Dr Reddy's Laboratories (DRL), the second largest Indian pharma major with sales of Rs.11,600 crore plus, has registered impressive growth in sales and profits during the fourth quarter ended March 2013 on account of higher sales in North America and emerging markets as well as benefits from one time settlement from Nordion Inc. Its consolidated net profit moved up sharply by 66.6 per cent to Rs.570.89 crore from Rs.342.70 crore in the corresponding period of last year. Its consolidated net sales also increased by 25.6 per cent to Rs.3,340 crore from Rs.2,658 crore. With strong growth, its earnings per share reached at Rs.33.62 as against Rs.20.21 in the last period.
The board of directors has recommended equity dividend of Rs.15 per share of Rs.5 each, which worked out to 300 per cent for the full year ended March 2013. As against the equity capital of Rs.84.92 crore its reserves and surplus stood at Rs.7,799 crore as compared to Rs.6,633 crore, a growth of 16.1 per cent. Despite better profit growth, DRL scrip declined by over 2.6 per cent or Rs.53.95 to Rs.2,027 on BSE.
DRL's global generic sales increased by 25.2 per cent to Rs.2,257 crore from Rs.1,840 crore and that of pharmaceutical services and active ingredients improved by 25.2 per cent to Rs.1,158 crore from Rs.925 crore in the same quarter of last year. Its sales from proprietary products improved by 31.5 per cent to Rs.38.55 crore from Rs.29.32 crore. The company incurred R&D expenditure of Rs.233 crore as against Rs.174 crore, a growth of 33.7 per cent. Its interest cost went up to Rs.39.73 crore from Rs.8.22 crore.
DRL's consolidated net sales for the full year ended March 2013 increased by 20.2 per cent to Rs.11,627 crore from Rs.9,674 crore in the previous year and its net profit surged by 17.6 per cent to Rs.1,678 crore from Rs.1,426 crore. EBDITA improved by 9.5 per cent to Rs.278 crore from Rs.254 crore. Its selling, general and administrative expenses increased by 16.3 per cent to Rs.3,358 crore from Rs.2,887 crore and R&D expenditure by 29.8 per cent to Rs.767.33 crore from Rs.591.05 crore. Its interest cost went up sharply by 188 per cent to Rs.45.99 crore from Rs.15.99 crore. EPS for the full year worked out to Rs.98.82 as against Rs.84.16.
The sales of global generic increased by 17.5 per cent to Rs.8,256 crore from Rs.7,024 crore. Similarly, the sales of pharmaceutical services and active ingredients moved up by 24.5 per cent to Rs.3629 crore from Rs.2,915 crore in the previous year. The company launched 78 new generic products and filed 56 new product registrations. Further, it filed 47 DMFs globally and its cumulative total reached at 577 DMFs as at the end of March 2013. It also filed 18 ANDAs and one NDA, and its cumulative figure reached 65 ANDA pending with US FDA for approval.
DRL's generic sales in North America increased by 18.7 per cent to Rs.3,785 crore from Rs.3,189 crore in the previous year and that in India increased by 12.6 per cent to Rs.1,456 crore from Rs.1,293 crore. The growth in North America is largely driven by key limited competition products such as ziprasidone, fondaparinux, rampup on its antibiotics portfolio and product from its Shreveport facility. In India, it launched 24 new brands and its growth was driven by volume increase across mos key brands and new products launches.
However, its generic sales declined in Europe by 6.6 per cent to Rs.772 crore from Rs.826 crore. The sales of generic in Russia & other CIS countries moved up by 27.5 per cent to Rs.1,690 crore from Rs.1,326 crore. Rest of the World sales of generic increased by 41.7 per cent to Rs.553 crore from Rs.390 crore.
The company's pharmaceutical services and active ingredients (PSAI) in North America surged by 34.5 per cent to Rs.574 crore from Rs.427 crore and that in Europe jumped by 42.5 per cent to Rs.1,201 crore from Rs.842 crore. Its sales of PSAI improved by 29.3 per cent to Rs.464 crore in India and by 10.4 per cent to Rs.831 crore in Rest of the World.
The company received US$ 22.5 million (Rs.122 crore) as one-time settlement with Nordion Inc (formerly known as MDS Inc) towards the damages sustained by the DRL due to the breach by Nordion of the then existing laboratory services agreement for bioequivalence studies.
DRL's standalone net sales for the year ended March 2013 increased by 22.3 per cent to Rs.8,074 crore from Rs.6,604 crore in the previous year and its net profit increased by 38.7 per cent to Rs.1,265 crore from Rs.912 crore.