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Dr Reddy's Profit Plummets Amidst Fierce Competition
12 May
Summary
- Net profit dropped to ₹220 crore from ₹1,587.3 crore year-on-year.
- Weaker US sales and competition impacted Lenalidomide revenue.
- EBITDA margins compressed significantly to 13% from 29.1%.
Dr Reddy's Laboratories experienced a significant drop in net profit for the January-March quarter, reporting ₹220 crore compared to ₹1,587.3 crore in the prior year. Revenue from operations decreased by 12% year-on-year to ₹7,516.2 crore.
The primary driver for this downturn was weaker performance in the United States market. Intensifying competition and price erosion affecting its generic version of Lenalidomide, known as Revlimid, significantly impacted sales. Lenalidomide is a crucial oral immunomodulatory drug used in cancer treatment.
Consequently, the company's EBITDA slumped by 60.4% to ₹981 crore, leading to a sharp compression in EBITDA margins to 13% from 29.1% observed a year ago. Dr Reddy's limited exclusivity for Revlimid is set to end in January 2026.
Despite the financial results, the company recommended a final dividend of ₹8 per equity share. Co-Chairman & MD, GV Prasad, attributed the performance to lower lenalidomide sales and one-off events, while emphasizing a focus on cost efficiencies and portfolio optimization.
