Dr Reddy’s Q1 results: Consolidated PAT falls YoY to Rs 571 cr, misses estimates; sales rise 11%


MUMBAI: Dr Reddy’s Laboratories today reported a 1 per cent year-on-year decline in consolidated net profit to Rs 571 crore for the quarter ended June, which was below analysts’ expectations.

The company’s consolidated revenues rose 11 per cent on-year to Rs 4,919 crore for the reported quarter, but missed Street’s estimates.

“The financial performance of the quarter has been driven by healthy sales growth. I am confident about improving our margins in the upcoming quarters, which will be led by the scale up of recent launches, new product launches and productivity,” said co-chairman and managing director GV Prasad.

The topline performance of the company was led by the domestic and European operations. Sales in India jumped 69 per cent year-on-year to Rs 1,060 crore in the quarter helped by the low base of the year-ago period.

In Europe, revenues climbed 12 per cent on-year to Rs 399 crore as the steady improvement of demand and supply chain issues helped the company.

North American business was underwhelming in the quarter. Revenues in the region rose merely 1 per cent on-year despite a weak base and considerable product launches. On a sequential basis, sales declined because of price erosion in certain products, the company said.

The company did not have much to write home about on the operating front either. The company’s consolidated operating profit in the quarter slumped 13 per cent on-year to Rs 1,019 crore as pandemic-related cost benefits in the year-ago quarter largely dissipated.

The drugmaker’s consolidated operating margin in the quarter sank 560 basis points year-on-year to 20.7 per cent as expenses rose considerably.

Shares of Dr Reddy’s were down 3 per cent at Rs 5,236.6 on the National Stock Exchange.

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