Dr Reddy’s Laboratories Ltd’s US generics enterprise slumped within the June quarter because it confronted value erosion in key merchandise like gRevlimid used to deal with most cancers.
US generics income declined 11% year-on-year and 4% sequentially to ₹3,412 crore within the first quarter of FY26, based on earnings introduced on Wednesday. The enterprise accounts for 40%, the best amongst all segments, of its high line.
The bottom enterprise stays secure regardless of the worth erosion, the corporate’s administration mentioned in a post-earnings press convention.
“This time, as we knew, we’re within the final yr of lenalidomide or Revlimid (exclusivity), so this truly was very predictable,” mentioned chief govt officer Erez Israeli. He added that the timing of procurement of key merchandise, in addition to the dearth of recent launches throughout the quarter, added to the drag in US earnings.
The corporate posted an total income from operations of ₹8,545 crore in Q1, up 11% over a yr earlier. Its revenue after tax rose 2% year-on-year to ₹1,418 crore.
Each the metrics missed estimates. A Bloomberg ballot had pegged its income to be ₹8,690 crore and revenue after tax at ₹1,513 crore.
The corporate posted an Ebitda of ₹ 2,278 crore, up 5% on-year, with its margins contracting to 26.7% in Q1 from 28.2% a yr earlier. Ebitda is earnings earlier than curiosity, tax, depreciation and amortization, a measure of operational profitability.
The corporate’s revenues in different key markets recorded wholesome progress. Its Europe enterprise grew 142% on-year to ₹ 1,274 crore, pushed by its nicotine alternative remedy (NRT) portfolio acquired from Haleon final yr. The India enterprise grew 11% on-year to ₹ 1,471 crore on the again of recent product launches and value will increase.
Semaglutide in focus
The corporate plans to launch weight-loss drug semaglutide in 87 international locations subsequent yr, together with these the place patents are expiring and rising markets the place there are not any patents, Israeli mentioned. The drug goes off patent in a number of international locations beginning 2026.
Semaglutide is a GLP-1 (Glucagon-like peptide-1), a category of medicines indicated for the remedy of type-2 diabetes and weight problems.
“Now we have some international locations the place there isn’t a patent. And in others, we have to anticipate the patent expiration…We’re completely planning to launch day one in every one in every of these markets,” Israeli mentioned. “The most important markets that might be prepared for a launch might be Canada, India, Brazil, and Turkey.”
The drugmaker is at the moment embroiled in a patent dispute with innovator Novo Nordisk in India. Semaglutide goes off patent in India in March 2026.
Dr Reddy’s has accomplished submissions of related regulatory filings in every of the international locations the place it plans to launch and is “anticipating approvals previous to the launch date”, mentioned Israeli.
The corporate expects gross sales of semaglutide and different GLP-1s to be large progress drivers. “The gross sales of the product itself is huge and might come to lots of of hundreds of thousands of {dollars}…it is determined by the worth and market share we’re getting (however) the great thing about this product is that we imagine that when the worth will go down, considerably extra sufferers will use this product for each type-2 diabetes in addition to weight reduction,” he mentioned.
“We imagine this can be a group (GLP-1s) with quite a lot of potential, and once more, the sizes will be lots of of hundreds of thousands of {dollars}; and due to this fact vital within the progress of the corporate within the subsequent yr,” he added.
By means of the following decade, the corporate plans to roll out 26 GLP-1 merchandise together with semaglutide, tirzepatide and others as they go off patent.
Dr Reddy’s shares closed 0.65% larger at ₹1,248.00 on Wednesday on NSE, in contrast with a 0.63% rise in Nifty 50, earlier than the corporate introduced its outcomes.