Dr Reddy's beats Q3 profit estimates on strong US, European businesses

Hyderabad, 30 January (Reuters): Indian pharmaceutical firm Dr Reddy's Laboratories beat estimates for third-quarter profit on Tuesday, helped by strong performance in its generic drugs business in key U.S. and European markets.

The Hyderabad-based company reported an 11% rise in consolidated net profit to ₹1,381 crore ($166.17 million) for the quarter ended 31 December 2023, compared with analysts' estimates of ₹1,277 crore, according to LSEG data.

Revenue rose 6.6% to ₹7,237 crore, with the North American generics segment's revenue – the biggest contributor – rising 9.6%. Revenue from the European and Indian segments jumped 15.5% and 4.7%, respectively.

“We delivered another quarter of highest ever sales and robust financial performance, aided by new products performance and base business market share gain in the US, new products launch momentum and strong performance in Europe,” Managing Director GV Prasad said.

Lenalidomide, a generic version of Bristol Myers Squibb's cancer drug Revlimid, boosted the company's generics business in the US. Dr Reddy's launched the generic version in 2022.

However, the company said that revenue growth in the generics business was partially offset by ‘price erosion” in certain markets.

Indian generic drugmakers, which generate a bulk of their revenue from the US, have been grappling with pricing pressures amid intensifying competition, resulting in lower prices of drugs.

Larger rival Cipla's third-quarter profit topped analysts' estimates last week, helped by its North American business, while Sun Pharma is expected to report quarterly results on Wednesday.

Dr Reddy's, which also develops biosimilars, relatively cheaper copies of complex biological drugs used to treat illnesses such as cancer, settled 0.05% lower on Tuesday compared to a 0.99% lower close in the Nifty 50 index. ($1 = 83.1070 Indian rupees)

(This story has been published from the Reuters news feed without any major editorial changes)