Mumbai: Indian drug maker Dr. Reddy’s Laboratories Ltd on Tuesday posted a worse-than-expected 68.3% fall in March quarter net profit to Rs1.03 billion rupees ($24 million).
Dr. Reddy’s, the only Indian drug maker listed in New York, had reported a net profit of Rs3.25 billion rupees a year earlier, helped by one-time gains from a 180-day exclusivity period for the generic version of GlaxoSmithKline’s anti-nausea drug Zofran.
Revenues decreased to Rs13.25 billion in the Jan-March quarter from Rs15.57 billion a year earlier.
A Reuters poll of brokerages had forecast the Hyderabad-based firm’s net profit would fall 63.9% to Rs1.17 billion, with revenue forecast to fall 17.25 to Rs12.89 billion. Last month, Ranbaxy Laboratories, India’s biggest drug maker by sales, reported a forecast-beating 7% rise in net profit to Rs1.53 billion.
During the March quarter, shares in Dr Reddy’s, which has a market worth of about $2.6 billion, fell 19.6% in a Mumbai market that fell 23%.
In January, the company said it hoped for a better performance in the new fiscal year on improved generics sales in India and Russia and a turnaround of its underperforming German business.
Germany’s Betapharm, which Dr. Reddy’s bought in 2006 for $572 million, has been a drag on earnings due to supply constraints and price falls.
Hyderabad-based Dr. Reddy’s is moving Betapharm’s manufacturing operations to India and other manufacturers within Europe.
Shares in Dr. Reddy’s, which has a market worth of about $2.6 billion, ended down 1.75 percent at 638.35 rupees after falling as low as 634 rupees after the results in a weak Mumbai market.
The stock had lost 19.6 percent in the March quarter, while the main BSE index dropped 23 percent.
In the March quarter, Dr. Reddy’s completed acquisitions of Dow Chemicals Co’s Dowpharma small molecules business, and BASF’s <BASF.DE> pharmaceutical contract manufacturing business for undisclosed sums.
It also bought Italian generics firm Jet Generici Srl, and said it would collaborate with Skyepharma Plc on new products, utilising Skyepharm’s proprietary drug delivery system.
Analysts remain largely positive on the sector, as drugs with annual U.S. sales of $50 billion are expected to go off patent by 2010, creating more opportunities for Indian firms to sell generic versions, or cheap copies of branded products.