Finacial results: Dr Reddy’s Q3 net drops 29% to Rs 334 cr

Pharma major Dr Reddy's Laboratories on Thursday reported a 28.86 per cent YoY drop in net profit at Rs 334 crore for the December quarter. The company said the numbers were impacted by one-time charge of Rs 93 crore due to deferred tax on assets and liabilities of the US entity. 

The company had reported a net profit of Rs 470.01 crore in the corresponding quarter of last year.


"We recorded a sequential growth of 7 per cent despite continuing challenges such as price erosion in the US," said company CEO and Co-Chairman GV Prasad. 

Revenue for the quarter came in at Rs 3806 crore, which was up 7 per cent on YoY basis and 3 per cent on sequential basis. Gross margin for the quarter fell to 53.3 per cent from 59.1 per cent in the year-ago quarter, but were above the market expectations. During the quarter, the company incurred Rs 467 crore on research and development, which accounted for 12.3 per cent of revenues. 

Gross profit margins were in fact up nearly 300 basis points sequentially, aided by better product mix and a milestone receipt of Rs 130 crore in propritary products.On the other hand, the YoY fall in gross profit margin was down due to higher price erosions, increased competitive intensity in some of the comapny's key molecules in the US and adverse foreign exchange, the company said in a BSE filing.