Hyderabad, May 13: Dr Reddy’s Laboratories has undertaken a significant rejig at the top with the local pharma major’s two senior-most executives redefining their responsibilities as the company announced a 16 per cent drop in net profit in the January-March quarter.
Satish Reddy, son of late founder K. Anji Reddy, has been made the chairman of the board. Reddy, who was previously the vice-chairman, managing director and the chief operating officer, has been entrusted with the responsibility to handle the group’s corporate social responsibility (CSR) efforts.
G.V. Prasad, son-in-law of Anji Reddy, has been appointed as the co-chairman and managing director. He will also continue as the chief executive officer.
Prasad was appointed as stop-gap chairman of the board in April last year following the death of Anji Reddy.
Though the sudden changes raised eyebrows, the company said it was aimed at separating the roles of the chairman, CEO and managing director. “We want to re-assess and reorganise the corporate leadership roles and stabilise the corporate governance in the company,” Prasad said.
“The role of chairman assumes significance as it drives corporate governance across the board besides government relations and is the custodian of the corporate brand,” Prasad said.
“By re-organising our roles, we would be able to focus more on distinct activities while simultaneously providing space for internal growth to our talented senior management team,” Satish Reddy said.
Dr Reddy’s Laboratories has reported a 15.6 per cent drop in net profit at Rs 481.60 crore for the quarter ended March 31 against Rs 570.89 crore a year ago because of higher expenditure.
Total revenues rose marginally to Rs 3,480 crore from Rs 3,339 crore a year ago.
For the full year ended March 31, net profit stood at Rs 2,151 crore, a 28 per cent increase from Rs 1,677 crore in the previous fiscal on account of higher generic sales in North America.
Revenues increased 14 per cent to Rs 13,217.03 crore from Rs 11,626.56 crore in 2012-13.
The company said the selling, general and administrative (SGA) expenses rose to Rs 1,030.73 crore in the fourth quarter of last fiscal from Rs 872.24 crore in the year-ago period. Research and development (R&D) expenses also rose to Rs 398.48 crore from Rs 232.61 crore.
Reddy said global generic sales increased 27.4 per cent to Rs 10,516 crore from Rs 8,256 crore in the previous year with higher sales in North America at Rs 5,530 crore against Rs 3,785 crore.
The Dr Reddy’s scrip today fell 3.99 per cent to Rs 2,610.70 on the Bombay Stock Exchange.