Dr Reddy's Lab Q3 PAT rises 2.4% YoY to Rs 1,413 cr

Dr Reddy's Laboratories reported 2.4% increase in consolidated net profit to Rs 1,413.70 crore in Q3 FY25 compared with Rs 1,380.90 crore in Q3 FY24.

Net sales jumped 15.9% to Rs 8,358.60 crore in Q3 FY25 compared with Rs 7,214.80 crore in Q3 FY24. Profit before tax (PBT) rose 2.5% YoY to Rs 1874.30 crore in Q3 FY25. EBITDA stood at Rs 2298.2 crore inQ3 FY25, registering the growth of 8.88% as compared with Rs 2110.7 crore in Q3 FY24. EBITDA margin declined to 27.5% in Q3 FY25 as compared with Rs 29.3% in Q3 FY24.

The stock dropped 4.54% to Rs 1,230.80 amid media reports highlighting concerns over the declining revenue contribution from Revlimid, which has also pressured margins. Revlimid, a blockbuster cancer drug and a significant growth driver for Dr. Reddy's in recent years, is nearing its patent expiry in January 2026, raising fears of a potential revenue decline post-expiry.

A foreign brokerage noted that while the launch of the anti-diabetic drug Semaglutide in Canada in early 2026 could offer some relief to Dr. Reddy's, it is unlikely to fully compensate for the revenue loss from Revlimid. While Dr. Reddy's management has identified other growth drivers, the brokerage believes that Semaglutide will primarily fuel growth in the short term, with other long-term factors expected to contribute later.

The company's selling, general & administrative (SG&A) expenses for Q2 FY25 were at Rs 2,410 crore, YoY increase of 19%. Research & development (R&D) expenses in third quarter of FY25 stood at Rs 670 crore, 8% of revenue.

During the quarter, revenues from emerging markets segment stood at Rs 1,440 crore, year on year increase of 12%, growth is attributable to market share expansion as well as new product launches. Revenues from India market during the quarter stood at Rs 1,350 crore, year on year increase of 14%, Growth was led by revenues from the in-licensed vaccine portfolio, new product launches as well as price increases, partially offset by lower volume pick-up in certain brands in Cardiac and Gastrointestinal therapy areas.

Revenues from the North American market stood at Rs 3,380 crore, reflecting a 1% year-on-year increase. This growth was driven by higher volumes, new product launches, and favorable foreign exchange movements. However, these gains were partially offset by price erosion compared to the previous year.

During the quarter, revenue from Europe market was at Rs 1,210 crore, year on year growth of 143%. The growth includes revenues from the recently acquired NRT portfolio. Underlying growth excluding NRT is 22% YoY.

Revenues from Global Generics (GG) during the quarter grew 17% YoY to Rs 7,380 crore, growth was largely driven by revenues from the acquired NRT portfolio, higher volumes and new product launches.

Revenues from Pharmaceutical Services and Active Ingredients (PSAI) rose 19.51% to Rs 840.70 crore in Q2 FY25, mainly driven by momentum in base business volumes, growth in services business and revenues from new products.

Commenting on the results, Co-Chairman & MD, G V Prasad said, "We delivered double digit growth aided by our newly acquired NRT business, new launches and improved operational efficiencies. We remain committed to addressing patient needs by advancing healthcare through access, affordability and innovation."

Dr Reddy's Laboratories is engaged in providing medicines. The firm operates in three segments: global generics, pharmaceutical services and active ingredients (PSAI) and proprietary products.

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