sales.
During the year, Dr. Reddy launched 20 new brands in India including the Sputnik-V Covid-19 vaccine.
The domestic business’s revenue witnessed 15 percent on-year growth to Rs 968.9 crore backed by the launch of new products. European business reported Rs 444.4 crore in the reported quarter, up 12 percent. The consolidated operating profit of the company increased 15.5 percent on year to Rs 1,298 crore with the help of cost optimizations. Dr. Reddy’s consolidated operating margin in the fourth quarter expanded to 23.9 percent from 23.8 percent in the year-ago period.
Following the declaration of the earnings, the shares of the company climbed almost 9%, ending the intraday in the green territory.