Drug-maker Dr Reddy’s Laboratories’ consolidated net profit fell 15.6 per cent to ₹481 crore in the fourth quarter ended March 31, compared with ₹570 crore in the year-ago period.
Total revenue, however, increased marginally to ₹3,480 crore in the quarter from ₹3,339 crore a year earlier.
The decline in profit was due to an increase in research and development (R&D) expenses to ₹398 crore, K Satish Reddy, newly-nominated Chairman, told reporters here on Tuesday.
About 60 per cent of the R&D went into the global generics and pharmaceutical services and active ingredients, while the remaining was invested in proprietary products and biologics, said Abhijit Mukherjee, President, Global Generics.
In the current fiscal, the R&D expenditure could be in the range of 10-11 per cent of the revenue, or between ₹1,000 crore and ₹1,500 crore, according to Saumen Chakraborti, Chief Financial Officer.
For the full year ended March 2014, the company posted ₹2,151 crore net profit (₹1,677 crore), marking a 28 per cent increase on account of higher generics sales in North America.
Revenue increased 14 per cent to ₹13,217 crore (₹11,626 crore).
Revenue in the emerging markets and the rest of the world grew 21 per cent and 33 per cent, respectively.
In Europe, it declined 3 per cent.
The board had recommended a final dividend of ₹18 per equity share of ₹5 face value for the financial year 2013-14.
On Tuesday, the company’s scrip lost 3.99 per cent to close at ₹2,610.70 on the BSE.
Top level changes Dr Reddy’s has made significant top level changes.
The moves, approved by the board, saw the rise of the 47-year-old Satish Reddy, son of founder-chairman K Anji Reddy, as the new Chairman. He replaces GV Prasad, who has now been made Co-Chairman.
Immediately after the death of Anji Reddy in March 2013, the board had appointed Prasad as Chairman and CEO. Satish Reddy was made Vice-Chairman, Managing Director and Chief Operating Officer.
The board also appointed Abhijit Mukherjee, previously President of global generics, as the new COO.
Prasad, the son-in law of Anji Reddy, will now hold the posts of Managing Director and CEO.
When asked about the reasons for the changes, Satish Reddy, who is also the president of the Indian Pharmaceutical Alliance (IPA), told Business Line it was driven by Governance issues.