Dr Reddys

During Q4FY16, the pharma major had a one-time write off on account of Venezuela at Rs.431 crore and this is primary reason why the bottomline dented badly. Dr.Reddy’s posted a 85% (YoY) decline in net profit at Rs.75 crore. The write-off is a precautionary measure to write down outstanding receivables of Venezuela. That alone was not the reason; even its total income fell 3% to Rs.3756 crore and tax outgo jumped up 135% to Rs.174 crore. This came as a major disappointment as the overall market, on an average was expecting anywhere between 5 to 9% rise in bottomline. EBITDA was down 40% at Rs.480 crore and EBITDA margins slipped from 20.8% to 12.8%. This write off hiked up finance cost to Rs.265 crore, up from Rs.23 crore (YoY) – the company has shown the Venezuelan write-off in finance costs.

In terms of geography, North America in Q4 rose 12%, Europe was down 18%, India was up 11%, Emerging markets/CIS showed the sharpest fall of 31% and RoW was down 28%.

The company ended FY16 with a 4% rise in net sales at Rs.15,471 crore and net profit was down 10% at Rs.2001 crore.