Dr Reddys net drops 3.42% in Q2

Hyderabad, Oct 31: Pharma major Dr. Reddy's Laboratories on Tuesday reported a 3.42 percent drop in net profit during Q2, primarily due to price erosion in its US market.

The net profit during the quarter ended September was Rs 284.90 crore against Rs 295 crore in the corresponding quarter of last year.

The revenues at Rs 3,546 crore declined by one percent YoY but improved 7 percent over the previous quarter.

The revenue growth in North America, the biggest market, fell by 11 percent YoY to Rs 1,431.8 crore from Rs 1,613.4 crore in the same quarter last year. The QoQ decline was 4 percent.

Saumen Chakraborty, Chief Financial Officer, Dr. Reddy's told reporters that during the quarter the company had four launches in North America. As of September 30, cumulatively 103 generic filings are pending for approval with the USFDA.

He said while there was a decline in revenues from North America, there was a good improvement in Pharmaceutical Services and Active Ingredients (PSAI) segment and also in the Indian market.

Revenues from emerging markets grew YoY 14 percent while from the Europe it improved by 37 percent.

He believes that the price erosion in North America will offset with new product launches. Stating that the first half of current fiscal saw some good launches, he said the impact of this could be seen in the next quarter. "We expect some good launches in the second half," he said.

Abhijit Mukherjee, Chief Operating Officer, Dr. Reddy's hoped that the second half would be better than the first.

He said the company would continue to strengthen and work with regulatory agencies to address concerns raised by them. He said the audit of the company's various sites was an ongoing exercise.

He expects another audit by USFDA of the company's formulations manufacturing facility in Duvvada, Vishakhapatnam by the end of Q4.

He admitted that the audit by German drug regulator of the second unit at Bachupally did not go well. Another audit is expected in 6 to 9 months.