The Hindu : Business : Dr. Reddy’s net profit dips

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Thursday, Oct 25, 2007
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Dr. Reddy’s net profit dips

Special Correspondent

Supply constraints from German arm impacts profit

HYDERABAD: The net profit of Dr. Reddy’s Laboratories dipped by five per cent by the end of the second quarter of the current financial year. “By and large, it is an okay quarter,” said Managing Director and Chief Operating Officer of the company, K. Satish Reddy.

The topline suffered a negative growth of 37 per cent. Net income is pegged at Rs. 267.20 crore in the quarter under review as opposed to Rs. 279.80 crore in the quarter in reference last fiscal.

Addressing a press conference here on Wednesday, Mr. Reddy said the company clocked a revenue of Rs. 1,267 crore in the second quarter against Rs. 2,003.90 crore. The gross profit was put at Rs. 650 crore against Rs. 828.80 crore.

Due to reduction in tax structure in Germany, it gained an income benefit of Rs. 124.80 crore. G. V. Prasad, Vice-Chairman and CEO, said the income-tax benefit was a one-time affair and it would not have any cumulative effect. He said the one-time revenue gain of Rs. 780.80 crore from the authorised generic sale during the six-month marketing exclusivity for Simvastatin and Finasteride in the second quarter of 2006-07 should be excluded while comparing the performance of the company.

Supply constraints from the company’s German subsidiary, Betapharm, also had an impact on the profits.

Therefore, the company was moving its manufacturing operations from Germany to India and the process would be complete by March 2008.

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