R&D costs hit DRL net

Hyderabad: Dr Reddy’s Laboratories reported a 15.64 per cent dip in net profit to Rs 481.60 crore for the quarter ended March 31, 2014 mainly on account of higher expenditure on R&D and other heads.

The company said the selling, general and administrative expenses rose to Rs 1,030.73 crore for Q4 of last fiscal, from Rs 872.24 crore last year.

The company spent 11.4 per cent of its revenue on research and development in Q4 as against 6.6 per cent in Q3 as the competition in the pharma has intensified.

“The recent acquisition of Ranbaxy by Sun Pharma is bound to alter dimensions in Indian and world market thereby increasing the competition in the generic drug field,” said chairman Satish Reddy.

“There has been a consolidation wave in the generic drug market.  Sun Pharma, being a large player across countries will prove to be  tough competition,” Mr Reddy said.

In the yearly terms, DRL has posted a 28 per cent growth in net profit for fiscal 2014 at Rs 2,151 crore. The total revenue increased by 14 per cent to Rs 13,217 crore in the year under review mainly due to good performance in its key North American market, which posted 46 per cent jump in revenue, and the 33 per cent rise in geographies other than its key markets.