Dr. Reddy's Laboratories Q4 24/25 Earnings Call Transcript

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Provided by Quartr
May 9, 2025
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Operator

Ladies and gentlemen, good evening, and welcome to Quarter Four and Full Year FY 'twenty five Earnings Conference Call of Doctor. Debby's Laboratories Limited. As a reminder, all participant lines will be in listen only mode, and there will be an opportunity for you to ask questions after the listen I now hand the conference over to Madritha Periwa. Thank you, and over to you, ma'am.

Richa Periwal
Head of Investor Relations and Analytics at Dr. Reddy’s Laboratories

Thank you. Good morning and good evening to all of you. Thank you for joining us today for the doctor Reddy's earnings conference call covering the quarter and full year ended 03/31/2025. We appreciate your time and participation. Joining us today is the leadership team of doctor Reddy's Limited comprising mister, CEO, mister, our CFO, and the investor relations team.

Richa Periwal
Head of Investor Relations and Analytics at Dr. Reddy’s Laboratories

Earlier today, we released our results, which are now available on our website. We we will begin today's call with N. V. In presenting the financial highlights for the quarter and the year. Following this, will share his thoughts on the business performance.

Richa Periwal
Head of Investor Relations and Analytics at Dr. Reddy’s Laboratories

We will then open the floor for a q and a session. Please note that today's call is a copyrighted material of Doctor. Reddy and cannot be rebroadcasted or attributed in press or media outlets without the company's expressed written consent. This call is being recorded, and both the playback and transcript will be available on our website soon. All discussions and analysis in this call will be based on the IFRS consolidated financial statements.

Richa Periwal
Head of Investor Relations and Analytics at Dr. Reddy’s Laboratories

Additionally, today's discussion includes certain non GAAP financial measures. For a reconciliation of GAAP to non GAAP measures, please refer to our press release. Before we continue, I would like to remind everyone that the safe harbor provisions outlined in today's press release also applies to this conference call. Now I hand over the call to LJ.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

Thank you, Rikka. Greetings to everyone, and I hope you're all doing well. I'm pleased to present an overview of our financial performance for the fourth quarter and full year FY 02/2025. Fiscal year 02/2025 was another milestone year for the organization marked by strong financial performance. We achieved record high revenue exceeding US dollar 3,800,000,000.0 and crossed the US dollar 1,000,000,000 threshold in EBITDA for the first time.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

Both revenue and EBITDA registered double digit growth for the year. Please note that all the figures in this section are translated into U. S. Dollar using convenience translation rate of INR85.43, the rate prevailing as of 03/31/2025. Revenue performance.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

Consolidated revenue for Q4 FY twenty twenty stood at INR8506 crores, which is equivalent to US996 million dollars reflecting a year over year growth of 20% and a sequential increase of 2%. For the full year, revenues were at INR 32,554 crores and US3.8 billion dollars representing a growth of 17%. These results include contribution from the acquired consumer healthcare business, Signicotin replacement therapy, which added INR $5.97 crores in Q4 and rupees 1,202 crores for the full year. The overall revenue growth was driven by this strategic acquisition and contribution from our generic portfolio across geographies. Excluding sales of NRT business, revenue growth was at 12% on year over year for both the quarter and the year and 2% sequentially for the quarter.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

Gross margin, the consolidated gross profit margin for Q4 was at 55.6%, reflecting a year over year decline of 300 basis points and a sequential decline of three twelve basis points. The decline was mainly due to reduced manufacturing overhead leverage and higher milestone income recognized in the comparative period. Gross margin for the Global Generics and PSA segment stood at 59.346.3% for the quarter. For the full fiscal year, the consolidated gross margin remained stable at 58.5%, consistent with FY24. Gross margins for Global Generation PSA were at 6227.1% for the full year, respectively.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

Selling and general administrative expenses. SG and A expenses for the quarter amounted to rupees 2,406 crores, which is US dollars $282,000,000, marking a year over year increase of 17% and the remaining broadly flat quarter over quarter. SG and A as a percentage of the sales was 20.3%, representing a decline of 63 basis points year over year and 57 basis points on Q o Q. For the full year, s and a expenses amounted to rupees $9,003.87 crores in dollars 1,100,000,000.0, up by 22% year over year. This increase is primarily driven by recently acquired NRP business in the consumer health care segment, investment in other commercial activities and the higher prices impacting logistics cost.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

