Dr. Reddy’s Laboratories – Latest Fundamental Update

Dr. Reddy’s Laboratories (DRREDDY) reported a weak Q1 FY27 on a YoY basis. Consolidated revenue declined 5.6% to ₹8,071 crore, while PAT fell sharply by about 69% to ₹444 crore. EBITDA declined 55.7% to ₹1,009 crore and margin contracted to 12.5% from 26.7%. The biggest reason for the weakness was the North America business, where revenue fell about 35% YoY to ₹2,205 crore, primarily because of lower Lenalidomide sales. The company also took a one-time provision related to semaglutide, which further impacted Q1 profitability. There are nevertheless some positives. Revenue increased 7.4% QoQ, and Q1 EBITDA remained at ₹1,009 crore despite the difficult comparison. The company launched six new products in North America, while its broader portfolio across India, Emerging Markets, Europe and API businesses provides diversification. The stock is currently around ₹1,143–₹1,152, roughly 19% below its 52-week high of ₹1,414, so the market has already discounted part of the recent earnings weakness.