Dr. Reddy’s Laboratories (DRL) reported first-quarter consolidated profit surged sevenfold to Rs. 476 crore, from Rs. 66.6 crore a year earlier, helped by operational efficiencies and its generic version of opioid dependence treatment Suboxone.
Revenue from operations increased 12% to Rs. 3,736.5 crore (Rs. 3,333.2 crore) as per Indian Accounting Standards, the Hyderabad-based drugmaker said.
Improved operational efficiencies, foreign exchange gains as well as the introduction of generic Suboxone in the U.S. — whose sales had to be suspended in the wake of a court order — primarily spurred profit growth. Focus on operational efficiencies helped significantly improve margins, co-chairman and CEO G.V. Prasad told reporters here on Thursday.
Mr. Prasad said DRL remained “cautiously optimistic” about the outlook. “The Subaxone verdict will have some kind of impact on ongoing performance, we wouldn’t have benefit of that in the next few quarters.”
‘Part of evolution’
On recent lay-offs, Mr. Prasad said “over time, an organisation’s growth and business model improves, changes… one has to look at number of layers and spans. As organisations evolve periodically, they do these things. This is part of that process.”
DRL expects to maintain R&D expenditure this fiscal around the FY18 level of Rs. 1,826 crore, CFO Saumen Chakraborty said.
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