Dr Reddy's Laboratories Q2 Results: Profit Falls 9%, Misses Estimates

Dr Reddy's Laboratories Ltd.'s profit fell in the second quarter of fiscal 2025, missing analysts' estimates.

The bottom line of the pharmaceutical company declined 9% year-on-year to Rs 1,341.90 crore in the quarter ended September 2024, according to an exchange filing on Tuesday. That compares with the Rs 1,427-crore estimate that analysts tracked by Bloomberg had projected.

• Revenue up 16.5% at Rs 8,038.2 crore versus Rs 6,902.6 crore (Bloomberg estimate: Rs 7,717 crore).

• Ebitda up 3% at Rs 2,076.5 crore versus Rs 2,008.3 crore (Bloomberg estimate: Rs 2,159 crore).

• Ebitda margin at 25.8% versus 29.1% (Bloomberg estimate: 28%).

• Net profit down 9% to Rs 1,341.9 crore versus Rs 1,482.2 crore (Bloomberg estimate: Rs 1,427 crore).

The revenue growth on a year-on-year basis was driven by global generics segment earnings, the company said, adding that the sequential growth of 4% was led by the earnings in generics business in Europe and emerging markets.

Dr Reddy's expenses on research and development during the quarter under review stood at Rs 730 crore, which is 9.1% of the revenue earned during the period. In comparison, the R&D expense stood at 7.9% of the revenue in the year-ago period. "These investments support ongoing development in generics, biosimilars, and novel oncology assets," the company said.

The drugmaker's income tax during the July-September period stood at Rs 580 crore.

The revenue from business in North America grew 17% YoY, despite a 3% QoQ decline. The annual growth was driven by increased sales volumes, but was partially offset by price erosion.

Revenue from the Europe market rose 9% YoY, driven by new product launches.

Revenue from the Indian market jumped 18% YoY, led by by revenues from the vaccine portfolio, new product launches and price increases.

The quarterly results were declared by Dr Reddy's after the market hours. The company's shares had closed 0.68% higher at Rs 1,276.9 apiece on the NSE, compared to a 0.91% climb in the benchmark Nifty 50.