Strong sales in the US and pharmaceutical services and active ingredients (PSAI) segment buoyed Dr Reddy’s September quarter sales by 27 per cent.
Operating margins improved by 2.9 percentage points to 24 per cent due to lower selling and administrative costs in the Russian market and lower R&D expenses.
US revenues were better than analyst estimates at Rs 927 crore, translating into a 47 per cent growth over the same period last year.
The growth in this market was driven by ramp up in sales of products such as Ziprasidone, Fondaparinux, Tacolimus to name a few.
Four products including Montelukast, Metoprolol and Atorvastatin were launched in US during the quarter.
The full benefit of the new launches will start flowing in from this quarter. PSAI segment posted a robust 33 per cent growth, on the back of increased supplies of products which lost patent protection and one-time high value orders for select products.
Revenues in the CIS market grew at a mediocre 14 per cent to Rs 384 crore, due to postponement of sales on account of delayed winter onset. India formulation sales grew at a slower 12 per cent to Rs 388 crore, compared with 15 per cent growth for the market.
Despite the lacklustre growth during the quarter, the management is confident of a gradual pick up in the domestic growth on the back of lower attrition and rebounding prescription growth.
Though the company may continue to show strength over the next two quarters, sustaining growth in FY14 remains a challenge.