What is your view on the quarterly numbers of Reddy Labs?

The Hyderabad based Dr. Reddy Laboratories has announced a steep 76% fall in net profits for Q4FY22 at Rs88 crore. However, this was more due to an exceptional write-off in the quarter. For instance, Reddy Labs took a one-time impairment charge of Rs751 crore in the quarter, in the absence of which the performance of the company would have been fairly good. The revenues still grew by 15% at Rs5,437 crore for Q4FY22.

In fact, the business saw several headwinds in the quarter. However, it has still managed to grow its North America vertical by 14% and its Europe as well as its India vertical by 15% and 12% respectively. Emerging markets were the one segment that saw the best growth, although one can argue that the base was small. Reddy Labs saw lower volumes amidst stiff competition and the tightness in the competitive American generics market continues.