Dr Reddy's Laboratories (DRL), the second largest pharmaceutical company in India after Sun Pharmaceutical Industries, has posted disappointed financial performance during the second quarter ended September 2014 due to lower sales in Europe, higher taxation and R&D expenditure. Its consolidated net profit declined sharply by 16.8 per cent to Rs.574.10 crore from Rs.690.25 crore in the similar period of last year. EBDITA declined by 8.3 per cent to Rs.871.50 crore from Rs.949.90 crore. With lower net profits, its EPS declined to Rs.33.70 as against Rs.40.59 in the last period.

The lower net profit impacted scrip movements and DRL scrip declined by over Rs.61 to Rs.3018.75 in the afternoon session on BSE.

DRL's consolidated net sales increased by 6.9 per cent to Rs.3,588 crore during the second quarter from Rs.3,357 crore in the same period of last year. DRL's sales from Global generics improved by 8.7 per cent to Rs.2,887 crore from Rs.2,655 crore and that of Pharmaceutical Services and Active Ingredients (PSAI) moved up by 6 per cent to Rs.830 crore from Rs.783 crore. The sales of proprietary products, however, declined to Rs.29.78 crore from Rs.42.54 crore.

Its revenues in North America registered growth of 8 per cent to Rs.1,430 crore. It launched one new product and filed 2 ANDAs during the quarter under review. Cumulatively, 72 ANDAs are pending for approval with the US FDA of which 45 are Para IVs, and 11 to have 'FiRs.to File' status. The company's R&D expenditure increased by 36.7 per cent to Rs.411.3 crore from Rs.300.9 crore. Further, it filed 28 DMFs globally, The cumulative number of DMF filings reached at 703.

The company's generics sales in emerging markets improved by 14 per cent to Rs 830 crore. Its revenues in Russia declined by 11 per cent to Rs 410 crore primarily due to the Rouble devaluation. Strong sales growth in Venezuela pushed its sales in other emerging market by 57 per cent to Rs.420 crore. DRL's domestic sales improved by 14 percent to Rs.480 crore with volume expansion in its focus brands.

For the fiRs.half ended September 2014, DRL's consolidated net sales improved by 13.5 per cent to Rs.7,105 crore from Rs.6,262 crore in the similar period of last year. Its net profit improved to Rs.1,124 crore from Rs 1,051 crore, a growth of 7 per cent. EPS worked out to Rs.66.05 as against Rs.61.85 in the last period. Its R&D expenditure 46.9 per cent to Rs.798.84 crore from Rs.543.84 crore. Its taxation provision went up sharply by 105 per cent to Rs.270.13 crore from Rs 132.04 crore.

On standalone basis, DRL's net sales for the fiRs.half ended September 2014 increased by 15.6 per cent to Rs.5,105 crore from Rs.4,416 crore and its net profit improved by 23.6 per cent to Rs.1,036 crore from Rs.838 crore. Standalone EPS worked out to Rs.60.87 as compared to Rs.49.31 in the last period.