Pharma major Dr Reddy's Laboratories reported revenues in-line with Street expectations for the March quarter of financial year 2018-19 (FY19). However, it doesn't not seem to reflect in company's margins. The Hyderabad-headquartered firm posted a 4 per cent sequential and 14 per cent year-on-year (YoY) growth in revenues at Rs 4,017 crore in Q4FY19. The revenue for the full-year stood at Rs 15,385 crore, posting an 8 per cent YoY growth. The profit after tax (PAT) recorded a de-growth of 10 per cent quarter-on-quarter (QoQ) at Rs 434 crore on account of higher tax in Q4. It was up 44 per cent YoY. For the full year, the PAT at Rs 1,880 crore was up 92 per cent YoY.

Revenues from emerging markets showed a 28 per cent YoY growth and revenue from India was a high point, posting a 12 per cent YoY growth. This resulted in the company going three notches up  (from 16 as of March 2018 to 13 now) in the IQVIA (erstwhile IMS Health) MAT pecking order in India.

However, on the EBITDA at 22 per cent, Saumen Chakraborty, chief financial officer of the company, said, "I believe, for our industry, if you are posting EBITDA margins at more than 25 per cent, you are best-in-class. We have done 22 per cent, so we will be looking at improving it further." However, he did not share by when the company hopes to get there.

On concerns around how the company intends to ramp up its US operations given that it has sold some part of its branded business, Chakraborty said, "This year, we did more than 20 launches as compared to 15, which we planned initially. Next year, we will do much more than that." Although he appeared confident given the progress in the pipeline of products, he did not share individual product details. Erez Israeli, chief operating officer of the company, however, chose to describe it as "a healthier mix" of products.

Apparently, they seem to see the work cut out. To what extent it will reflect in gross margins and profits that meet Street expectations (not one-off gains) is yet to be seen. For the moment, however, a note issued by the company along with the results, quotes G V Prasad, co-chairman and CEO of the company, as saying, "It has been a good year with a significant turnaround in the financial performance and steady progress on the quality front. Looking ahead, we will focus on profitable growth, continue the emphasis on operational excellence and drive innovation."