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Read more about Dr Reddy\'s Q3 profit down 29% at Rs 3.3 bn on higher price erosion on Business Standard. BS ReporterHyderabad, 25 January: Indian pharmaceutical major Dr Reddy\'s Laboratories Limited has reported a 29 percent decline in consolidated net profit at Rs 3.34 billion for the quarter ended December 2017 on the back of higher price erosion,
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higher price erosion
Indian pharmaceutical major Dr. Reddy's Laboratories Limited has reported a 29
per cent decline in consolidated net profit at Rs 3.34 billion for the quarter ended
December 2017, compared with Rs 4.70 billion a year earlier, on the back of
higher price erosion, increased competition and the impact of adverse foreign
exchange in the US and European markets.
However, the company was able to post a 3 per cent increase in consolidated
revenues at Rs 38.06 billion during the third quarter under review as compared
with Rs 37.07 billion in the corresponding quarter previous year.
"We had a satisfactory third quarter performance with all our key markets
performing well. We recorded sequential revenue growth of 7 per cent despite
continuing challenges such as price erosion in the USA.
Our first-cycle NDA approval of Impoyz is a significant milestone in the
commercialisation of four proprietary products pipeline. We will continue our
focus on operational excellence and controlling of SG&A (selling, general and
administrative) costs across the organisation," Dr Reddy's CEO and co-chairman G
V Prasad said.
The share of global generics in the company's overall revenues declined to 79 per
cent in the quarter under review from 83 per cent, while its revenue contribution
fell 2 per cent to Rs 30.1 billion as revenues marginally decreased across all the
markets except India.
Revenues from the Indian market, which is the second largest grosser for the
company in global generics segment during the quarter, registered a 3 per cent
increase at Rs 6.12 billion during the quarter.
On a sequential basis, global generics grew 5 per cent as compared to Rs 28.62
billion in the quarter ended September, 2017.
On the other hand, pharmaceutical services and active ingredients (PSAI) segment
has registered a one per cent growth at Rs 5.44 billion in the third quarter as
revenues from India and the rest of the world (other than North America and
Europe) increased substantially. The revenue from proprietary products rose to
2.52 billion during the quarter from Rs 1.19 billion in the year-ago period.
The gross profit margin declined by 280 basis points over that of previous year
primarily on account of higher price erosions, increased competitive intensity in
some of the key molecules in the US, the company said.
SG&A expenses at Rs 12 billion was an increase of 6 percent over that of the
previous year. During the quarter, a settlement agreement was entered into with
the US Department of Justice on litigation involving packaging against a payout of
Rs 319 million.
The company has reported a finance income of 0.85 billion for the quarter as
compared to Rs 44 million in the corresponding previous quarter.
Article By - Business Standard