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Business Standard
7 days ago
- Business
- Business Standard
Q1 miss for Dr Reddy's, but analysts remain hopeful for future prospects
Despite missing Q1 expectations, Dr Reddy's continues to see growth in key markets like Europe and India, while managing costs to offset challenges in the US Devangshu Datta Mumbai Listen to This Article In the April-June quarter (Q1) of FY26, Dr Reddy's (DRL) US sales fell 4 per cent quarter-on-quarter (QoQ) to $400 million due to erosion in gRevlimid earnings caused by pricing pressure. On a positive note, DRL posted double-digit growth in most ex-US markets, but overall revenue disappointed. The absence of meaningful abbreviated new drug application (ANDA) approvals for DRL, as well as impending tariffs (since it has no US-based formulations facility), remain concerns. DRL's Q1 FY26 revenue grew 11 per cent year-on-year (YoY) to Rs 8,570 crore, and Europe sales jumped 1.4x YoY to Rs 1,270 crore (15 per cent
Time of India
23-07-2025
- Business
- Time of India
Dr Reddy's PAT rises 2% despite record quarterly revenues in Q1FY26
1 2 Hyderabad: Despite clocking its highest-ever quarterly revenues during the first quarter ended June 30, pharma major Dr Reddy's Laboratories (DRL) on Wednesday said it posted only a marginal 2% rise in profit after tax for Q1 of FY26 at Rs 1,418 crore, as against Rs 1,392 crore in the same period of FY25. The company posted an 11% rise in revenues at Rs 8,545 crore during Q1FY26, compared to Rs 7,673 crore during Q1FY25. Dr Reddy's said revenues from global generics grew 10% during Q1FY26 at Rs 7,562 crore, compared to Rs 6,886 crore in Q1FY25, despite an 11% drop in generics revenues from North America to Rs 3,412 crore from Rs 3,846 crore, due to higher price erosion led by Lenalidomide, the generic version of the blockbuster multiple myeloma drug Revlimid. Revenues from the European generics market showed the steepest growth at 142% during the quarter at Rs 1,274 crore from nearly Rs 527 crore, even as revenues from the Indian market showed an 11% rise to Rs 1,471 crore from Rs 1,325 crore, and those of emerging markets increased 18% from Rs 1,188 crore. US markets accounted for 40% of the revenues during the quarter, while India contributed 17%, emerging markets 16%, and Europe 15%. You Can Also Check: Hyderabad AQI | Weather in Hyderabad | Bank Holidays in Hyderabad | Public Holidays in Hyderabad
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Business Standard
23-07-2025
- Business
- Business Standard
Dr Reddy's Q1 result: Net profit up 2%, revenue hits record ₹8,545 crore
Hyderabad-based pharma major Dr Reddy's Laboratories (DRL) posted a consolidated net profit of ₹1,417 crore in the first quarter of financial year 2026 (Q1 FY26), a 2 per cent rise from ₹1,392 crore a year ago. The company clocked its highest-ever quarterly revenue at ₹8,545 crore, up 11 per cent year-on-year (Y-o-Y) from ₹7,672 crore. The increase in profit and revenue was attributed to new product launches and price hikes during the quarter. Sequentially, revenue was flat, with a marginal 0.4 per cent rise, while net profit declined by 11 per cent. G V Prasad, co-chairman and managing director, DRL, said: 'We delivered double-digit growth this quarter over the same period last year, reflecting our strength in branded markets and positive momentum in the Nicotine Replacement Therapy portfolio.' Dr Reddy's is planning a major global rollout of semaglutide beginning in 2026, targeting 87 countries—including India, Brazil, Canada, and Turkey—subject to local patent expiries. In countries without active patents, launches will begin earlier. In India and Brazil, where the patent expires in March 2026, the company is targeting Day 1 launches. Erez Israeli, chief executive officer, DRL, said: 'The semaglutide launch is very important to