We continue to maintain disciplined cost structure while strategically allocating resources to strengthen existing business and expand into a new growth segment. Research and development investments, R and D remains a key pillar for long term growth. We continue to enhance our internal R and D effort with strategic external collaborations for new newest newest market. R and d expenditure for the quarter stood at rupees $7.26 crores, US dollar 80 5 million, representing year over year increase of 6% and quarter over quarter increase of 9%. As a percentage of revenue, R and D investment was at 8.5%, lower by 118 basis points year over year and higher by 57 basis points sequentially.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

Full year R and D investments were Rupees 2,007 and 38 crores, US320 million dollars reflecting a year over year increase of 20%. The investment largely focused on building differentiated pipeline spanning small molecules, biosimilars, complex generics including peptide and novel oncology assets. Other key financials, impairment loss is INR77 crores in Q4 and INR169 crores for the full year. The impairment pertains to certain product related intangible from main portfolio and other product related intangible forming part of the company's global generic business in India and Europe due to adverse market conditions. Other operating income is rupees $2.47 crores in Q4 versus 66 crores for the same quarter last year and $4.36 crores for the full year versus $4.20 crores in FY 'twenty four.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

Q4 increase is primarily on account of reclassification of foreign exchange gain related to foreign operations from FCTR. The full form of FCTR is foreign currency translation reserve post divestment of transport manufacturing facility. The net benefit to P and L on account of the SPTR reversal after adjusting CVRN cost and other onetime cost is INR 121 crores. Earnings EBITDA, EBITDA for the quarter was 2,475 crores, US490 million dollars reflecting a year over year growth of 32% and quarter over quarter growth of 8%. EBITDA margin was at 29.1, an increase of two sixty seven basis points on year over year and 160 basis points sequentially.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

For FY five, EBITDA stood at INR 9,213 crores, US1.1 billion dollars reflecting euro growth of 11%. The annual EBITDA margin stood at 28.3%, down from 29.7% in FY24, reflecting a decrease of 143 basis points. Finance income and profitability. Net finance income was $2.35 crores in Q4 versus 102 crores in previous year and $4.72 crores for full year as compared to $3.99 crores last year. Higher year over year income is due to net foreign exchange gains.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

Profit before tax was rupees 2,005 crores in U. S. Dollars $235,000,000 in Q4, up 25% year over year and 7% Q o Q. PBT for the year was INR 7,678 crores and in terms of $899,000,000 for the full year, a year over year growth of 7%. PBT margin was 23.6 for q four as well as for FY '25.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

PBT include taken in growth for the quarter and one on one growth for the full fiscal from the MRT portfolio. The effective tax rate was 20.8% for the Q4 and to 25.4% for the full year. ETR for the quarter is lower due to reversal of previously recognized tax provision pertaining to prior year and FCTR transfer to the income statement is not subject to taxation. The full year ETR is higher than the previous year mainly due to the reversal of previously recognized deferred tax assets related to land indexation and the recognition of previously unrecognized deferred tax assets on operating stock classes compared to the period ended 03/31/2034. We expect the ETF for FY '26 to be similar to the current fiscal year.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

Profit after tax is attributable to the equity holders who are $15.94 crores in dollars $187,000,000 in q four, up 22% year over year and 13% q two, translating to margin of 19% full year profit after tax was at rupees $5,006.50 crores, reflecting year over year growth of 2% and the margin of 17%. Earnings per share stood at rupees 19.1 for the quarter and 68 rupees 68.1 for the full year. Based on the company's performance, the board has recommended payment of dividend of rupees 8 per equity share of face value of rupees 1 each. This is equivalent to 800% of the face value for the year ended 03/31/2025 subject to approval of the members of the company. Cash flows and balance sheet operating working capital as of 03/31/2025 stood at rupees 12,590 crores, a reduction of $1.92 crores compared to 12/31/2034, primarily driven by improved receivable management.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

Capital expenditure was $7.67 crores for the quarter and 2,699 crores for the full year. Free cash flow for the quarter was rupees 1,110 crores and for the full year thirteen thirty two crores for the full year before acquisition related payout. At the event, the company maintained net cash surplus balance of 2,454 crore post NRP acquisition payout in September. Foreign currency cash flow hedges executed through derivatives instrument as of 03/31/2025 are as follows. An amount of US $786,000,000 has been hedged using structured derivative contracts maturing over the course of the next financial year.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

These contracts provide a minimum production rate of 80 rupees 85.9 per U. S. Dollar, while retaining the potential for upside participation in the event of U. S. Dollar appreciation.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

