Dr Reddy's posts smaller-than-expected Q3 profit fall on domestic boost

Dr Reddy’s Labs Q3 Results

• Dr Reddy's quarterly profit fell 14.4 percent, less than analysts expected
• India business revenue rose 19 percent, offsetting North America sales decline
• Total revenue grew 4.4 percent to 87.53 billion rupees, beating estimates

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Indian drugmaker Dr Reddy's reported a smaller-than-expected fall in quarterly profit on Wednesday on the strength of its domestic portfolio.

Consolidated net profit fell 14.4% to 12.1 billion rupees ($132 million) in the quarter ended December 31.

Analysts, on average, had estimated profit to fall to 10.70 billion rupees, as per data compiled by LSEG.

Dr Reddy's, one of India's top three drugmakers by revenue, has been boosting its India business with new product launches and collaborations across therapy areas. The company strengthened its gastrointestinal portfolio with two new launches last year and partnered with Nestle India in 2024 to make supplements and nutraceuticals.

Revenue from its India business rose 19% to 16.03 billion rupees, helped by price increases and contributions from Johnson & Johnson's anti-vertigo therapy brand Stugeron that Reddy's acquired in September.

However, revenue from North America, the company's biggest market, fell 12% to 29.64 billion rupees, pressured by slowing sales of Lenalidomide, leading to the drugmaker's first profit fall in five quarters.

Lenalidomide is a generic version of Bristol-Myers Squibb's popular cancer treatment drug Revlimid. Its sales in the U.S. have been under pressure for several quarters in order to price out competition. This is set to get worse as drugmakers are set to begin full and unrestricted sales from January-end, according to analysts.

Total revenue from operations rose 4.4% to 87.53 billion rupees, above analysts' estimate of 84.17 billion rupees.

Dr Reddy's shares fell 0.92% to close at Rs 1,156 apiece on NSE.