DRIVIN G ROWTH - Dr. Reddy's

Rs. 108 million (US$ 2.25 million) from
Novo Nordisk on DRF-2725 entering Phase
III clinical trials, and (ii) contract research
service fees of Rs. 79 million.
Other income of Rs. 515 million was on
account of (i) foreign exchange gains worth
Rs. 236 million, (ii) interest on fixed deposits
of Rs. 99 million, (iii) export benefits of
Rs. 71 million, and (iv) miscellaneous income
of Rs. 109 million.
Material costs as a % of the total sales is at
28% as against 33% in fiscal 2001 primarily
on account of sales of Fluoxetine (21% of
total revenues), on which gross margins are
higher, and increase in international sales
volume of 40% excluding fluoxetine.
Conversion charges decreased to Rs. 62.5
million in financial year 2001-2002 as
compared to Rs. 66.3 million in financial year
2000-2001 on account of decline in conversion
charges in formulations and bulk SBUs.
Personnel cost increased to Rs. 1,006
million in financial year 2001-2002 as
compared to Rs. 764 million in financial year
2000-2001 on account of increase in salaries,
new recruitments and increase in training
and development expenses.
Operating and other expenses increased to
Rs. 2,925.8 million in financial year 2001-
2002 as compared to Rs. 2,242.3 million in
financial year 2000-2001, mainly due to
increase in selling expenses, repairs and
maintenance and power and fuel charges.
Earnings before interest, taxes,
depreciation and amortisation (EBITDA)
increased by 104 per cent to Rs. 5,314
million in 2001-02. The EBITDA margin in
2001-02 was 34 per cent compared to 26
percent in the previous year.
Expenditure on account of interest and
other financial charges reduced from Rs. 403
million in 2000-01 to Rs. 109 million in
2001-02. This was because Dr. Reddy’s
retired outstanding debt worth Rs. 3,629
million by March 31, 2002.
Profit before tax (PBT) grew by 168 per
cent to Rs. 4,708 million.
Although current tax provisions increased
from Rs. 311 million in 2000-01 to Rs. 395
million in 2001-02, the Company gained
from a deferred tax benefit of Rs. 284
million. Consequently, the tax provision
declined from Rs. 311 million in 2000-01 to
Rs. 111 million in 2001-02.
Profit after tax (PAT) increased by 218 per
cent to Rs. 4,597 million. The PAT margin
increased by 15 per cent in 2000-01 to 30 per
cent in 2001-02.
Dr. Reddy’s earning per Rs. 5 share (EPS)
in 2001-02 was Rs. 60.41 compared to an
EPS of Rs. 22.83 in 2000-01 — a 165 per
cent rise over the EPS for 2000-01.
Chart D gives the geographical distribution
of sales.
CHART D
DR. REDDY’S LABORATORIES LTD. | MANAGEMENT DISCUSSION AND ANALYSIS | ANNUAL REPORT 2001-2002
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