Indian drug maker Dr Reddy's Laboratories Ltd reported a surprise 93 percent slide in quarterly net profit, dragged by high research and development spending and competitive pressures which led to lower sales. Reddy's, which like Indian rivals has made inroads in overseas markets with cheap copy-cat versions of top-selling drugs, said the next three to four quarters would be challenging.

Dr Reddy's said net profit under US accounting standards was just 40 million Indian rupees ($0.9 million) in the third quarter to December 1, down from 592 million a year earlier, and way below a median forecast of 596 million in a Reuters poll.

Sales fell 8 percent to 4.71 billion rupees, also well below forecasts.

Copyright Reuters, 2005