Dr Reddy’s management rejig remains largely en famille
14 May 2014
In an organisational revamp at Dr Reddy's Laboratories, Satish Reddy, son of late founder-chairman Anji Reddy, on Tuesday took over as chairman of the company; while G V Prasad, son-in-law of Anji Reddy, has been appointed co-chairman and managing director.
Prasad's is something of a stop-gap appointment, as he is already the chief executive officer, having been appointed in April last year after Anji's death.
The Hyderabad-based company informed the Bombay Stock Exchange that its board of directors has decided to have separate roles for the chairman, managing director, and CEO.
"Satish Reddy has been appointed chairman of the board. He previously held the position of vice-chairman, managing director and COO. G V Prasad will continue as the CEO and provide leadership to the company in an executive role. Prasad has also been appointed as co-chairman and managing director," the company said in a statement.
Abhijeet Mukherjee, president, global generics has also been appointed as the chief operating officer. He will be responsible for both the global generics and pharmaceutical services and active ingredients (PSAI) businesses.
According to company officials, Satish Reddy is now expected to be the main architect of the company's branding formulations, new drug innovations and clinical trial modules for making a better foray in the US and Europe.
G V Prasad said, "We want to reassess and reorganise the corporate leadership roles and stabilise the corporate governance in the company. "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."
He added that the senior-level management changes will drive growth for the leadership across the board.
The company on Tuesday reported a 15.64 per cent fall in its consolidated net profit to Rs481.6 crore for the quarter ended 31 March 2014, mainly due to higher expenditure on research and development.
Net income of the company from sales and services increased to Rs3,480.9 crore from Rs3,339.94 crore during the corresponding period the previous year.
For the entire financial year ended March, net profit rose 28 per cent to Rs2,151.2 crore over the previous year, while net income from sales grew to Rs13,217.03 crore from Rs11,626.56 crore. Research and development expenses rose by 62 per cent.
Global generic sales increased 27.4 per cent year on year to Rs10,516 crore last year, mainly on account of higher sales in North America and the emerging markets. North America, which registered a yoy growth of 46 per cent, was largely driven by key launches in limited competition space. The emerging market business registered a y-o-y growth of 21 per cent while the Indian business posted only 8 per cent growth.
Chairman Satish Reddy said though there was some impact due to the Ukraine crisis, the Russian market grew 16 per cent y-o-y, largely driven by higher volumes of top brands and over-the-counter portfolio.
In the domestic market, there was a growth of 8 per cent to Rs1,571 crore due to higher sales in chronic therapy and new products launches. The company's generic sales in Europe declined 9.7 per cent to Rs697 crore.
The company filed 13 new products in the US and total 62 abbreivated new drug application are pending for approval with the US FDA, of which 39 are Para IV and nine have 'first-to-file' status.
