More Stories

Informist, Wednesday, Jul. 22, 2026

 

Please click here to read all liners published on this story

--Dr Reddy's: Cash surplus as on Jun 30 at INR 30.6 bln 
--CONTEXT: Dr Reddy's management comments in post-earnings press conference 
--Dr Reddy's: 79 new products pending with US FDA for approval 
--Dr Reddy's: Discounts hit nicotine replacement therapy pdt sales in Europe 
--Dr Reddy's: Focus on restoring semaglutide supplies as soon as possible 
--Dr Reddy's: To use cash reserves on inorganic growth opportunities 
--Dr Reddy's: On track to restore semaglutide supply by Oct-Nov 
--Dr Reddy's: Co's semaglutide has good demand; out of stock some areas 
--Dr Reddy's: See no impact from semaglutide supply issue on Q2 earnings 
--Dr Reddy's: Expecting strong earnings growth in Q3, Q4 
--Dr Reddy's: FY27 capex seen around INR 18 bln 
 

 

By Gunjan Rajput and Narayana Krishna

 

NEW DELHI/HYDERABAD – Dr. Reddy's Laboratories Ltd. expects a strong earnings growth in the second half of the current financial year as it works to restore supplies of semaglutide after a temporary disruption due to impurity issue in an active pharmaceutical ingredient.

 

"Q3 and Q4 should be very strong, assuming that we are coming back with semaglutide. And obviously, there are many products that will come after that we discussed. We have Abatacept....We have in each one of the markets between 15 to 20 products that we are launching....So, we continue to say that all of our markets will continue to grow double digits, and we will have the right profitability," the company's management said in a post-earnings press conference on Wednesday. 

 

The drugmaker said it remained on track to resume semaglutide supplies by Oct-Nov and does not expect the recent supply issue to affect its earnings for the Jul-Sept. It added that demand for semaglutide remains strong, with the product being out of stock in some markets due to supply constraints. On Jul. 9, the company informed exchanges that commercial supplies of semaglutide would be delayed as certain batches failed to meet quality specifications due to an API-related issue. 

 

The pharmaceutical major reported a near 69% year-on-year fall in consolidated net profit to INR 4.44 billion, marking the third consecutive quarterly decline in its bottom line. The company's revenue fell 5.5% year-on-year to INR 81.00 billion, also missing the consensus estimate of INR 82.43 billion. 

 

Dr. Reddy's Laboratories reiterated that the INR-2.40-billion charge related to the impurity in semaglutide API issue was a one-time provision and does not expect similar costs in the coming quarters. The management said it has identified the root cause of the impurity and is validating the revised manufacturing process.

The company said it had a cash surplus of INR 30.6 billion as of Jun. 30 to pursue inorganic growth opportunities, while continuing to invest in organic expansion. Management said acquisitions and in-licensing remained key pillars of its long-term growth strategy, alongside investments in biologics, peptides, consumer health, and innovative assets. "We will continue to drive the efficiencies in order to get the leverage on the operations, and since we are having a cash surplus, we will continue to how we can augment the organic growth through M&A and licensing routes," the management added. 

 

Dr. Reddy's expects capital expenditure of around INR 18 billion for the current financial year, largely towards product-specific investments, biologics, and routine maintenance projects. 

In the US, the company has 79 products awaiting approval from the US Food and Drug Administration following six filings during the June quarter. It said price erosion in the US generics market continues to remain moderate, while several upcoming launches are expected to support growth. In Europe, sales of the nicotine replacement therapy portfolio were affected by higher rebates and discounts following the transition to Dr. Reddy's operating model after the Haleon integration. Management, however, said the business continues to maintain healthy underlying growth momentum despite the accounting-related impact on reported revenue. 

 

On biosimilars, Dr. Reddy's management said it plans to launch another biosimilar in India this fiscal. The company expects abatacept to be the next major product from its pipeline. Abatacept is a biosimilar drug used to treat rheumatoid arthritis. Management said it was targeting the first global launch of the rheumatoid arthritis biosimilar, with a US launch expected by the end of FY27, subject to regulatory approval. The company is awaiting the establishment inspection report from the US Food and Drug Administration after its recent inspection of the biologics facility in Bachupally. It also plans to subsequently launch the product in Europe and other global markets. 

 

On the proposed US tariffs on pharmaceutical imports, the company said it does not intend to alter its manufacturing or investment strategy until there is greater clarity from US authorities. "We literally see how the situation will evolve because we've been there in those cycles in the past. It is not practical to move operations like that to the United States. And obviously, if tariff will be imposed, we'll have to raise the price in the United States," the management said. 

On Wednesday, the company shares closed at INR 1,183 on the National Stock Exchange, down nearly 2%.  End

 

Edited by Akul Nishant Akhoury

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.