Dr Reddy's Lab faces Betapharm writedowns

Hyderabad-based Dr Reddy's Laboratories (DRL) may have to write down the intangible value of major products in its German subsidiary Betapharm during the current quarter, which may squeeze the Indian firm's earnings for FY09.

DRL has already made two major provisions towards Betapharm impairments of over Rs 400 crore. However, the spokesman did not confirm the exact quantum of the provisions made so far.

The unimpaired goodwill in respect of the major products marketed by Betapharm is currently estimated at about 150 million euros. Thus the provision for impairments and pricing pressure in the German market are likely to impact the earnings of the company in the current financial year.