Mini Project on Dr.

Reddys Lab
Dr. Reddys began as an API manufacturer in 1984, producing high-quality APIs to first the Indian, and later, the international markets. In 1987, we started our formulations operations and, after becoming a force to reckon with in the Indian formulations market, went international in 1991
Dr. Reddys Lab Pharmaceuticals Industry By U.D. Raj Ranjan

12/10/2012

Overview Dr. Reddys began as an API manufacturer in 1984, producing high-quality APIs to first the Indian, and later, the international markets. In 1987, we started our formulations operations and, after becoming a force to reckon with in the Indian formulations market, went international in 1991. Today, our value proposition to our customers derives from an optimal operating system in which operations, product development and marketing & sales are fully integrated. Operations and the supply chain are aligned to ensure high availability, pull based replenishment of products at the retail level and superior inventory turns to our customers. This advantage is combined with a highly effective prescription generation detailing effort. A field force of over 2700 motivated and knowledgeable representatives supported by an integrated network of back-end services and armed with handheld devices for quick information access add value to every customer call and interaction. Dr. Reddys - India today is more than a 200 million dollar venture with presence in almost all major therapeutic areas. Our finished dosage business in India started in 1986 with launch of Norilet (norfloxacin). Our market penetration through nearly 3000 sales force who connect to more than 3,00,000 doctors on a regular basis has yielded us reaching all corners of the country and providing affordable and innovative medicines in all major therapeutic areas like gastrointestinal, oncology, pain management, cardiovascular, dermatology, diabetes, etc. Eight of our brands feature in the top-300 brands in India that include drugs like Stamlo, Reditux, Omez and Ketorol. Alongside the presence of end-to-end pharmaceutical capabilities within the organization helps us cater customer and patient needs much more effectively. Medicines like for any other geography, we manufacture at our USFDA approved finished dosage facility with utmost importance on quality and efficacy of the drugs. Recently we have deepened our focus into the rural markets in India to ensure the expansion of our reach. In this initiative we have collaborated with our CSR wing, Dr. Reddys Foundation to help us reach the millions who are still away from effective treatment and availability of the right medicines. Apart from manufacturing and distribution of medicines we also provide patient care through our various initiatives like Sparsh, Life at your Doorstep, etc. (where patients are given free treatment and medicines), and educate and create awareness among healthcare professionals through DRFHE to cater to the millions who are in need of proper treatment across the country.

Vision and Mission: To become a discovery ruled global pharmaceutical company with a core purpose of helping people lead healthier lives. Mission: To be first Indian Pharmaceutical company that successfully takes its products from discovery to commercial launch globally. :

Vision and Mission: To become a discovery ruled global pharmaceutical company with a core purpose of helping people lead healthier lives. Mission: To be first Indian Pharmaceutical company that successfully takes its products from discovery to commercial launch globally. SWOT Analysis: Strength: - Wholly owned subsidiaries in US and Europe. Joint ventures in China and South Africa. -Market pharmaceuticals products in 115 countries. :

SWOT Analysis: Strength: - Wholly owned subsidiaries in US and Europe. Joint ventures in China and South Africa. -Market pharmaceuticals products in 115 countries.

-Contributes to companys high profit margin of around 34% of sales. -6120 employees worldwide including 323 are dedicated towards new drug discovery research.Manufactures and market over 250 medicines targeting a wide range of therapies. : -Contributes to companys high profit margin of around 34% of sales. -6120 employees worldwide including 323 are dedicated towards new drug discovery research.- Manufactures and market over 250 medicines targeting a wide range of therapies. Turnover: About 6900 crores from single manufacturing units in Hyderabad. 39% rise in its 1st quarter 2009-2010, revenues at Rs. 1,818 crores, against Rs. 1,500 crores in the same previous year. : Turnover: About 6900 crores from single manufacturing units in Hyderabad. 39% rise in its 1st quarter 2009-2010, revenues at Rs. 1,818 crores, against Rs. 1,500 crores in the same previous year.