us. It reflects our focus on business development, resource optimisation, and cost alignment for future growth. While there are execution risks, I'm confident we'll overcome them and continue our growth trajectory. Our pipeline includes 26 peptide-based GLP-1 products, expected to launch over the next decade.' Despite ongoing litigation with Novo Nordisk in India regarding the validity of the semaglutide patent, Dr Reddy's does not anticipate any delays or disruptions to its commercialisation plans. The company expects significant topline contribution from semaglutide, citing growing global demand for GLP-1 therapies in diabetes and weight management. Priced lower than Novo's offering (₹17,000 per month), Dr Reddy's plans to use its integrated manufacturing to enhance accessibility. Semaglutide is the first of 26 GLP-1 peptide-based drugs the company plans to launch globally over the next decade, with timing based on regional IP clearance. Dr Reddy's has guided for capital expenditure of approximately ₹2,700 crore in FY26, with major investments toward expanding peptide and biosimilar capacity in line with product-specific requirements. Segment Performance Global Generics: Revenue stood at ₹8,060 crore, up 10 per cent Y-o-Y, supported by new launches and stable volumes. North America: Revenue was ₹3,412 crore, down 11 per cent Y-o-Y due to price erosion in key products like Lenalidomide. The company launched five new products and filed one ANDA with the USFDA. As of June 2025, 73 filings are pending, including 70 ANDAs (43 Para IVs, 22 with potential First-to-File status) and three NDAs. Europe: Revenue surged 142 per cent Y-o-Y to ₹1,274 crore, driven by the NRT acquisition. The NRT business contributed ₹670 crore. Germany reported ₹320 crore (up 13 per cent), the UK ₹170 crore (up 10 per cent), and the rest of Europe ₹120 crore (up 30 per cent). Growth was led by new launches and forex gains, partly offset by price erosion. Thirteen new products were launched. Emerging Markets: Revenue rose 18 per cent Y-o-Y to ₹1,404 crore. Russia contributed ₹710 crore (up 28 per cent), the Commonwealth of Independent States and Romania ₹200 crore (up 2 per cent), and the rest of world territories ₹500 crore (up 13 per cent). A total of 26 new products were launched across these regions. Pharmaceutical Services and Active Ingredients: Revenue rose 7 per cent Y-o-Y to ₹818 crore, supported by new API launches, forex gains, and pharmaceutical services expansion. The company filed 12 Drug Master Files globally during the quarter. The results were announced post market hours. Dr Reddy's shares rose 0.58 per cent, closing at ₹1,247.50 apiece on the BSE.
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Business Standard
21-07-2025
- Business
- Business Standard
Pharma industry stares at muted Q1 earnings growth amid sliding sales
The Indian pharmaceutical industry is set to report a muted earnings performance for the first quarter of the financial year 2026 (Q1FY26), largely due to sliding sales of blockbuster generic cancer drug Revlimid coupled with moderated growth in the domestic formulations sales. Analysts estimate year-on-year (Y-o-Y) revenue growth of 9 per cent with a profit after tax (PAT) growth in the range of 3-4 per cent. Stable pricing scenario in the US generics market and rupee depreciation is expected to drive double digit revenue growth. Nuvama analysts said that the US sales will post a modest 1 per cent Y-o-Y growth affected by generic Revlimid price erosion. Some players like Lupin will see their US growth being driven by sustained market shares in products like generic Spiriva (respiratory drug) and the Tolvaptan (kidney disorder drug) launch. Aggregate margins for the pharma companies in the Nuvama universe is estimated to be around 26 per cent (down 32 bps Y-o-Y) weighed down by generic Revlimid price erosion. This ongoing price erosion in this key drug is likely to hurt US sales for Aurobindo, Dr Reddy's Laboratories (DRL), Cipla and Zydus Lifesciences in the quarter under review. Phillip Capital pointed out that DRL will continue to lead the Revlimid sales with $180 million followed by Cipla ($80 mn) and Zydus ($70 mn). 