Kazakhstan fines Dr Reddy’s subsidiary ₹28.7 lakh for discontinuing some expense claims – CNBC TV18

Drug firm Dr Reddy’s Laboratories Ltd on Thursday (December 5) announced that its step-down wholly owned subsidiary, Dr Reddy’s Laboratories Kazakhstan LLP, has received a penalty order from the Department of State Revenue, Bostandyk district, Almaty, Kazakhstan.

“This is to inform that our step-down wholly owned subsidiary “Dr Reddy’s Laboratories Kazakhstan LLP”, has received an order dated December 4, 2024, from the Department of State Revenue, Bostandyk district of Almaty, Kazakhstan,” Dr Reddy’s Laboratories said in a regulatory filing.

The order, dated December 4, 2024, imposes a penalty of KZT 17,597,212 (approximately ₹28.7 lakh) for the disallowance of certain expense claims for the calendar year 2021.

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The company stated that the penalty pertains to the tax authorities’ disallowance of specific expense claims. Despite this, Dr Reddy’s has evaluated the financial implications and determined that the order will not have a material impact on its financials, operations, or other activities.

Dr Reddy’s Laboratories reported a 15% decline in its consolidated net profit, totalling ₹1,255 crore for the second quarter of FY25, compared to ₹1,480 crore in the same period last year. However, revenue from operations surged 17% year-on-year, reaching ₹8,016 crore. EBITDA rose by 5% to ₹2,280 crore, with margins improving slightly to 28.4%.

The increase in revenue was primarily driven by global generics, with second-quarter earnings from this segment at ₹7,160 crore, reflecting a 17% year-on-year growth, supported by improved sales volumes and new product launches. North America saw a 17% rise in revenues to ₹3,730 crore, despite some price erosion.

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In Europe, revenues grew by 9% to ₹1,580 crore, aided by new product launches. The Indian market reported an 18% increase in revenues, totalling ₹1,400 crore, bolstered by its vaccine portfolio and recent price adjustments. Emerging markets experienced a robust 20% growth, reaching ₹1,460 crore, thanks to market share expansion and product launches.

Shares of Dr Reddy’s Laboratories Ltd ended at ₹1,240.20, up by ₹24.60, or 2.02% on the BSE.