Dr Reddys Laboratories: Q4FY14 Result Analysis

Dr Reddys Laboratories (DRL) came out with muted set of results for the quarter ended March 2014. The pharma major reported a 15.64% dip in its net profit on YoY basis which stood at to Rs 481.60 crore  for the quarter ended March 31, 2014. In the corresponding quarter last fiscal, the company reported net profit of Rs 570.89 crore. Net sales of the company in Q4FY14 however, rose to Rs 3480.90 crore from Rs 3339.94 crore in the year-ago period.

The selling, general and administrative expenses rose to Rs 1030.73 crore for the fourth quarter of last fiscal, from Rs 872.24 crore in the year-ago period. The research and development expenses also rose to Rs 398.48 crore for the quarter, from Rs 232.61 crore in Q4FY13. 

Coming to the segmental performance, the PSAI (Pharmaceutical Services And Active Ingredients) segment witnessed fall of 28% on YoY basis for Q4FY14 to stand at Rs 831.75 crore. However, global generics (Rs 2731 crore) and proprietary products (Rs 55.61 crore) witnessed gains of 21% and 16.41% respectively for Q4FY14 on YoY basis.

In a latest development shared in the media release, the company has informed that the Board has decided to have separate roles of the chairman and the managing director and CEO, it said. Satish Reddy has been appointed as chairman of the board. GV Prasad will continue as the CEO. Prasad has also been appointed as the co-chairman and managing director. DRL has recommended a final dividend of Rs 18 per equity share of Rs 5 for 2013-14.

The results that came out were below expectations and hence selling pressure in the counter in the coming few sessions cannot be ruled out.