Dr Reddy's Laboratories (DRL), the second largest Indian pharma company, has registered relatively low growth of 7.4 per cent in consolidated net profit to Rs.361 crore during the first quarter ended June 2013 from Rs.336 crore in the same period of last year on account of higher research & development expenditure and higher tax provision. Its consolidated net sales improved by 12 per cent to Rs.2,845 crore from Rs.2,541 crore in the corresponding period of last year. Thus, the earnings per share improved marginally to Rs.21.25 from Rs.19.81 in the last period.

DRL scrip received setback on Bombay Stock Exchange immediately after the announcement of financial results and it closed lower by almost 1.7 per cent or by Rs.38 today to Rs.2,179.40.

The sales from pharmaceutical services and active ingredients (PSAI) increased only by 6.2 per cent to Rs.587 crore from Rs.553 crore. The sales of global generics increased by 14.9 per cent to Rs.2,190 crore from Rs.1,907 crore. The sales of proprietary products declined by 15.7 per cent to Rs.67.9 crore from Rs.81.3 crore. The company launched 18 new generic products and filed 12 new product registrations. It filed 5 DMFs globally during the quarter under review.

The generic revenues from North America went up sharply by 37 per cent to Rs.1,087 crore as it launched few key difficult to synthesize products with limited competition during last couple of quarters. It launched two new product viz zoledronic acid (5 mg/100mg) injection and lamotrigine XL during the quarter under review. It filed 2 new ANDAs and cumulatively 64 ANDAs are pending for approval with the US FDA. Out of this 38 are Para Ivs and 8 products have 'First-to-File' status. DRL's sales in Europe declined by 28 per cent to Rs.157 crore as its sales in Germany declined by 26 per cent to Rs.110 crore.

DRL's revenues from emerging markets, including Russia, CIS countries and Tow Territories, improved by 9 per cent to Rs.600 crore. Its revenue from Russia improved by 4 per cent to Rs.370 crore primarily on account of high base effect of the previous year and changes in the market stocking pattern. CIS market registered a sales growth of 28 per cent to Rs.80 crore. The sales in RoW increased by 12 per cent to Rs.148 crore. The domestic revenue remained flat at Rs.350 crore mainly on account of the new Pricing policy 2012, which led to de-stocking in the trade, coupled with the Maharashtra trade strike.

The sales of PSAI in North America increased by 3 per cent to Rs.109 crore and that in Europe declined by 6 per cent to Rs.209 crore from Rs.223 crore. Its PSAI sales in India improved by 29 per cent to Rs.79 crore from 61 crore and that in RoW moved up by 17 per cent to Rs.189 core from Rs.162 crore.

The company's consolidated EBDITA improved by 11 per cent to Rs.578.45 crore from Rs.521.34 crore in the similar period of last year. Its R&D expenditure increased by 55.4 per cent to Rs.242.97 crore from Rs.156.36 crore.  This worked out to 8.5 per cent of its revenues s compared to 6.2 per cent in last period. Its tax provision also increased by 44.6 per cent to Rs.52.78 crore from Rs.36.50 crore.  

The company's standalone net sales increased only by 2 per cent to Rs.1,783 crore from Rs.1,748 crore in the corresponding quarter of last year. Its standalone net profit declined sharply by 63.5 per cent to Rs.64.86 crore from Rs.177.66 crore on account of lower license fees and service income and higher R&D expenditure.