Last updated: 29 Jan, 2021 | 07:33 am
Profit impacted due to impairment charges: Dr Reddy’s has reported a net profit of ₹19.8 crore in Q3FY21, sharply below street estimates as the bottomline was impacted due to impairment charges. Analysts had estimated a profit of about ₹700 crore. The company’s bottomline in the quarter was adversely affected by a one-time impairment charge of Rs. 592.6 crore with respect to certain products.
Exceptional items drag: The profits were impacted due to trigger based impairment charge taken on a few acquired products including gNuvaring. Excluding the impairment charge, the Profit before Tax stood at Rs 882 crore.
Revenue in-line: The company’s consolidated revenues grew 12% YoY to Rs. 4,930 crore, which was largely in-line with street estimate of Rs. 4,975 crore. The gross margin stood at 53.8% against 54.1% in the previous year.
Strong growth in Europe & India: Sales rose in Europe (up 34% YoY to ₹410 crore) and India ( up 26% YoY to ₹960 crore). North America witnessed a growth of 9 percent YoY while emerging markets grew 5 percent YoY during the December quarter.
While the company has nearly met estimates on the top line, the bottom line has come in below estimates. Competitor Launching a generic version of the product in DRL’s product segment, decrease in the market potential due to higher than expected price erosion have led to the impairment. The company said that it is progressing well on the phase-3 clinical trials for Sputnik V vaccine in India. DRL shares were trading 3.5% lower at ₹4,705 on BSE.