Dr Reddy's Labs Q4 PAT falls 76% on pricing pressure, low export benefit

Dr Reddy's Q4 results: The revenue was up 15% to Rs 5,437 crore for the quarter under review

Hyderabad-based Dr Reddy’s Laboratories (DRL) has posted a 76 per cent year-on-year (YoY) dip in profit after tax (PAT) to Rs 88 crore in Q4FY22 driven by pricing pressure in North America and Europe, lower export benefits, and an increase in the inventory provisions.

The revenue was up 15 per cent to Rs 5,437 crore for the quarter under review. For the full year, Dr Reddy’s posted a 13 per cent growth in revenues to Rs 21,439 crore, while its net profit was up 37 per cent to Rs 2,357 crore.

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Dr Reddy’s stock was trading up 0.74 per cent at 2 pm on the BSE at Rs 3,936 apiece. 

Dr Reddy’s co-chairman and MD, G V Prasad said: “We delivered healthy growth in revenue, though the profits were impacted by impairment charges. In spite of multiple external challenges, our core businesses performed well, driven by an increase in market share, some strong launches, and productivity improvement. We will continue to focus on growing our core businesses, invest in future growth drivers, and work towards greater integration of sustainability in our businesses."

In 2021-22, Dr Reddy’s India business, which accounts for 20 per cent of its overall turnover, did well.

Revenues from India for the year at Rs 4,200 crore, up 26 per cent YoY, thanks to increase in sales volume as well as prices of existing products. Dr Reddy’s said that the India business growth was also aided by Covid19 product sales. During the year, the company launched 20 new brands in India including the Sputnik-V vaccine for Covid19. During the quarter, India revenues grew by 15 per cent, while it has declined by 6 per cent sequentially.

The North American generics business has grown by only 6 per cent during the year to Rs 74,900 crore. This business accounts for almost 35 per cent of Dr Reddy’s consolidated revenues. The growth from new product launches was offset partially by price erosion. For Q4FY22 the North American revenues grew by 14 per cent YoY.

“During this quarter, we launched 3 new products – Vasopressin Injection, Nicotine Lozenges Cherry Flavour (OTC), and Clobetasol Shampoo in Canada and for the full year, we have launched 17 products. During the year, we filed 7 new Abbreviated New Drug Applications (ANDAs) with the US Food and Drug Administration (USFDA). As of 31st March 2022,” Dr Reddy’s said.