Dr Reddy’s Q2 profit falls 36%, plans semaglutide relaunch in November

Mumbai: Dr Reddy’s Laboratories posted its results for the September quarter on Friday, with profit down 36% year-on-year to ₹925 crore and consolidated revenue down 1.5% on-year to ₹8,671 crore. Growth was primarily impacted by lower sales of blood cancer drug lenalidomide (Revlimid) in North America, the company said.

The underlying base business (excluding lenalidomide in North America), continued to deliver double-digit growth across businesses excluding Europe and the API business, the company said.

The company’s Ebitda was ₹1,783 crore for the quarter, with a margin of 20.6%.

Dr Reddy’s had a net cash surplus of ₹2,502 crore during the quarter.

Its largest geography, North America, reported ₹2,489 crore in revenue, down 23% year-on-year due to the loss of lenalidomide. However, its base business grew in double-digits, aided by new product launches, volume expansion and favourable foreign exchange currency fluctuations, the company said. North America accounted for 29% of overall revenue.

Emerging markets, which accounted for 24% of total revenue, reported 24% y-o-y growth in revenue to ₹2,059 crore, driven by new product launches across geographies, and favourable forex movements.

Its India business continued to grow in double digits, outperforming the broader Indian pharmaceutical market. It reported revenue of ₹1,851 crore, up 17% y-o-y. New launches, acquired portfolios, price increases and volume growth aided growth for the market, which contributed to 21% of overall revenues.

The company’s net profit improved considerably on a sequential basis, growing 109% quarter-on-quarter, as the impact of its semaglutide API issue faded. In Q1FY27, the firm had taken a ₹240 crore hit on inventory and other costs related to the issue.

Semaglutide relaunch

During the last quarter, certain active pharmaceutical ingredient (API) batches of semaglutide were found to be out of specification and the company temporarily paused commercial supply. It is on track to relaunch in November, management said.

“We are on track to resolve issues associated with the semaglutide API. Now we are doing the formulation batches and based on the current progress we will relaunch this molecule most likely in November,” chief financial officer M. V. Narasimham said on Friday evening.

Dr Reddy’s has secured approval for generic semaglutide in eight emerging markets across Latin America, Africa, and the Middle East so far, it said. This is in addition to Canada and India, where it had already launched the product.

During the quarter, the company partnered with Takeda for dengue vaccine QDenga, which it plans to launch in the next fiscal year. It also expanded its collaboration with Gilead Sciences for the investigational once-yearly lenacapavir for HIV prevention in 120 countries, and secured US FDA approval for rituximab biosimilar — a targeted immunotherapy to treat certain blood cancers and autoimmune disorders. In the domestic market, it launched the nivolumab biosimilar, used to treat various cancers.

The firm announced its results after market close. Its share price on the National Stock Exchange closed 0.77% down at ₹1,229.50 apiece.

About the Author

Jessica has been tracking the pharmaceutical, life sciences and healthcare sector for Mint since November 2024. Based in the country's financial capital, she reports on everything to do with health and medicines. This includes corporate action, patent wars, deals, startup activity and consumer trends. She also keeps a keen eye on the ever-evolving world wellness and preventive health, which moves faster than regulation can keep up. She has a deep interest in what the future of health looks like and how science, innovation, policy and company decisions inform and impact the health of citizens. She has been a reporter for five years, working with publications like The Core and News18 prior to this, covering various sectors like automobiles, real estate, energy, sustainability and urban mobility. Jessica has a bachelor’s degree in English from St Xavier’s College, Mumbai and a postgraduate diploma in media from Sophia’s College, Mumbai. Her work is driven by a desire to decode how macro decisions and events alter and shape the lives of ordinary people. Drop her a mail or a message to discuss business scoops, exciting new medicines and inventions, or your latest wellness routine.