Dr Reddy's Lab Sept qtr net profit down 9.5% to Rs 13.42 billion
Hyderabad: Dr. Reddy's Laboratories, an Indian generic pharmaceutical company, announced on Tuesday that its second-quarter profits were impacted by one-time charges associated with its joint venture with Nestlé India and the acquisition of Nicotinell, reported Reuters
The company also recorded an impairment charge linked to supply chain challenges in the U.S. affecting a specific generic medical product, the report said.
For the quarter ending September 30, Dr. Reddy's reported a consolidated net profit after tax of 13.42 billion rupees ($159.6 million), reflecting a 9.5% decline, it said.
Chief Financial Officer MV Narasimham noted during the post-earnings call that the profit was further affected by a write-off of a debt tax asset due to changes in government land tax regulations.
Despite the profit drop, the drugmaker's total revenue surged by 16.5% to 80.38 billion rupees, exceeding analysts' expectations of an 11% increase, with North American revenue rising by 17%.
Generic drug manufacturers like Dr. Reddy's, Cipla, and Zydus have been facing challenges in the competitive U.S. market, primarily due to lower pricing pressures, commonly referred to as price erosion, the report said.
However, Dr. Reddy's noted that the impact of price erosion was minimal during this quarter, contributing to its double-digit growth in North America.
The company has also benefited from robust sales of its generic version of Bristol-Myers Squibb's popular cancer medication Revlimid, which launched in 2022, along with a strong diabetic drug portfolio that has supported growth in North America.
Revenue from the Indian market, the company's second-largest, rose by 18% to 13.97 billion rupees.
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