Dr Reddy's Labs reports 9.5 percent fall in consolidated net profit after tax to Rs 1342 crore in Q2
Indian generic drugmaker Dr Reddy's Laboratories recorded a 9.5 percent decline in its consolidated net profit after tax to Rs 13.42 billion (USD 159.6 million) for the quarter ended September 30. Analysts on average had estimated a profit of 14.01 billion rupees, according to LSEG compiled data.
The second-quarter profit was hit by one-time charges related to its joint venture with Nestle India and Nicotinell acquisition, the company said.
To diversify its portfolio beyond generic drugs and boost its consumer health business, the drugmaker invested 7.34 billion rupees during the quarter in a joint venture with Nestle India, announced in April, to make vitamin supplements.
As per Reuters, the company also reported an impairment charge due to supply chain constraints in U.S. affecting a particular generic medical product.
It also acquired nicotine replacement product, Nicotinell, from Haleon in June.
During the quarter, the company had charged off a debt tax asset following a change in government's land tax laws which also hit the profit, Chief Financial Officer MV Narasimham said on the post-earnings call.
The drugmaker's total revenue jumped 16.5% to 80.38 billion rupees, surpassing analysts' estimates of an 11% rise, as its revenue from North America climbed 17%.
Generic drugmakers such as Dr Reddy's, Cipla and Zydus have been struggling in their key United States market with lower pricing issues amid stiff competition, termed as price erosion.
However, the company said the impact of price erosion was low during the quarter, aiding to double-digit growth of its business in North America.
Generic drugmakers have also been benefitting from strong sales across North America for their generic versions of Bristol-Myers Squibb's popular cancer treatment drug Revlimid since its launch in 2022. Their diabetic drug portfolio has also been contributing to growth in North America.
Revenue from the India business, the company's second-biggest market, climbed 18% to 13.97 billion rupees.
Next Story