Dr Reddy's Q3 profit seen down 37%, US biz likely to be sluggish

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26 Aug, 2025 12:21

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Third quarter earnings of healthcare firm Dr Reddy's Laboratories are expected to be subdued led by weak US performance. Profit is seen falling 37 percent year-on-year to Rs 364.4 crore on dismal operational income.

Revenue during the quarter may decline 6.1 percent to Rs 3,725 crore compared with Rs 3,968 crore in same quarter last year, according to average of estimates of analysts polled by CNBC-TV18.

Operating profit is expected to fall 30 percent year-on-year to Rs 706.6 crore, and margin may shrink 650 basis points to 19 percent but may improve 110 basis points sequentially.

US business is likely to be sluggish due to lack of quality approvals during the quarter and increasing competition in key drugs such as Dacogen, Valcyte and Vidaza generic.

Edelweiss expects US business to decline 17 percent YoY to USD 246 million while Kotak estimates US business at around USD 252 million.

Revenue from Russia and Venezuelan markets is likely to be stable in Q3. Dr Reddy's Labs has stopped supplying to Venezuelan markets. Hence, absence of sales in Venezuela may impact in Rest of World business.

Analysts expect Russia / CIS to grow 7-8 percent YoY but may decline 7-8 percent in constant currency.

Domestic market growth is estimated at around 10-12 percent YoY and PSAI is expected to continue being sluggish due to lower US approvals for partners.

Key factors to watch out for would be commentary on three plants with warning letter - Srikakulam, Mriyaalguda and Duvaada. Inspection of 3 plants is expected in Q1CY17.