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Informist, Monday, May 11, 2026

By Gunjan Rajput

NEW DELHI – Dr. Reddy's Laboratories Ltd. is expected to report a sharp decline in net profit for the March quarter, as lower US sales amid rising competition in generic cancer drug Revlimid and price erosion are likely to weigh on earnings.

The pharma company's consolidated net profit is expected to be INR 8.95 billion for the reporting quarter, down almost 44% year-on-year and more than 32% quarter-on-quarter, according to the average of estimates from 12 brokerages. The highest estimate for the company's net profit is INR 11.54 billion from Motilal Oswal Financial Services Ltd., while the lowest estimate is INR 5.13 billion from Equirus Securities Pvt. Ltd.

Dr. Reddy's Laboratories' March-quarter revenue is projected at INR 82.69 billion, down 3% year-on-year and nearly 6% lower sequentially, according to the average of estimates. The highest estimate for the company's revenue is INR 87.97 billion from Batlivala & Karani Securities India Pvt. Ltd. and the lowest is INR 76.49 billion from Kotak Securities Ltd.

Dr. Reddy's Laboratories is likely to report a weak performance in the March quarter, with US revenue expected to decline sharply due to increased competition in generic Revlimid after the end of its limited exclusivity in January 2026. The drug's patents are held by Bristol Myers Squibb, and earlier generic launches, including that of Dr. Reddy's, were allowed under volume-limited agreements.

The increase in competition for generic Revlimid, along with price erosion and channel inventory adjustments, is expected to weigh on the company's US sales, leading to a steep sequential and year-on-year decline, according to brokerages. Kotak Securities expects nil contribution from the generic version of Revlimid during the quarter.  Estimates across brokerages suggest US sales could fall 35–37% year-on-year, while domestic revenue is expected to grow in double digits, supported by strong traction in pain, respiratory, and gastro therapies.

The company's earnings before interest, tax, depreciation, and amortisation are estimated at INR 15.07 billion for the March quarter, according to estimates from 11 brokerages. The highest estimate for the company's EBITDA is INR 17.64 billion from Prabhudas Lilladher Pvt. Ltd., while the lowest estimate is INR 12.00 billion from Equirus Securities.

In March, the company launched its semaglutide injection under the brand name Obeda in India, which may support domestic growth, though its impact in the March quarter is yet to be seen. Other key factors to watch include progress on semaglutide approvals in Canada and developments related to the company's biosimilar pipeline, according to Motilal Oswal. 

For the financial year 2025-26 (Apr-Mar), the company is expected to report a consolidated net profit of INR 52.01 billion to INR 54.36 billion. The highest estimate is from Motilal Oswal Financial Services, while the lowest estimate is from Prabhudas Lilladher. The company's revenue for FY26 is expected to be in the range of INR 344.10 billion to INR 344.77 billion. The highest estimate is from Prabhudas Lilladher, while the lowest estimate is from Motilal Oswal Financial Services.

Dr. Reddy's Laboratories is scheduled to report its March-quarter results Tuesday. At 1226 IST, the company's shares were 0.2% higer INR 1,297 on the National Stock Exchange. The shares have risen about 6% since the company reported its December-quarter results.

Of the 13 brokerage reports on the company available with Informist, eight have a 'buy' recommendation on the stock, with an average target price of INR 1,482, up over 15% from the current market price. Two brokerages have a 'hold' rating on the stock, with an average target price of INR 1,235. Three brokerages have a 'sell' rating on the stock, with an average target price of INR 1,247.

The following are the March quarter earnings estimates for Dr. Reddy's Laboratories from 11 brokerages in descending order of the estimate of net profit in INR billion:

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Saji George Titus

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