Latest news with #DrReddy'sLaboratoriesLtd
Mint
23-07-2025
- Business
- Mint
Dr. Reddy's US generics business drags Q1 earnings, eyes weight-loss drug launch in 87 countries
Dr Reddy's Laboratories Ltd's US generics business slumped in the June quarter as it faced price erosion in key products like gRevlimid used to treat cancer. US generics revenue declined 11% year-on-year and 4% sequentially to ₹ 3,412 crore in the first quarter of FY26, according to earnings announced on Wednesday. The business accounts for 40%, the highest among all segments, of its top line. The base business remains stable despite the price erosion, the company's management said in a post-earnings press conference. 'This time, as we knew, we are in the last year of lenalidomide or Revlimid [exclusivity], so this actually was very predictable,' said chief executive officer Erez Israeli. He added that the timing of procurement of key products, as well as the lack of new launches during the quarter, added to the drag in US earnings. The company posted an overall revenue from operations of ₹ 8,545 crore in Q1, up 11% over a year earlier. Its profit after tax rose 2% year-on-year to ₹ 1,418 crore. Both the metrics missed estimates. A Bloomberg poll had pegged its revenue to be ₹ 8,690 crore and profit after tax at ₹ 1,513 crore. The company posted an Ebitda of ₹ 2,278 crore, up 5% on-year, with its margins contracting to 26.7% in Q1 from 28.2% a year earlier. Ebitda is earnings before interest, tax, depreciation and amortization, a measure of operational profitability. The company's revenues in other key markets recorded healthy growth. Its Europe business grew 142% on-year to ₹ 1,274 crore, driven by its nicotine replacement therapy (NRT) portfolio acquired from Haleon last year. The India business grew 11% on-year to ₹ 1,471 crore on the back of new product launches and price increases. The company plans to launch weight-loss drug semaglutide in 87 countries next year, including those where patents are expiring and emerging markets where there are no patents, Israeli said. The drug goes off patent in several countries starting 2026. Semaglutide is a GLP-1 (Glucagon-like peptide-1), a class of medications indicated for the treatment of type-2 diabetes and obesity. 'We have some countries where there is no patent. And in others, we need to wait for the patent expiration…We are absolutely planning to launch day one in each one of these markets,' Israeli said. 'The biggest markets that will be ready for a launch will be Canada, India, Brazil, and Turkey.' The drugmaker is currently embroiled in a patent dispute with innovator Novo Nordisk in India. Semaglutide goes off patent in India in March 2026. Dr Reddy's has completed submissions of relevant regulatory filings in each of the countries where it plans to launch and is 'expecting approvals prior to the launch date', said Israeli. The company expects sales of semaglutide and other GLP-1s to be huge growth drivers. 'The sales of the product itself is big and can come to hundreds of millions of dollars…it depends on the price and market share we are getting [but] the beauty of this product is that we believe that once the price will go down, significantly more patients will use this product for both type-2 diabetes as well as weight loss,' he said. 'We believe this is a group (GLP-1s) with a lot of potential, and again, the sizes can be hundreds of millions of dollars; and therefore significant in the growth of the company in the next year,' he added. Through the next decade, the company plans to roll out 26 GLP-1 products including semaglutide, tirzepatide and others as they go off patent. Dr Reddy's shares closed 0.65% higher at ₹ 1,248.00 on Wednesday on NSE, compared with a 0.63% rise in Nifty 50, before the company announced its results.
Yahoo
12-05-2025
- Business
- Yahoo
Dr Reddy's Laboratories Ltd (RDY) Full Year 2025 Earnings Call Highlights: Record Revenue and ...
Release Date: May 09, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Dr Reddy's Laboratories Ltd (NYSE:RDY) achieved record high revenue exceeding $3.8 billion and crossed the $1 billion threshold in EBITDA for the first time. The company reported a year-over-year revenue growth of 17% for the full year, driven by strategic acquisitions and contributions from its generic portfolio. EBITDA margins remained resilient, exceeding 29% for the quarter and closing the full year at over 28%. The company successfully integrated its newly acquired nicotine replacement therapy business in the UK and is on track to complete integration in the Nordics. Dr Reddy's Laboratories Ltd (NYSE:RDY) maintained a net cash surplus balance of 2,454 crores post-acquisition payouts, enhancing financial flexibility for future growth initiatives. The consolidated gross profit margin for the fourth quarter declined by 300 basis points year-over-year, primarily due to reduced manufacturing overhead leverage. Selling and general administrative expenses increased by 22% year-over-year, driven by the acquired consumer healthcare business and higher logistics costs. The effective tax rate for the full year was higher than the previous year, mainly due to the reversal of previously recognized deferred tax assets. The company faced impairment losses of 77 crores in Q4 and 169 crores for the full year, related to certain product-related intangibles due to adverse market conditions. There was a sequential decline of 30% in the emerging markets generic business revenue for Q4, despite a year-over-year growth of 16%. Warning! GuruFocus has detected 5 Warning Signs with GSBD. Q: What is Dr. Reddy's strategy regarding potential tariffs on generics, and how will it affect the company's operations given it doesn't have manufacturing in the US? A: (Unidentified_4) We are preparing for various scenarios and closely monitoring developments. Our main focus is ensuring supply sustainability by working with customers on inventory needs. We are not planning specific actions to build a US manufacturing footprint unless the right opportunity arises. The impact of tariffs will depend on whether they apply to APIs or finished products, and we will adjust our strategy accordingly. Q: How flexible is Dr. Reddy's cost base, particularly in R&D and SG&A, to maintain margins as revenue grows? A: (Unidentified_3) We expect to maintain R&D and SG&A expenses at similar levels, with R&D at around 8% of sales. Our strategy is to grow sales faster than expenses, using productivity measures rather than cost cuts. We aim to achieve double-digit growth while maintaining margins. Q: Can you explain the significant changes in gross margin on a quarter-over-quarter basis? A: (Unidentified_3) The decline in gross margin was due to one-off costs, including severance and lower out-licensing income compared to the previous quarter. These factors contributed to a 300 basis point decrease in gross margin, which we expect to normalize in future quarters. Q: What is the outlook for the generic semaglutide market in Canada and other emerging markets? A: (Unidentified_4) Canada is a key market with exclusivity ending in January 2026. The market is growing, with a current size of approximately $1.8 billion. We anticipate significant volume growth as prices decrease, and we plan to be among the first to launch in Canada and other markets as IP landscapes allow. Q: How does Dr. Reddy's plan to address potential regulatory changes in the US, such as increased inspections? A: (Unidentified_4) Our facilities are prepared for unannounced inspections, which have been part of US guidelines for years. We are ready to comply with any regulatory changes and do not anticipate significant impacts on our operations. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
