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Dr Reddy's Laboratories Q1 profit falls 1.5%, revenue increases 11.4%
While the overall earnings fell short of expectations by market analysts, Dr. Reddy’s co-chairperson and managing director, GV Prasad, expressed confidence in improving margins in the upcoming quarters on the back of new launches.
Dr Reddy's Laboratories, the pharmaceutical company, reported a consolidated profit of ₹570.8 crore for the quarter ended June 30, 2021, as compared to net profit of ₹594.6 crore in the corresponding period a year ago, recording a 1.5% drop. The pharma major’s revenue during the quarter was pegged at ₹4,919 crore, recording a 11% growth as against ₹4,417.5 crore in the year-ago period.
Amid reporting a lower-than-expected quarterly earnings for Q1FY22, the Hyderabad based company has also been subpoenaed by the US market regulator Securities and Exchange Commission’s (SEC)for documents related to Commonwealth of Independent States (CIS) geographies.
“The company has commenced a detailed investigation into an anonymous complaint. The complaint alleges that healthcare professionals in Ukraine and potentially in other countries were provided with improper payments by or on behalf of the Company in violation of US anti-corruption laws, specifically the US Foreign Corrupt Practices Act. A US law firm is conducting the investigation at the instruction of a committee of the Company's Board of Directors. The investigation is ongoing. The Company has disclosed the matter to the US Department of Justice, Securities and Exchange Commission ("SEC") and Securities Exchange Board of India,'' Dr Reddy's said in the exchange filing.
''While the matter may result in government enforcement actions against the company in the United States and/or foreign jurisdictions, which could lead to civil and criminal sanctions under relevant laws, the probability of such action and the outcome are not reasonably ascertainable at this time,'' the company added.
While the overall earnings fell short of expectations by market analysts, Dr. Reddy’s co-chairperson and managing director, GV Prasad, expressed confidence in improving margins in the upcoming quarters on the back of new launches. He also credited the performance of this financial quarter to healthy sales growth.
"The financial performance of the quarter has been driven by healthy sales growth. I am confident about improving our margins in the upcoming quarters which will be led by the scale up of recent launches, new product launches and productivity,'' Prasad said.
