The company launched 24 new products across multiple markets. It expects steady performance in the second half owing to these launches. It has an overall pipeline of about 100 products and 20 of those are complex generics. This is expected to offset the impact of slowing Revlimid business over the coming quarters.
In a few weeks, the company anticipates hearing back from the Canadian health authorities regarding its Semaglutide application. It will be highly competitive given several other companies vying for the Canadian market. Dr Reddy’s is still optimistic about selling 12 million Semaglutide pens across Canada, Brazil, India, and other emerging markets.
The company expects to file for Abatacept, which is used to treat autoimmune diseases, by December 2025. While it will be filed from the company’s Indian facility at Bachupally in Telangana, it is looking for a tech transfer to a US based contract manufacturing partner to address US tariffs-related issues.
Agenciesfalling revlimid sales to weigh
Dr Reddy’s consolidated revenue rose 9.8% year-on-year to ₹8,805.1 crore, while net profit grew 14% to ₹1,437.2 crore in the September quarter. However, lower sales of Revlimid, a medicine used to treat blood cancer pulled down operating margin before depreciation and amortisation (Ebitda margin) to 26.7% from 28.4% in the year-ago quarter. It is expected to further decline and remain around 25% for the next two years.
India sales increased 13% year-on-year to ₹1,578 crore, supported by new brand launches and the acquisition of Stugeron and related brands from Janssen Pharmaceuticals for about $50 million in September. The North America segment contributed ₹3,241 crore, down 13% year-on-year due to product-specific price erosion and reduced Lenalidomide sales. The company launched seven new products during the quarter, including generics of Entresto and Fluorouracil Cream. The Europe business more than doubled, with revenue up 138% year-on-year to ₹1,376 crore, led by the acquired nicotine replacement therapy (NRT) portfolio. Excluding NRT, underlying growth was 17% year-on-year. Emerging Markets revenue rose 14% to ₹1,655 crore, aided by new product launches and favourable currency, especially in Russia.
According to analysts, the current stock valuation factors in the earnings upside. Motilal Oswal Financial Services maintains a ‘neutral’ rating whereas Emkay Global Financial Services has a ‘reduce’ call. The stock, which has remained range-bound over the past six months, was last traded at ₹1,284 on Friday on the BSE.