Chairman K Anji Reddy said the divestment was expected to be made during the course of this year. Compact Electric, a 100 per cent subsidiary of Dr Reddy's Laboratories, registered a net loss of Rs 96.83 lakh for the period ended, March 31, 1998 on a turnover of Rs 40.75 lakh. The lamps business, analysts indicated, was making a cash loss of around Rs 8 lakh per month.

Dr Reddy's Labs, the holding company, held 79,99,300 equity shares and 7,00,070 preference shares in Compact Electric as on March 31, 1997. Compact Electric Ltd's authorised capital comprises 120 lakh equity shares of Rs 10 each and 13 lakh, 15 per cent cumulative redeemable preference shares of Rs 100 each.

Compact Electric has a technical alliance with Korea's Li-Tech Corporation, though the overseas partner, as onMarch 31, 1997, failed to supply technical knowhow and process details in line with the joint-venture agreement.

Dr Reddy's exported its lamps to Germany, Italy, South Korea and UAE and plans to tap new markets. The company has also initiated plans to obtain the European Homologation (E mark Approval) and the ISO 9002 certification. Analysts termed the proposed move as "much-awaited" and "logical" given the company's plans on the pharmaceuticals front. Dr Reddy's group, analysts say, made an investment of approximately Rs 17 crore in the lamps business with no significant income accruing from it.

Meanwhile, the Rs 332-crore Dr Reddy's Labs plans to market in India molecules discovered and patented by the Swiss research and development (R7D) company, Debiopharm, including a new platinum analogue "oxaliplatin" and a GnRH analog, decapeptyl, for cancer. This will be based on a transfer-price arrangement. The marketing arrangement between the two partners is despite a reported parting of ways on theresearch front. The R&D alliance envisaged an expeditious development of novel anti-cancer compounds discovered by Dr Reddy's Research Foundation (DRF) for world-wide registration.