Current Management of the Company WHOLE-TIME DIRECTORS

Dr. Anji Reddy Chairman

G V Prasad Vice Chairman and Chief Executive Officer

Satish Reddy Managing Director & Chief Operating Officer

MANAGEMENT TEAM

Abhijit Mukherjee President - Global Generics

Dr. Amit Biswas Executive Vice President - Integrated Product Development (IPDO)

Dr. R AnanthanarayananPresident - Pharmaceutical Services and Active Ingredients (PSAI)

Dr. Cartikeya Reddy Senior Vice-President & Head - Biologics

Umang Vohra Executive Vice President & Chief Financial Officer

Dr. Raghav Chari Senior Vice President - Proprietary Products

M V Ramana Senior Vice President & Head - Emerging Markets, Global Generics

Samiran Das Executive Vice President & Head FTO and GGPM

Saumen Chakraborty President & Global Head of Quality, HR & IT

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDING 31.3.2005 Amount (Rs.)

Particulars Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses Operating Profit PBDIT Interest PBDT Depreciation

1,625.6 76.80 1,548.76 -8.41 29.62 1,569.97

574.04 43.21 178.66 47.43 546.35 25.48 0.00 1,415.17 163.21 154.80 12.73 142.07 92.46

Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Shares in issue (lakhs) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs)

5.23 44.38 0.00 44.38 -21.10 65.46 841.14 0.00 38.26 5.37

765.19 8.55 100.00 271.05

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDING 31.3.2006 Particulars Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses Operating Profit PBDIT Interest PBDT 792.87 48.23 205.85 74.95 567.59 33.42 0.00 1,722.91 317.07 413.05 24.63 388.42 2,101.97 98.71 2,003.26 95.98 36.72 2,135.96 Amount (Rs.)

Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Shares in issue (lakhs) Earning Per Share (Rs) Equity Dividend (%)

111.33 13.31 263.78 -0.01 263.77 52.64 211.12 930.04 0.00 38.35 5.38

766.95 27.53 100.00

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDING 31.3.2007 Particulars Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses Operating Profit PBDIT Interest PBDT 1,144.82 57.83 299.04 155.63 777.06 44.76 0.00 2,479.14 1,327.35 1,561.30 51.96 1,509.34 3,872.92 89.66 3,783.26 233.95 23.23 4,040.44 Amount (Rs.)

Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Shares in issue (lakhs) Earning Per Share (Rs) Equity Dividend (%)

133.50 18.16 1,357.68 -0.02 1,357.66 188.99 1,176.86 1,334.32 0.00 62.97 10.70

1,679.12 70.09 75.00

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDING 31.3.2008 Particulars Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses Operating Profit PBDIT Interest 1,347.33 77.12 366.28 130.35 896.54 37.44 0.00 2,855.06 582.70 779.99 14.69 3,428.40 84.51 3,343.89 197.29 93.87 3,635.05 Amount (Rs.)

PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Shares in issue (lakhs) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs)

765.30 161.99 20.71 582.60 -0.06 582.54 108.88 475.22 1,507.73 0.00 63.06 10.72

1,681.73 28.26 75.00 286.12

Balance Sheet of Dr.Reddys Laboratoriesas on 31.3.05

Liabilities Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities Assets Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance

Amount (Rs.) 38.26 38.26 0.00 0.00 2,035.82 0.00 2,074.08 3.27 269.96 273.23 2,347.31

1,004.22 441.68 562.54 60.13 358.46 303.81 417.64 41.09

Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs)

762.54 387.70 850.64 2,000.88 0.00 451.50 183.18 634.68 1,366.20 0.00 2,347.33 189.19 271.05

Balance Sheet of Dr.Reddys Laboratories as on 31.3.06

Liabilities Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities Assets Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets

Amount (Rs.) 38.35 38.35 0.00 0.00 2,223.79 0.00 2,262.14 145.13 778.74 923.87 3,186.01

1,052.90 491.08 561.82 112.92 911.36 443.10 581.22 25.50 1,049.82

Loans and Advances Fixed Deposits Total CA, Loans & Advances Deferred Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs)

723.61 625.44 2,398.87 0.00 624.25 174.70 798.95 1,599.92 0.00 3,186.02 2,409.27 294.95

Balance Sheet of Dr.Reddys Laboratories as on 31.3.07

Liabilities Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities Assets Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets

