New Delhi: Shares of Dr Reddy's Laboratories Ltd fell sharply on Thursday after the pharmaceutical major reported a steep decline in its June quarter earnings, weighed down by a one-time provision linked to semaglutide and lower generics sales in North America.
The stock dropped as much as 8.70 percent to Rs 1,080.05, its 52-week low, on the BSE. On the NSE, it declined 6.91 percent to touch a 52-week low of Rs 1,101 as investors reacted negatively to the quarterly results.
Profit Takes Hit
Dr Reddy's reported a 69.2 percent decline in consolidated net profit to Rs 434.8 crore for the quarter ended June 2026, compared with Rs 1,409.6 crore in the corresponding quarter last year.
Consolidated revenue also slipped to Rs 8,070.5 crore from Rs 8,545.2 crore a year ago.
Meanwhile, total expenses increased to Rs 3,375.6 crore, compared with Rs 3,115.2 crore in the year-ago period.
Semaglutide Issue Weighs
The company said it recognised a Rs 239.7 crore provision towards inventory and related costs associated with the active pharmaceutical ingredient (API) used in semaglutide.
According to the company, certain batches of semaglutide were found to be out of specification because of an issue related to the API. It added that corrective measures are being taken to restore product quality and resume supplies.
Generics Business Slows
Dr Reddy's global generics business also remained under pressure during the quarter.
Revenue from the segment declined 5 percent to Rs 7,199.3 crore, compared with Rs 7,562 crore in the same quarter last year, mainly due to lower sales in the North American market.
Management Outlook
Co-Chairman and Managing Director GV Prasad said the quarter reflected the expected transition beyond lenalidomide revenues along with the unexpected impact from the semaglutide API issue.
He added that the company's underlying business continued to deliver healthy double-digit growth across key markets. The focus, he said, remains on strengthening the core business while investing in peptides, biosimilars and innovative products to support long-term growth.
Disclaimer: This article is for informational purposes only and should not be considered investment advice. Investors should consult qualified financial advisers.
