MUMBAI (Business Intelligence Center)--Dr. Reddy's Laboratories Ltd. (500124.BY) expects revenue in the current fiscal year to grow in "double digits" as the Indian drug maker's recent acquisitions in Germany and Mexico begin to pay off.
Betapharm Group, which Dr. Reddy's acquired in February for EUR480 million, is expected to account for 15% to 20% of the drug maker's total consolidated revenue in the fiscal year ending March 31, Chief Financial Officer Saumen Chakraborty told Dow Jones Newswires in a recent interview.
"We expect Betapharm's contribution to our topline in that range since demand for its products is strong and it plans to launch nearly 10 to 12 new products in this fiscal year," he said.
Additionally, the New York-listed drug maker's acquisition of Roche Holding AG's (ROG.VX) manufacturing unit in Mexico last year for $59 million has contributed significantly to revenue from custom pharmaceutical services, or CPS, which is a process chain from chemical research to drug formulation.
"CPS, generics and active pharmaceutical ingredients, or API, businesses are sustaining their growth momentum despite pricing pressure," Chakraborty said.
During the fiscal first quarter ended June 30, revenue from CPS increased to INR1.42 billion from INR72 million in the year-earlier period, with revenue from the Mexican acquisition contributing nearly INR1.24 billion.
The company said revenue from its API business, increased to INR2.3 billion in the fiscal first quarter, compared with INR1.9 billion a year earlier, powered by sales in Russia and other former Soviet states.
Indian drug companies, best known for their generics, have been buying foreign drug makers with established brands and distribution networks, as profits from the U.S. thin amid growing competition.
International sales accounted for over 80% of Dr. Reddy's revenue in the first quarter.
In order to meet rising demand, Dr. Reddy's is adding capacity and setting up new plants in India, with the company planning to spend $100 million over an 18-month period that began in January.
"We are funding this expenditure partly through debt and partly through our cash flows," Chakraborty said, without elaborating.
Net profit for the April-to-June quarter rose more than fourfold to INR1.40 billion from INR347 million in the year-earlier period while revenue rose to INR14.05 billion in the quarter from INR5.59 billion a year earlier.
Dr. Reddy's reported net profit of INR1.63 million for last fiscal year. Revenue for the year ended March 31 increased nearly 25% to INR24.3 billion from INR19.47 billion a year earlier.
Dr. Reddy's doesn't provide exact forecasts for revenue and net profit.
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