Amount (Rs.) 83.96 83.96 0.00 0.00 4,289.40 0.00 4,373.36 1.92 327.98 329.90 4,703.26

1,291.19 609.15 682.04 280.61 966.99 487.58 1,055.70 148.60 1,691.88

Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs)

1,028.56 1,308.11 4,028.55 0.00 731.96 522.97 1,254.93 2,773.62 0.00 4,703.26 1,896.92 260.45

Balance Sheet of Dr.Reddys Laboratories as on 31.3.08

Liabilities Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities Assets Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets

Amount (Rs.) 84.09 84.09 0.00 0.00 4,727.72 0.00 4,811.81 3.40 458.91 462.31 5,274.12

1,750.21 762.80 987.41 245.71 2,080.71 640.93 897.71 67.19 1,605.83

Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets

1,272.02 470.15 3,348.00 0.00 786.36 601.38 1,387.74 1,960.26 0.00 5,274.09

Contingent Liabilities Book Value (Rs)

1,892.55 286.12

Profit & Loss - Dr. Reddy's Laboratories Ltd. Mar'12 Mar'11 Mar'10 Mar'09 Mar'08

12 Months 12 Months 12 Months 12 Months 12 Months INCOME: Sales Turnover Excise Duty NET SALES Other Income TOTAL INCOME EXPENDITURE: Manufacturing Expenses Material Consumed Personal Expenses Selling Expenses Administrative Expenses Expenses Capitalised Provisions Made TOTAL EXPENDITURE Operating Profit EBITDA Depreciation Other Write-offs EBIT Interest EBT Taxes Profit and Loss for the Year 340.60 2,018.10 831.20 625.00 1,009.70 0.00 0.00 4,824.60 1,861.70 1,927.70 301.10 40.30 1,586.30 69.20 1,517.10 346.80 1,170.30 274.10 1,670.50 702.70 477.00 844.70 0.00 0.00 3,969.00 1,219.50 1,335.00 247.90 26.80 1,060.30 9.90 1,050.40 158.50 891.90 221.40 1,482.10 516.40 443.80 643.40 0.00 0.00 3,307.10 1,088.50 1,269.80 222.40 19.30 1,028.10 16.00 1,012.10 238.70 773.40 195.90 1,469.90 412.50 448.70 714.50 0.00 0.00 3,241.50 758.00 1,007.70 193.60 19.70 794.40 27.40 767.00 168.60 598.40 207.46 1,253.46 366.28 375.37 558.60 0.00 0.00 2,761.19 582.70 739.35 161.99 20.71 556.65 14.69 541.96 108.88 433.08 6,780.20 93.90 6,686.30 0.00 6,752.30 5,285.80 97.30 5,188.50 0.00 5,304.00 4,469.60 74.00 4,395.60 0.00 4,576.90 4,080.40 80.90 3,999.50 0.00 4,249.20 3,428.40 84.51 3,343.89 0.00 3,500.53

Non Recurring Items Other Non Cash Adjustments Other Adjustments REPORTED PAT KEY ITEMS Preference Dividend Equity Dividend Equity Dividend (%) Shares in Issue (Lakhs) EPS - Annualised (Rs)

-257.90 -0.3 0.30 912.40

1.50 -0.4 0.40 893.40

72.70 -0.1 0.10 846.10

-37.50 -0.1 0.10 560.90

40.65 -0.0 1.55 475.22

0.00 233.10 274.88 1,695.60 53.81

0.00 190.40 225.05 1,692.53 52.78

0.00 190.00 225.11 1,688.45 50.11

0.00 105.30 125.05 1,684.69 33.29

0.00 63.06 74.99 1,681.73 28.2

Growth over 20 yearsThe company is growing by 39% and improving EBITA by 50%. The profitability has rose by 44%. : Growth over 20 yearsThe company is growing by 39% and improving EBITA by 50%. The profitability has rose by 44%

Weakness: -High amount of revenues from overseas. -Over reliance on partnerships.- Lack of resources similar to US and Europe based competitors to develop a drug to marketing stage. -Lack of patent legislation in India horns sales in its products. : Weakness: -High amount of revenues from overseas. -Over reliance on partnerships.- Lack of resources similar to US and Europe based competitors to develop a drug to marketing stage. Lack of patent legislation in India horns sales in its products.

