DR REDDY'S LABORATORIES LIMITED
- INSPIRING SUCCESS STORY


By
Sindhu Reddy. A
Batch 2003-05
Dhruva College of Management
Kachiguda, Hydearabad-500 027
 


Men often become what they believe themselves to be .if believe I cannot do something; it makes me incapable of doing it. But when I believe I can then I acquire the ability to do it even if I didn't have it in the beginning!   MAHATMA GANDHI And this is where the success story of Dr.Reddy BEGINS……….

For any business management student one of the most inspiring companies in operation is Dr Reddy's Laboratories Limited (DRL). The reason being it is started by a technocrat entrepreneur with no business background. Further the promoter is from Andhra Pradesh and is operating from our own Hyderabad. A humble attempt is made to present in the following lines, an overview of the company and its achievements.

INTORDUCTION

DRL is one of the finest pharmaceutical companies in INDIA. This company is started by an Indian technocrat that too from Andhra Pradesh. Dr.K.Anji Reddy is very popularly known as Dr.Reddy.He does not belong to a business family nor inherits any business empire. He hails from a middle class agricultural background from Guntur in Andhra Pradesh. He was for number of years working Eor $ public sector enterprise namely Indian Drugs and Pharmaceuticals Ltd. The entrepreneurial qualities in Dr. Reddy made him to venture into his own field i.e. pharma line. He started DRL with support from local financial institutions. He started DRL with a nominal investment of Rs.25 lakhs. Within less than 20 years DRL has become a gigantic enterprise competing with the so-called multinational pharmaceutical companies such as Glaxo, Pfizer, Smith klime Becham etc. The success of Dr.Reddy is a true example for every aspiring individual that what a determination will take forward in business or for that matter any sector.

SUCCESS MILE STONES

Could any body imagine a company started with an initial capital of 25 lakhs could achieve a turnover of over Rs.1651 crores over a period of 20 years? This it self shows in real terms the success story behind Dr.Reddy .The scientific and research mind of Dr.Reddy supported by professional managerial support has seen the heights of success.

DRL has number of achievements to its credit. It is an emerging global pharmacy company with proven research capabilities. They have now two decades of service in creating safe pharmaceutical solutions with the ultimate purpose of making the world a healthy place.

Their range of competencies cover an entire pharma chain such as basic research, bulk drugs, finished dosages, bio-technology and diagnostics. DRL has a dedicated research center, which has developed number of medicines in therapeutic areas. The strength of Dr Reddy lies in identifying relevant bulk drugs and formulations and selling them at affordable prices across the world. Some of their popular drugs are Norfloxacin, Ciprofloxacin; Enrofloxacin etc have a large customer base. They have customers world wide including Europe, Japan and US.  Some of their achievements are referred below which show the continuous progress achieved by the company year after year.

Table – 1: Brief history of Dr. Reddy Labs
 

1984

DRL established with an investment of Rs.25 lakhs

1986

Marketing extended to international market with exports

1987

Obtained USFDA approval for Ibuprofen

1990

First time in India to export Norfloxacin and Ciprofloxacin to Europe and Far East

1991

Commenced export of formulations to Russia

1993

Established Dr Reddy's Research Foundation for R&D

1994

Made GDR issue to an extent USD 48 million for establishment of Generic formulation facility

1995

Set up Joint Venture in Russia for manufacturing bulk drugs

1997

Licensed anti diabetic molecule to Novo Nor disk a world leader in pharmaceuticals

1999

Acquired American Remedies

2000

Became third largest pharmaceutical company in India

2001

Became the first Asia Pacific pharmaceutical company our side Japan to get listed in New York stock exchange

2002

First overseas acquisition of BMS Laboratories Ltd and Meridian Health Care in UK


As could be seen from the above we find some achievement or other almost every year. Thus the growth is steady in all fronts. Let us now look at the financials.

FINANCIALS

Based on the financial statements the following is the picture on income and profit.

Table – 2: Financial Performance of Dr. Reddy Labs
(Rs. In Lakhs)
 

DETAILS

2002

2001

Total Income

1651.63

1001.60

Net Profit

459.65

144.46

Paid up capital (Rs. 5 each)

38.26

 

Reserves *

1419.73

 
* Due to inclusion share premium in respect of new shares issued


Figures pertaining to the year 2003 are not made officially available. If we look at the facts that where is Rs.25 lakhs and where is the present net worth of the company at Rs.1458 crores. The growth is something phenomenal.

DARLING OF INVESTORS

DRL is the darling of shareholders in terms of returns they have received over the years. One side annual regular dividend and the other side share appreciation. The present value of every share is over Rs.1100. considering the paid up value of each share is only Rs.5 one can imagine the share appreciation. This apart DRL has issued bonus shares number of times over the years. Hence the benefits to the investors are dividend paid annually, bonus shares, rights shares and appreciation of share value.

CORPORATE GOVERNANCE

The management of DRL is carried out by a Board of Directors. There are three whole time Directors and eight independent and non-whole time Directors. The whole Time Directors are Dr Reddy, Mr. G.V.Prasad and Mr. Satish Reddy. All the Directors are professionals and experts in the field of Medicine, Chemistry, Medical Research, Human Resources Management, Business Strategy, Finance and Economics.

To uphold the best practices of Corporate Governance, DRL is understood to have committed to providing sound and efficient Corporate Governance System to achieve sustainable growth through fairness, transparency and accountability to its stakeholders.

In recognition of its commitment towards Corporate Governance, DRL is the recipient of ICSI of National Award for excellence in Corporate Governance.

SOCIAL RESPONSIBILITY

DRL has always been committed to social responsibility. It believes in the capacity of human beings given the right motivation and environment. Towards this objective DRL has started an organization called Foundation for Human and Social Development. This organization is started in the year 1996.The foundation operates for addressing issues related to urban poverty and sustainable livelihood. Some of the programmes of the foundation include;

    * Small grants program
    * Change maker club
    * Micro finance entrepreneurs
    * Fellowship support program

CONCLUSION

Brave men who work while others sleep, And stand while others fly,They build nations, pillars deep and lift them to the sky;

Established in 1984,the institution symbolizes the aspirations, dreams and the vision of one single man DR.Reddy to serve his very best to mankind.

It is amazing how dedicated one can be in a chosen field is all we have to learn from Dr.Reddy.DRL is a company that has given satisfaction to the promoter through its tremendous success, to the investors in terms of returns it has paid and to the public at large by way of providing medical solutions at affordable prices.

We being the future managers develop aptitude and attitude towards our duties. Friends remember that when we believe in our goals, that what we dream of can become reality, results will begin to follow. We have talent but problem is our approach towards our goals.

Thinking is the capital Enterprise is the way Hard work is the solution Lets work and sweat for a great vision as Dr.Reddy has done Wish u all a very inspiring success.
 


Sindhu Reddy. A
Batch 2003-05
Dhruva College of Management
Kachiguda, Hydearabad-500 027
 

Source : E-mail July 22, 2004

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