Dr Reddy's Chairman K Satish Reddy, the 4th richest person in Hyderabad

Kallam Satish Reddy, the Chairman of homegrown pharma giant Dr Reddy's Laboratories (DRL), is the fourth richest person in Hyderabad with a net worth of Rs 12,800 crore. According to Hurun Global Rich List 2021, he is ranked at 108 in the India's rich list and at 2,050 worldwide

Kallam Satish Reddy, the Chairman of homegrown pharma giant Dr Reddy's Laboratories (DRL), is the fourth richest person in Hyderabad with a net worth of Rs12,800 crore. According to Hurun Global Rich List 2021, he is ranked at 108 in the India's rich list and at 2,050 worldwide.

DRL was founded by his late father Kallam Anji Reddy in 1984, who previously worked at Indian Drugs and Pharmaceuticals Limited (IDPL), a public-sector drugmaker that shut operations subsequently. DRL started its operations in 1984 in the active pharmaceutical ingredients (API) segment, with a single drug in 60 tonne facility near Hyderabad. In the same year, it shipped its first consignment of Methyldopa drug to West Germany.

Today, Dr Reddy's provides a complete range of pharmaceutical services. The company manufactures bulk drugs and formulations including verapamil and cephalexin. It also manufactures and exports molecules such as norfloxacin, ciprofloxacin, and varieties of semi-synthetic penicillin. DRL markets its products in India and around the world. The drug maker however gets major chunk of its revenues from the US market.

The first pharmaceutical company in Asia, outside Japan, to be listed on the NYSE, it is largest player in the custom pharmaceutical services (CPS) business in India. The pharma major has launched brands like Ciprolet, Nise, Enam, Stamlo, Omez, and Ketorol, among others.

The journey of Satish Reddy

K Satish Reddy joined the company in 1993 as Executive Director and since then has held various positions including that of Managing Director in 1997. He was elevated as Vice-Chairman and Managing Director in 2013. Reddy led the company's transition from a uni-focused manufacturer of APIs to a company that moved up the value chain with a diverse product portfolio of finished dosage formulations. He oversaw the expansion and the establishment of a strong footprint for Dr Reddy's finished dosage products in Russia, CIS countries and other emerging markets. Keeping true to the legacy of the founder of the company, Dr K Anji Reddy, the 54-year-old billionaire drives the company's corporate social responsibility (CSR) initiatives. Reddy holds a degree in Chemical Engineering from Osmania University, Hyderabad, and a Masters in medicinal chemistry from Purdue University, USA.

Memberships

Reddy is a board member of companies such as Aurigene Discovery Technologies Ltd and Cheminor Drugs Ltd. He also holds the position of presidentship of Indian Pharmaceutical Alliance(IPA) which represents 24 leading research-based Indian pharmaceutical companies.

He currently chairs the Life Sciences Sector Skill Development Council (LSSSDC) under the National Skill Development Corporation (NSDC), an organization, working to address the skill shortfalls in the life sciences sector across India. He is also the Chairman of the board of governors of NIPER Hyderabad and is Deputy Chair of the Confederation of Indian Industry's Southern Region arm. He was a member of the Drugs Technical Advisory Board of India, the Chairman of the Andhra Pradesh Chapter of the Confederation of Indian Industry and head of its National Committee on Pharmaceuticals.

Awards

Reddy was identified as a 'Young Global Leader for 2007' by the World Economic Forum, and was presented with the India Business Leaders Awards (IBLA) award by CNBC in 2005 for his contributions to corporate social responsibility.

Way ahead

After a relatively soft first quarter, in Q2FY22, Dr Reddy's revenues grew 18 per cent YoY at Rs 5,763 crore from Rs 4,897 crore in the previous year quarter. Earnings before interest, tax, depreciation and amortization (EBITDA) rose 23 per cent YoY at Rs 156 crore, while margins improved 110 basis points (bps) to 27 per cent from 25.9 per cent in Q2FY21.

However, the company's gross profit margins decreased by 50 bps at 53.4 per cent over previous year, majorly on account of price erosion and lower export benefits, partially offset by leverage benefit on manufacturing overheads.

The company continues to consider the impact of Covid-19 pandemic in assessing the recoverability of receivables goodwill intangible assets and certain investments. During December 2020, the company entered into a definitive agreement with Glenmark Phannaceuticals Ltd to acquire certain brands in various emerging market countries. Today, DRL has a global presence in more than 100 countries, with subsidiaries in the US, UK, Russia, Germany and Brazil; joint ventures in China, South Africa and Australia; representative offices in 16 countries and third–party distribution set ups in 21 countries.

The company's global generics business crossed the $1 billion mark in 2015. In 2020, the company acquired the rights to conduct clinical trials of Sputnik V, the Russian Covid-19 vaccine and to distribute it in India.

Kallam Satish Reddy played key role in the growth of the pharma major after the demise of his father on March 15, 2013. Thanks to his vision and foresightedness, Dr Reddy's is set to cross several milestones in coming years. So is his wealth and also his CSR activities.