Dr Reddy's Laboratories, the third largest Indian pharma company, managed to reduce its net loss during the fourth quarter ended March 2006 despite lower revenues from international branded formulations segment and lower margins in UK. Further lower margins in Mexico also put pressure. Lower R&D expenditure helps the company to reduce its net loss during the quarter. DRL's net loss for the fourth quarter amounted to Rs 23.60 crore as compared to Rs 52 crore in the corresponding period of last year. Its revenues improved by 64 per cent to Rs 697.40 crore from Rs 425.2 crore in the last period.
The board of directors announced bonus share issue in the ratio of 1:1 for existing shareholders and recommended a final dividend of Rs 5 per share of face value of Rs 5. The fourth quarter includes the financials of betapharm Germany for 28 days and CPS business in Mexico for 90 days.
The company's net profit for the year ended March 2006 went up sharply to Rs 162.90 crore from Rs 21.1 crore in the previous year, a smart gain of 672 per cent. Its total revenues reached at Rs 2427 crore from Rs 1947 crore in the previous year, registering a rise of 25 per cent. The annual EPS worked out to Rs 21.24 for 2005-06 as compared to Rs 2.76 in the previous year.
Commenting on the full year results, GV Prasad, chief executive officer, of the company said, "The year 2005-06 has been a satisfying one for all of us as we improved short-term profitability without compromising our long-term strategic initiatives. We were able to achieve both these objectives through a combination of corporate initiatives as well as improvement in operations. Our revenues crossed the $ 500 million milestone, registering a 25 per cent growth. The most satisfying part of our performance in 2005-06 has been the contribution from all key geographies and businesses, including the contribution from acquisitions. We believe that with all the initiatives that we have undertaken in the last few years, we have built a strong foundation and look forward to a period of sustainable and profitable growth beginning 2006-07."
The company's international business increased by 25 per cent to Rs 16 billion and that from domestic market increased by 24 per cent to Rs 8 billion. Its revenues from API business increased by 19 per cent to Rs 8.2 billion in FY 06 from Rs 6.9 billion. The company's R&D expenditure declined by 23 per cent to Rs 2.2 billion due to R&D partnerships in US generics, which helped to reduce R&D investments by Rs 384 million.