Dr Reddy’s Laboratories recorded a 69% year-on-year drop in its consolidated net profit for the first quarter of FY27. The decline was attributed to lower revenues in its global generics business, reduced North America sales, and disruptions in semaglutide supplies. The company’s net profit attributable to owners stood at Rs 4,435 crore, down from Rs 14,178 crore in the same period last year.
Revenue from operations also saw a decline of 5.5% year-on-year, dropping to Rs 8,070.5 crore from Rs 8,545.2 crore in the previous year’s quarter. The company’s operating performance weakened as well, with EBITDA falling by 60.4% to Rs 861 crore from Rs 2,173 crore a year earlier. The EBITDA margin contracted significantly from 25.3% to 10.6%.
Despite the overall decline, the company’s other income increased to Rs 355 crore during the quarter from Rs 290 crore in the same period last year. Dr Reddy’s Laboratories made a provision of Rs 240 crore for inventory and associated costs due to semaglutide supply disruptions in the quarter.
The disruption in semaglutide supplies, caused by an impurity issue in the active pharmaceutical ingredient, led to production suspensions. This has impacted the company’s plans to expand its presence in the semaglutide market. Additionally, the North American market, the company’s largest, experienced a 35.3% revenue decline to Rs 2,205 crore in the quarter.
Shares of Dr Reddy’s Laboratories closed 2.16% lower at Rs 1,179.90 apiece on the NSE following the weak quarterly performance.
