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The ADR is currently trading at $11.90, down $0.67 from the previous close. The company’s quarterly performance was impacted by provisions related to the semaglutide ingredients issue and a decline in generics revenue in North America.
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Drugmaker Dr Reddy's Laboratories ADR (American Depositary Receipt) is trading 5.29% lower on the New York Stock Exchange (NYSE) on Wednesday (July 22), after it reported a 69.2% decline in consolidated net profit to ₹434.8 crore in the first quarter ended June 30.
The ADR is currently trading at $11.90, down $0.67 from the previous close. The company’s quarterly performance was impacted by provisions related to the semaglutide ingredients issue and a decline in generics revenue in North America.
Dr Reddy's posted a consolidated net profit of ₹1,409.6 crore in the corresponding quarter last fiscal, Dr Reddy's Laboratories said in a regulatory filing.
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Its consolidated revenue in the first quarter stood at ₹8,070.5 crore against ₹8,545.2 crore in the year-ago period, it added. Total expenses in the quarter under review stood at ₹3,375.6 crore compared to ₹3,115.2 crore, the company said.
The company said that in the first quarter, it had an adverse impact of a provision of ₹239.7 crore towards inventory and other associated costs related to semaglutide's active pharmaceutical ingredient (API).
Certain batches of semaglutide were found to be out of specification due to an issue associated with the API used in the product, the company said, adding that "appropriate measures are being taken to ensure product quality and resumption of supplies".
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In the first quarter, global generics revenue slipped 5% to ₹7,199.3 crore from ₹7,562 crore in the corresponding quarter of the last fiscal. Generics revenue from North America declined 35% to ₹2,204.8 crore against ₹3,412.3 crore in the year-ago period.
On the other hand, in India, generics revenue grew by 17% to ₹1,717.7 crore compared to ₹1,471.1 crore a year ago, the company said. Emerging markets generic revenue climbed 31% to ₹1,832.8 crore against ₹1,404.2 crore in the year-ago period, and rose 13% in Europe to ₹1,444 crore compared to ₹1,274.4 crore.
Commenting on the results, Dr Reddy's Laboratories, Co-Chairman and MD GV Prasad, said, "Our Q1 FY27 performance reflected the expected transition beyond lenalidomide revenues, along with an unexpected impact related to semaglutide API".
He, however, said the company's underlying base business continued to deliver healthy double-digit growth across all key geographies. "Our focus remains on improving the health of our base business through disciplined execution and operational excellence, while building our future pipeline of peptides, biosimilars, and innovative assets to deliver long-term growth," Prasad added.
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(Edited by : Ajay Vaishnav)