Opportunities: -Takes a molecule from its pipeline all the market place cost- effectively.Domestic Genetic drugs market. -Buy back of the integrated drug development company from ICICI ventures and Citigroup. : Opportunities: -Takes a molecule from its pipeline all the market place cost- effectively.Domestic Genetic drugs market. -Buy back of the integrated drug development company from ICICI ventures and Citigroup.

Threats: -Needs to give FDA approval for all sources and products.- Products have to pass strictly FDA trials before going to market, which can be costly and time consuming.Competitors from US and European countries. -Lost the case against Pfizer for the use of generic form of Norvasc drug, legal cost of $10 million and loss of market opportunities. : Threats: -Needs to give FDA approval for all sources and products.- Products have to pass strictly FDA trials before going to market, which can be costly and time consuming.Competitors from US and European countries. -Lost the case against Pfizer for the use of generic form of Norvasc drug, legal cost of $10 million and loss of market opportunities.

Products: Active Pharmaceutical Ingredients (API)Custom Pharmaceuticals Services Generic Dosages Branded Dosages (such as- Omez, Nise, Stamlo, Ciprolet, Enam, Ketorol Important core product of the company Dr Reddy's Product Name Amlodipine-DRLA 5mg Amlodipine-DRLA 10mg Clopidogrel-DRLA Escitalopram-DRLA 10mg Escitalopram_DRLA 20mg Finpro-DRLA Levecetam-DRLA 250mg Levecetam-DRLA 500mg Levecetam-DRLA 1000mg Lisinopril-DRLA 5mg Lisinopril-DRLA 10mg Lisinopril-DRLA 20mg Ondansetron-DRLA 4mg Tabs 10 Ondansetron-DRLA 8mg Tabs 10 Ondansetron-DRLA 4mg Tabs 4 Ondansetron-DRLA 8mg Tabs 4 Ondansetron ODT-DRLA 4mg Tabs Molecule Amlodipine Amlodipine Clopidogrel Escitalopram Escitalopram Finasteride Levetiracetam Levetiracetam Levetiracetam Lisinopril Lisinopril Lisinopril Ondansetron Ondansetron Ondansetron Ondansetron Ondansetron Therapeutic Area Cardiovascular Cardiovascular Cardiology Central Nervous System Central Nervous System Urology Central Nervous System Central Nervous System Central Nervous System Cardiovascular Cardiovascular Cardiovascular Antiemetics Antiemetics Antiemetics Antiemetics Antiemetics Dosage Tablet Tablet Tablet Tablet Tablet Tablet Tablet Tablet Tablet Tablet Tablet Tablet Tablet Tablet Tablet Tablet Tablet

10 Ondansetron ODT-DRLA 8mg Tabs 10 Ondansetron ODT-DRLA 4mg Tabs 4 Ondansetron ODT-DRLA 8mg Tabs 4 Pantofast-DRLA 20mg Pantofast-DRLA 40 mg Risperidone-DRLA 0.5 mg Risperidone-DRLA 1mg Risperidone-DRLA 2mg Risperidone-DRLA 3mg Risperidone-DRLA 4mg Sertraline-DRLA 50mg Sertraline-DRLA 100mg Terbinafine-DRLA Olanzapine-DRLA Olanzapine ODT-DRLA Quetiapine - DRLA Anastrozole-DRLA Letrozole-DRLA

Wafers Ondansetron Wafers Ondansetron Wafers Ondansetron Wafers Pantoprazole Pantoprazole Risperidone Risperidone Risperidone Risperidone Risperidone Sertraline Sertraline Terbinafine Olanzapine Olanzapine Wafer Quetiapine Anastrozole Letrozole Antiemetics Antiemetics Antiemetics Gastroenterology Gastroenterology Central Nervous System Central Nervous System Central Nervous System Central Nervous System Central Nervous System Central Nervous System Central Nervous System Dermatology Antipsychotic Antipsychotic Antipsychotic Oncology Oncology Tablet Tablet Tablet Tablet Tablet Tablet Tablet Tablet Tablet Tablet Tablet Tablet Tablet Tablet Tablet Tablet Tablet Tablet