The Hindu Business Line : Dr Reddy's Q3 sales, net up on API, branded dosage biz growth

DR Reddy's Laboratories Ltd has reported a significant growth both in sales turnover and net profit for the third quarter of the current fiscal ended December 2005.

As per the unaudited financial results taken on record by the company on Tuesday, total revenue stood at Rs 590.2 crore against Rs 470.5 crore in the corresponding previous period, recording a growth of 25 per cent.

Gross profit at Rs 299.1 crore (Rs 245.9 crore) was up by 22 per cent, while net profit surged to Rs 62.8 crore (Rs 4 crore).

The improved net profit translates into a diluted EPS of Rs 8.19 against Rs 0.52 in the corresponding previous period. Net profit margin has improved to 11 per cent from one per cent.

The company reported other income of Rs 59.1 crore (Rs 12.3 crore), which included a profit of Rs 38.8 crore from sale of the formulations plant located in Goa.

Further, net interest income rose by Rs 7.9 crore to Rs 14.6 crore from Rs 6.7 crore earlier.

The company has attributed this increase to higher deposit base and higher average interest yields. R&D expenditure came down by 27 per cent to Rs 51.6 crore (Rs 70.5 crore).

The company has attributed a reduction of Rs 11.2 crore to the generics R&D partnership deal with ICICI Venture. The balance decrease was on account of lower R&D expenses in generics.

In a release, the company said that the overall revenue growth was driven by increase in revenues from active pharmaceutical ingredients (API) and branded finished dosage businesses.

Revenues from the API business increased by 48 per cent to Rs 210 crore, while income from branded formulations business grew 34 per cent to Rs 270 crore.

Gross profit margin came down to 51 per cent from 52 per cent earlier. The company has attributed this fall to two factors. First, there was a decline in margins from North America generics.

Second, the company had an exceptional income of Rs 5.3 crore related to DRF-2593 during the corresponding previous period, the release said.

The company scrip gained 1.3 per cent on the BSE on Tuesday to close at Rs 1,043.05 and 1.08 per cent on the NSE, where it closed at Rs 1,042.35.

While 1.19 lakh shares changed hands on the BSE, 2.74 lakh shares were traded on the NSE.

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