Dr Reddy’s consolidated net profit falls 28% at Rs 554 cr in Q4FY21; approves dividend of Rs 25

Pharma major Dr Reddy’s Laboratories on Friday released its financial year for the quarter ended 31 March 2021, below street’s estimates. The profits declined with a marginal increase in revenues. The company in its filing to exchanges said that the year-on-year (YoY) decline was primarily on account of higher volumes last year due to the pandemic-related stocking up and price erosion. 

It has also approved a final dividend of Rs 25 per share for the financial year 2020-21. 

The company’s consolidated net profit slumped by around 28 per cent to Rs 554 cr in the March-ended quarter as compared to Rs 764 crore in the corresponding quarter of FY20. Its consolidated revenues grew 7 per cent to Rs 4,728 cr year-on-year basis in the fourth quarter of FY21. 

Dr Reddy's reported a muted top-line performance due to a weak show in the North American market, which is its largest revenue contributor. North America's business declined by over 3 per cent on a YoY basis, however, it grew by one percent quarter-on-quarter basis. 

On a YoY basis, DRL’s India business grew by 23 per cent, while Europe's business by 15 per cent. 

Meanwhile, the consolidated operating margin grew by 140 basis points in this quarter, the company said. Its expenses on research and development in the quarter stood at Rs 409 cr, or 8.7 per cent of sales. 

On the back of weak quarterly earnings, Dr Reddy’s Lab shares declined by over 1.5 per cent to trade at around Rs 5220 per share level. Immediate after the release of results, it was trading flat. 

Along with the earnings, the company also announced the coronavirus vaccine price in India. Russia’s Sputnik V vaccine will be priced in India at Rs 948 per dose with an additional 5 per cent GST, said DRL in its filing, adding further, it could be cheaper when it is manufactured domestically. 

Hyderabad-based Dr Reddy’s is a manufacturing partner of Russia’s Sputnik V vaccine in India. India will import Sputnik V frozen form from Russia this quarter. The first batch of Russia invented vaccine was arrived in India on May 1 and has received regulatory clearance for emergency use.