Dr Reddy's Laboratories Stock Earnings Reports

Q1 FY'26 highlights: Consolidated revenue grew 11% YoY to INR 8,545 Cr (USD 997m) with EBITDA of INR 2,278 Cr (26.7% margin). Gross margin contracted YoY (350 bps) largely due to price erosion in certain U.S. generics (notably lenalidomide); North America revenue fell 17% YoY. SG&A increased (30% of sales) driven by strategic investments in the newly acquired NRT consumer-health business and a Nestle JV; R&D was 7.3% of sales and management expects FY R&D of ~7–7.5% of sales. Net cash surplus was INR 2,922 Cr (USD 341m); quarterly CapEx INR 683 Cr and full-year CapEx guidance ~INR 2,500–2,700 Cr, focused on peptides and biosimilars. Key pipeline and strategic updates: semaglutide (Sema) filing/approval timing targeted end-Oct/early-Nov with launch aimed at Jan 2026 (Canada prioritized), initial commercial capacity via partners of ~10–12 million pens for the near term; biosimilar abatacept Phase III readout expected Nov 2025 with BLA submission thereafter and potential IV launch ~Jan 2027; strategic collaboration with Alvotech for a pembrolizumab (Keytruda) biosimilar. Regulatory matters: several sites received Form 483s (Middleburg API VAI; CTO-5 and FTO-11 with observations) and company intends to respond per timelines. Management reiterated focus on: (1) stabilizing U.S. base business (guidance: flat to single-digit growth absent major new launches), (2) scaling consumer health and biosimilars, (3) operational efficiency and discretionary cost flexibility (management cited material cost savings potential if needed), and (4) selective BD given strong balance-sheet and borrowing capacity.