'While we expect 1 per cent Y-o-Y growth in US sales for our coverage universe, Zydus may post 4 per cent Y-o-Y growth due to incremental contribution from generic Myrbetriq, which can partially offset generic Revlimid price erosion. Lupin's US business is likely to grow 17 per cent Y-o-Y to $ 265mn due to the recent launch of Tolvaptan and stable market share in generic Spiriva,' Nuvama analysts said. Material new launches in the US remain limited. Phillip Capital said that while Indian drug companies will continue to see benefits from opportunities like generic Spiriva, Myrbetriq, Ustekinumab etc. in the US and Rupee depreciation, their US generics business is expected to see flat performance (2 per cent growth Y-o-Y) due to weaker generic Revlimid supplies and limited new launches. Sun Pharma's global specialty business is likely to post a robust showing in the first quarter while Cipla's US revenues are likely to remain flat sequentially at $220 million. Its market share in Lanreotide (for neuroendocrine tumours) has come down to 15 per cent, versus 20 per cent in Q1FY25, Nuvama said. Home turf On the domestic front, Torrent Pharmaceuticals, Sun Pharma and DRL tend to outperform in the first two months of Q1. The domestic pharma market has posted a 7 per cent steady growth with the cardiac, respiratory and neurological growth by 11.4 per cent, 9.5 per cent and 9.3 per cent Y-o-Y respectively. Oncology and cardiology are the two therapies that have registered double digit Y-o-Y growth. Nuvama estimated their coverage universe to report 10 per cent Y-o-Y domestic sales growth led by Torrent and Sun Pharma. Axis Securities Equity Research pointed out that on a sequential basis, however, the India business will see muted growth driven by sluggish performance in chronic therapies and a recovery in acute therapies. Axis expects some margin improvement (around 30 bps Y-o-Y) for most companies in its coverage, led by new launches, stable freight costs and decline in active pharmaceutical ingredients (API) prices, lower input costs and a better product mix towards niche launches. Healthcare segment In the healthcare segment, average revenue per occupied bed (ARPOB) is estimated to grow by 7-8 per cent Y-o-Y leading to revenue growth of 14-19 per cent Y-o-Y and 5-6 per cent quarter-on-quarter (Q-o-Q). Occupancies are also likely to improve by 100bps. Nuvama said that hospitals are on a steady footing in a seasonally soft quarter, barring Apollo Hospitals, which would see lower occupancy (down 300bps Y-o-Y) due to Bangladesh patients' impact. JM Financial said that despite Q1 being historically soft for the hospital sector, Q1FY26 is anticipated to demonstrate robust performance. 'The coverage universe is projected to achieve over 15 per cent Y-o-Y revenue growth and 21 per cent Ebitda growth. This strong performance is primarily driven by organic bed additions and improvement in ARPOB, further bolstered by the integration of new hospital facilities, notably by Max Healthcare and KIMS.' Meanwhile, Nuvama estimates Apollo revenue growth at 11 per cent, Fortis at 15 per cent, Jupiter 16 per cent. Analysts expect growth to recover strongly to 15 per cent Y-o-Y post-slowdown seen in last quarter. Vijaya remains one of the fastest growing (17 per cent Y-o-Y); Metropolis is likely to turn in a good recovery (13 per cent Y-o-Y organic). Dr Lal Pathlabs (up 11 per cent Y-o-Y) to report steady numbers while Agilus (5 per cent Y-o-Y) would remain soft. The sector margin to stay largely steady at around 28 per cent, said analysts.
