- Dr Reddy's Q4 net profit dropped 86% YoY to Rs 221 crore from Rs 1,593 crore
- Revenue declined 11.5% YoY to Rs 7,546 crore, missing analyst expectations
- EBITDA fell 60.4% YoY to Rs 981 crore with margin at 13% versus 29.1% last year
Dr Reddy's Laboratories Ltd. in on brokerages' radar after the pharma giant saw an 86% YoY (year-on-year) plunge in its consolidated net profit for the financial results for the fourth quarter of fiscal 2025-26. The company's net profit was At Rs 221 crore from Rs 1,593 crore in the year-ago period. The firm's net profit missed Bloomberg analyst's estimates of Rs 871 crore.
The firm suffered impact from a Shelf Stock Adjustment ('SSA') related to lenalidomide of Rs 4,530 crore It also dealt with impairment of CAR-T assets and Eftilagimod Alfa of a total of Rs 27 crore and provisions related to VAT (value added tax) liability of Rs 14 crore. The company declared a dividend of Rs 8 per share. The record date for determining the eligibility of the shareholders is July 10.
Dr Reddy's Laboratories Q4 Results Highlights
- Net Profit down 86.1% At Rs 221 crore Vs Rs 1,593 crore
- Revenue down 11.5% At `7,546 Cr Vs `8,528 Cr YoY
- Ebitda down 60.4% At `981 Cr Vs `2,475 YoY
- Ebitda Margin At 13% Vs 29.1% YoY
Brokerages aren't impressed, and broadly maintain a bearish view. Morgan Stanley retained its Equal-weight rating, but cut its target price to Rs 1,215 from Rs 1,259. Citi maintained its Sell call, with a target of Rs 1,070, and Jefferies echoed the sentiment, with an Underperform rating, and an unchanged target of Rs 1,040.
Morgan Stanley on Dr Reddy's
- Maintain Equal-weight; Cut TP to Rs 1,215 from Rs 1,259
- Q4 revenues and EBITDA below estimates
- Semaglutide ramp-up slightly delayed
- Brazil approval awaited
- Competition risks remain elevated
Citi on Dr Reddy's
- Maintain Sell with TP of Rs 1,070
- US sales back to pre-gRevlimid levels
- Core profitability and US revenues remain under pressure
- Non-US growth seen increasingly margin dilutive
Jefferies on Dr Reddy's
- Maintain Underperform with TP of Rs 1,040
- Q4 margins impacted by weak US business and higher SG&A
- India, Russia and Europe remained growth drivers
- Slower semaglutide uptake poses downside risks
- Delay in Abatacept launch also a concern
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