Analyst Concall
Dr Reddy's says R&D focus more on high value products
This story was originally published at 22:37 IST on 5 November 2024
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--Dr Reddy's: Planning to launch 20 new products in FY25
--Dr Reddy s: Launched 7 new products in US in Apr-Sept
--CONTEXT: Dr Reddy's management comments in post-earnings analyst call
--Dr Reddy's: Higher R&D spending Jul-Sept due to focus on high value pdts
--Dr Reddy's: Plan to launch 20 new products in US FY25
--Dr Reddy's: Focused more on launching high value pdts in US
By Narayana Krishna and Arya S. Biju
HYDERABAD/MUMBAI - Dr Reddy's Laboratories Ltd. said it is focussed more on developing high value and high quality products for US and other global markets, as lack of meaningful and high value launches were hurting growth. The company's consolidated net profit for the September quarter fell 15% on year to INR 12.56 billion, even as revenue rose 16.5% on year to INR 80.38 billion.
Explaining the reason for increased spending on research and development in Jul-Sept in a post-earnings conference call on Tuesday, the company's management said the outcome of this spending will be reflected in the coming quarters. In Jul-Sept, the company's R&D spend was INR 7.3 billion, 9.1% of the total sales.
Dr Reddy's said though the focus is more on high quality research and high value opportunities, the product launches are subject to regulatory approvals, which would take time. The R&D investment is on injectables, peptides, biosimilars and other high value products, the company said.
Dr Reddy's expects to launch a total of 20 new products in 2024-25 (Apr-Mar). It has already launched seven products during Apr-Sept.
The company said its joint venture with Nestle India Ltd. started generating revenue during the September quarter but it may take some time to scale up.
The company said spending on sales and general administration during Jul-Sept was INR 23 billion, up 22% on year due to acquisition related costs. Marketing costs were also higher as the company tried to strengthen its existing brands.
On Tuesday, shares of Dr Reddy's ended at INR 1,272.20 on the National Stock Exchange, up 0.31% from the previous close. End
Edited by Ashish Shirke
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