Dr. Reddy’s net profit declines by 76% to Rs 153 crore

Dr.Reddy Laboratories reported a very disappointing June quarter 2016 (Q1FY17).

The pharma company reported consolidated net profit of Rs 153.5 crore in Q1FY17, registering a massive 76.28% yoy(year-on-year) decline. However, the current profit grew by 25.20% compared to preceding quarter.

The total income stood at Rs 3,222.5 crore, witnessing decline of 14% qoq and 15% yoy.

It’s operating profit (EBITDA- earnings before interest tax depreciation and amortization) stood at Rs 397.9 crore, down by 60% compared to Rs 994.1 crore in June quarter 2015.

On standalone basis, the net profit for the company stood at Rs 409.1 crore, again tumbling by 17.08% yoy. However, this was comparatively better than the net loss of Rs 38.7 crore recorded in preceding quarter.

The standalone total income was at Rs 2,141.5 crore, down by 15.21% yoy and 9.13% qoq.

The top-line and bottom-line both were impacted by decline in volume mainly in US market.

GV Prasad, Co-chairman and CEO of Dr.Reddy said, "We have come through a very difficult first quarter, with our top and bottom lines impacted in volume growth, particularly in the US market and the loss of the business in Venezuela. We also faced a number of challenges in the quarter including price erosion and delayed launches as a result of the warning letter, which significantly impacted our earnings. “

"However, we continue to take actions that focus on redemption, strengthening our quality systems and executing on our strong product pipeline. We remain focused on generating long term, sustainable growth, " added Prasad.

On geographical basis, the company recorded revenues from the global generic segment of Rs 2663.8 crore, declining by 14%yoy. From the global generic segment, North America and Europe both contributed a decline of 16% yoy to Rs 1552.3 crore and Rs 161.5 crore respectively.

India was the only market where Dr.Reddy’s growth was positive. The country contributed 10% yoy growth to Rs 522.3 crore from Rs 475.6 crore in June quarter 2015.

 Also, revenue from emerging markets was down by 26% to Rs 427.7 crore.

The company has adopted Indian accounting standard from April 1, 2016 and the consolidated results are reported under that standard.

The share price of Dr.Reddy Laboratories closed at Rs 3,322.85 slumped by 152 points or 4.37%.