Dr. Reddy’s Q2 profits plunges 57 %; sequentially performance improves

Hyderabad based generic drug major Dr. Reddy’s Laboratories posted an in- line set of Q2 earnings in accordance with the street estimates. Sequentially performance looked better at Rs 308.9 in Q2 crore as against Rs 153.5 crore in the previous quarter. Its India business improved in Q2.

Revenue during the quarter declined 10.1 percent to Rs 3,616.3 crore on yearly basis, dented by US and emerging markets business. However, sequentially the same grew by 11.5 per cent.

EBITDA fell 43.9 per cent to Rs 640 crore and margin contracted by 1050 basis points to 17.9 per cent compared with year-ago period.

Dr Reddy's Labs global generics business declined 12 per cent YoY as North America, which contributes 45 percent to total business, showed a 13 per cent de-growth (but up 4 percent QoQ), Europe business fell 16 per cent (up 10 per cent QoQ) and emerging markets declined 27 per cent.

"All major businesses have shown sequential improvement over the previous quarter with revenues growing 11 per cent and EBITDA by 61 per cent. We have made considerable progress in our remediation efforts and continue to work on addressing concerns of the regulators," GV Prasad, co-chairman and CEO said.

Reacting to the numbers DRL shares were trading up by 2 per cent at Rs 3155.7 on NSE.