Dr Reddy's Labs Q4 profit falls 27.6% on muted US business, misses estimates

In the financial year FY21, consolidated profit dropped 1.8 percent to Rs 1,914.9 crore and revenue grew by 8.7 percent to Rs 18,972.2 crore compared to the previous year.

May 14, 2021 / 01:59 PM IST
 
 
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Dr Reddy's Laboratories on May 14 reported a 27.5 percent year-on-year decline in consolidated profit at Rs 553.5 crore in the quarter ended March 2021, partly dented by weak US business and higher tax cost.

Consolidated revenue from operations grew by 6.7 percent year-on-year to Rs 4,728 crore in Q4FY21, supported by India and Europe businesses.

The bottomline and topline missed analysts' expectations. Profit was estimated at Rs 654.8 crore on revenue of Rs 4,822.2 crore for the quarter, according to average estimates of analysts polled by CNBC-TV18.

In the financial year FY21, consolidated profit dropped 1.8 percent to Rs 1,914.9 crore and revenue grew by 8.7 percent to Rs 18,972.2 crore compared to the previous year.

"In FY21, we continued to grow across all our businesses, enhance productivity and strengthen our development pipeline," said G V Prasad, Co-Chairman & MD.

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"We are prioritising our efforts to launch Sputnik V vaccine across India while working on the development and commercialization of several drugs for the treatment of mild to severe COVID-19 infections," he added.

In a separate filing, Dr Reddy's Laboratories has said that the imported doses Russia's Sputnik V COVID-19 vaccine have been priced at Rs 948 + 5 percent GST (Rs 995.40) per dose.

The pharmaceutical company also said a soft launch of the vaccine began in Hyderabad, with the first dose administered on May 14.

"The imported doses of the vaccine are presently priced at an MRP of Rs 948 + 5 percent GST per dose, with the possibility of a lower price point when local supply begins. The Company is working closely with its six manufacturing partners in India to fulfill regulatory requirements to ensure smooth and timely supply," Dr Reddy's Laboratories said in a BSE filing.

On the operating front, EBITDA (earnings before interest, tax, depreciation and amortisation) stood at Rs 1,133 crore for the quarter up 13.2 percent over the year-ago, margin jumped 140 bps YoY to 24 percent in Q4 FY21. The operating performance was ahead of analysts' expectations as EBITDA was estimated at Rs 1,099.3 crore and margin at 22.5 percent for the quarter.

The pharma major had a provision for tax expenses at Rs 253.6 crore for March 2021 quarter against tax write-back of Rs 50 crore in the year-ago.

The global generics business grew by 6 percent year-on-year to Rs 3,873.7 crore during March 2021 quarter, with India business reporting a 23 percent YoY growth, Europe posting 15 percent growth and Emerging Markets registering a 10 percent growth.

"The YoY growth was driven by branded markets (India and emerging markets), Europe partly offset by a decline in North America Generics (NAG)," said Dr Reddy's.

But North America business, which contributed 37 percent to total business, dropped 3 percent YoY (up 1 percent QoQ) to Rs 1,749.1 crore in Q4FY21.

"The YoY decline was primarily on account of higher volumes during Q4 last year due to COVID-19 related stocking up and price erosion. The QoQ growth was driven by volume traction in our base business and new product launches partly offset by price erosion," the company reasoned.

During this quarter, Dr Reddy's said it launched 6 new products – Vigabatrin tablets (CGT status granted), Febuxostat tablets, Capecitabine tablets, Fluphenazine Hydrochloride tablets, Lansoprazole OD tablets and biraterone Acetate in Canada.

As of March 2021, "cumulatively 95 generic filings are pending for approval with the USFDA (92 ANDAs and 3 NDAs under 505(b)(2) route). Out of the pending ANDAs, 47 are Para IVs, and we believe 23 have ‘First to File’ status," the company added.

Pharmaceutical Services & Active Ingredients (PSAI) business of the company rose 10 percent compared to the year-ago to Rs 791,5 crore, but Proprietary Products & Others reported a 13 percent YoY decline in business at Rs 63.2 crore during the quarter.

The company has recommended payment of a dividend of Rs 25 per share for the year ended March 2021 subject to the approval of members.
Moneycontrol News
first published: May 14, 2021 01:02 pm

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