Bengaluru, August 11 (Reuters) – Indian drugmaker Zydus Lifesciences reported a significant decline in its first-quarter profit, dropping by nearly a third, as soaring costs overshadowed robust sales in its key markets. The company announced on Tuesday that its consolidated net profit for the quarter ending June 30 fell to 9.40 billion rupees ($98.5 million), a notable decrease from 14.67 billion rupees recorded in the same period last year.
Despite an overall revenue jump of 22% to 80.17 billion rupees, expenses rose at an even faster rate of 41.4%. This surge in costs was primarily driven by an over 32% increase in research and development expenditures and a substantial 47.5% rise in other operating expenses.
Zydus Lifesciences, like most Indian generic drugmakers, relies heavily on the U.S. market for a significant portion of its revenue. However, intense competition in this sector has led to weak pricing, posing challenges for these companies.
Despite these headwinds, the company’s sales remained strong in several segments. Sales within India increased by 19.5% to 18.16 billion rupees. Its consumer wellness business, which includes popular brands such as Glucon D, saw a remarkable surge of 67.2% in sales, reaching 14.29 billion rupees.
Conversely, sales in North America experienced a decline of 2.6%, settling at 30.98 billion rupees. This trend of subdued U.S. sales was also observed among larger rivals such as Dr Reddy’s and Cipla during the quarter.
($1 = 95.4300 Indian rupees)
(Reporting by Kashish Tandon in Bengaluru; Editing by Rashmi Aich and Harikrishnan Nair)