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Business Standard
21-07-2025
- Business
- Business Standard
Revlimid erosion, slower domestic growth to weigh on Indian pharma Q1
The Indian pharmaceutical industry is expected to report a muted earnings performance for the June quarter, primarily due to declining sales of the blockbuster cancer drug generic Revlimid and subdued growth in domestic formulations. Analysts estimate year-on-year (YoY) revenue growth of 9 per cent, with profit after tax (PAT) growth in the range of 3–4 per cent. A stable pricing environment in the US generics market and rupee depreciation are expected to support double-digit revenue growth. However, pricing pressure on Revlimid is proving a major drag. Nuvama analysts expect US sales to post a modest 1 per cent YoY growth, constrained by continued price erosion in generic Revlimid. Some players, such as Lupin, will see US growth driven by sustained market share in products like generic Spiriva (a respiratory drug) and the launch of Tolvaptan (for kidney disorders). Aggregate margins for pharma companies in the Nuvama coverage universe are estimated to be around 26 per cent, down 32 basis points YoY, largely weighed down by price pressure on Revlimid. This trend is likely to impact the Q1FY26 performance of Aurobindo, Dr Reddy's Laboratories (DRL), Cipla and Zydus Lifesciences. Revlimid erosion remains key headwind Phillip Capital noted that DRL will continue to lead Revlimid sales with $180 million, followed by Cipla at $80 million and Zydus at $70 million. 'While we expect 1 per cent YoY growth in US sales for our coverage universe, Zydus may post 4 per cent YoY growth due to incremental contribution from generic Myrbetriq, which could partially offset Revlimid's erosion. Lupin's US business is likely to grow 17 per cent YoY to $265 million due to the recent launch of Tolvaptan and stable market share in generic Spiriva,' Nuvama analysts said. Material new launches in the US remain limited. Phillip Capital observed that while Indian drugmakers will continue to benefit from opportunities such as generic Spiriva, Myrbetriq and Ustekinumab, along with the rupee's depreciation, the US generics business is expected to post flat growth of around 2 per cent YoY due to weakening Revlimid supplies and few new launches. Sun Pharma's global specialty business is expected to post a strong Q1 performance, while Cipla's US revenue is likely to remain flat sequentially at $220 million. Its market share in Lanreotide (for neuroendocrine tumours) has declined to 15 per cent, from 20 per cent in Q1FY25, according to Nuvama. Domestic growth slows, chronic therapies drag On the domestic front, Torrent Pharmaceuticals, Sun Pharma and DRL tend to outperform in the first two months of Q1. The overall domestic pharma market has posted steady 7 per cent growth, with cardiac, respiratory and neurological therapies registering 11.4 per cent, 9.5 per cent and 9.3 per cent YoY growth, respectively. Oncology and cardiology were the two therapy areas that recorded double-digit growth. Nuvama estimates its coverage universe to report 10 per cent YoY growth in domestic sales, led by Torrent and Sun Pharma. However, Axis Securities Equity Research noted that sequentially, the India business is likely to see muted growth, weighed down by sluggish chronic therapy performance and only a modest recovery in acute therapies. Margins may see some tailwinds Axis Securities expects margin improvement of around 30 basis points YoY for most companies in its coverage, aided by new launches, stable freight costs, declining active pharmaceutical ingredient (API) prices, lower input costs and a shift in product mix towards niche products. Hospitals to deliver strong Q1 despite seasonality In the healthcare segment, average revenue per occupied bed (ARPOB) is expected to grow 7–8 per cent YoY, driving revenue growth of 14–19 per cent YoY and 5–6 per cent quarter-on-quarter (QoQ). Occupancy rates are also likely to improve by 100 basis points. Nuvama noted that hospitals are on solid ground in what is typically a seasonally soft quarter, barring Apollo Hospitals, which may see a 300 basis point YoY drop in occupancy due to reduced patient inflow from Bangladesh. JM Financial said that despite Q1 traditionally being weak for hospitals, Q1FY26 is anticipated to show strong performance. 'The coverage universe is projected to achieve over 15 per cent YoY revenue growth and 21 per cent EBITDA growth. This strong performance is primarily driven by organic bed additions and improvement in ARPOB, further bolstered by the integration of new hospital facilities, notably by Max Healthcare and KIMS.' Nuvama estimates Apollo's revenue growth at 11 per cent, Fortis at 15 per cent, and Jupiter at 16 per cent. Diagnostics show signs of recovery Analysts expect growth to recover strongly to 15 per cent YoY following the slowdown in the previous quarter. Vijaya remains one of the fastest-growing players with 17 per cent YoY growth. Metropolis is likely to post a healthy recovery at 13 per cent YoY (organic). Dr Lal PathLabs is expected to grow 11 per cent YoY, while Agilus may see softer growth of 5 per cent. The sector's margin is expected to remain steady at around 28 per cent, analysts added.
