Robust sales in key markets boost Dr. Reddy’s Q1 net 18%

Dr. Reddy's Labs Q1 net profit up 18%, revenue rises 29%. Total income of ₹6,931.9 crore, driven by higher sales in North America, new product launches & moderation in price erosion. Global generics contribution to revenue was ₹6,013 crore. CEO Erez Israeli said there are enough products to keep momentum going & cash in hand worth ₹5,000 crore for inorganic growth.

Pharma major Dr. Reddy’s Laboratories’ consolidated net profit rose more than 18% year-on-year for the quarter ended June to ₹1,405 crore, primarily on the back of higher sales in key markets for its generics, particularly North America, as well as new product launches and a moderation in price erosion.

The higher net profit came on a 29% increase in total revenue from operations to ₹6,757.9 crore (₹5,232.9 crore). Total income at ₹6,931.9 crore (₹6,086.8 crore) witnessed an increase of nearly 14%, according to results prepared as per the Indian Accounting Standards.

“We delivered strong sales growth and witnessed robust margin expansion driven by market share gains and new product momentum in our U.S. generics business and superior performance in Russia,” Co-Chairman and MD G. V. Prasad said in a release.

Global generics contribution to the revenue was ₹6,013 crore (₹4,437.1 crore). The growth in North America was driven by the sales of cancer drug Lenalidomide, momentum in base business volumes and the integration of Mayne portfolio. The company launched six new products in the U.S. and two in Canada during the year, CFO Parag Agarwal said during a virtual media interaction.

CEO Erez Israeli said there are enough products in the portfolio to keep the momentum going for the company. “We are accelerating filings [for new products] in the U.S. Most of the filings are anti-cancer, complex generics,” he replied to queries.

While revenue from Europe and Emerging Markets were higher, with Russia leading the performance in the latter, the revenue from India declined for Dr. Reddy’s. “Excluding brand divestment income, sales of divested portfolio from base and NLEM related price reduction impact, India business registered a high single-digit growth. This growth was mainly on account of increase in base business volumes,” the company said.

War chest for inorganic growth