The drugmaker reported 7 per cent year-on-year growth in consolidated revenues to Rs 4,728 crore for the fourth quarter of the last financial year, also below Street’s estimates.
The company’s board, however, approved a final dividend of Rs 25 per share for the financial year 2020-21.
DRL’s muted topline performance was largely due to a weak show in the North American market, its largest revenue contributor. Sales in North America market fell 3 per cent on-year to Rs 1,749.1 crore. On a sequential basis, the market grew merely 1 per cent.
The year-on-year decline was primarily on account of higher volumes last year due to the pandemic-related stocking up and price erosion, the company said.
At home, growth was strong compared with the year-ago period largely because of the effect of low base, due to the national lockdown and supply crunch last year. Sales in India jumped 23 per cent on a year-on-year basis to Rs 844.5 crore during the quarter.
Sales in the European market were firm as they grew 15 per cent on year to Rs 395.6 crore. Emerging markets sales climbed 10 per cent to Rs 884.5 crore.
On the operating front, it was a strong quarter for the company as its consolidated operating profit grew 13 per cent on year to Rs. 1,133 crore, above Street’s expectations.
Gross margins in the quarter rose by 220 basis points on year to 53.7 per cent, reflecting a better product mix and increased operating leverage, which was partly offset by price erosion and lower export benefits.
DRL’s consolidated operating margin in the quarter grew by 140 basis points on year to 24 per cent. The company said its expenses on research and development in the quarter stood at Rs. 409 crore, or 8.7 per cent of sales.
Dr Reddy’s shares traded up 0.6 per cent at Rs. 5,333.35 on National Stock Exchange after the earnings announcement.