An amount of ruble 500,002,000 has been hit with a minimum production rate of rupees 0.91 for Russian ruble. These contracts are scheduled to mature within next three months. With this, I now request to take us through the key business highlights.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

Thank you, MDM, and a very good morning and good evening to everyone. Doctor.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

Reddy's delivered another year of robust performance, marked by highest ever annual revenues and profits. Fiscal year twenty twenty five was characterized by double digit growth across all business segments. During the period, we continued to present our growth and our businesses while investing and building our three strategic growth area, namely consumer health, innovation and biosimilars. Our efforts remain focused on driving operational efficiencies, strengthening our pipeline and enhancing organizational capabilities. In parallel, we execute on value accretive inorganic initiatives to complement our organic growth in alignment with our stated strategic objectives.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

I would like now to highlight some of the key financials for the fiscal year as well as important updates from the fourth quarter. '1, we sustained momentum and delivered healthy double digit revenue growth of 20% in q four and 17% for the full fiscal year. EBITDA margins remained resilient, exceeding 29% from the quarter and closing the full year at over 28%. Return on capital employed ROCE reached 27.7%, underscoring our continued focus on capital efficiency and value creation. We concluded the fiscal with a net cash surplus of 287,000,000 US dollars, thereby enhancing our financial flexibility to support future growth initiatives.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

Our biosimilars strategy progressed this quarter to key strategic partnerships. We secured exclusive commercialization rights for the daratumumab biosimilar candidate from Helios in The United States and Europe, reinforcing our oncology portfolio. We signed an agreement with BioThera to commercialize Ustre, Kinomab, and Golubumumab biosimilar candidates with a primary focus on Southeast Of Asia markets. The U. S.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

FDA also accepted the filing of our partner, venusumab biosimilar, making a key milestone in our investment within regulated biosimilar markets. The phased integration of our newly acquired nicotine replacement therapy NRT business is moving forward as planned. The United Kingdom was successfully integrated at the start of the month, and we are on track to complete the integration of The Nordics in the next phase. We are demonstrating our commitment to bringing innovation to India and improving health care access through strategic partnership. We extend our collaboration with Sanofi to introduce Bayfocus, which is nirsevimab, a novel drug for pre preventing RSV.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

In partnership with ARK Abilor, we launched this Sensimon, an immunotherapy product for how that might induce allergies. We commenced participation in the government of India Jana Ashwadi program with one of our products. We divested our Shreveport manufacturing facility in Louisiana, United States. On the regulatory front, our API manufacturing facility, CTO two, located in Bolivar, Ahmedabad, received the VI status from the US FDA following a successful GMP inspection conducted in November 2024. We continue to deliver industry leading performance in sustainability, earning multiple recognition for environmental, social, and government ESG initiatives.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

Our eco bodies improved to 73, positioning us among the top 15% of the company assessed globally. We were able we we were also honored with climate action program two point zero degrees award by CII in the highest resilient category with the within the light manufacturing sector. We're recognizing the leadership category on the Indian corporate government, Scopeka twenty twenty four, by institutional investor advisory services. I will now walk you through the key business highlights for the quarter and the full fiscal year. Please note that all figures referenced in these sections are presented in the respective local currencies.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

Our North America generic business generated revenue of $418,000,000 for the quarter, reflecting a year on year growth of 7% and a sequential growth of 4%. For the full fiscal year, revenue stood at million, representing a 10% increase over the previous year. This performance was primarily driven by increased volume in key products and successful new product launches, partially offset by price erosion. This quarter, we launched seven new products, bringing the total for the fiscal year to 18. We expect this growth momentum to continue into FY '26.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

Our European generic business reported revenues of €140,000,000 for the quarter, reflecting a year on year growth of 142% and sequential increase of 4%. For the fiscal year, revenues stood at €395,000,000 representing a growth of 73% compared to the previous year. Our strong performance, driven by contribution from the NRP business, higher base business volumes and gains from new product launches, helped offset pricing pressures. Excluding the contribution of the NRP business, European generic business recorded a year on year growth of 29% and a quarter on quarter growth of 11% in q four and a full year growth of 15%. This quarter, we launched ten year generic products in Europe, bringing the total for the fiscal year to 39.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

Our emerging market generic business reported revenues of $13.98 CR Indian CR in q four, reflecting a year on year growth of 16% and sequential decline of 3%. For the full fiscal year, revenue stood at 5,477 crore, representing a year on year growth of 13%. The performance was mainly driven by higher volume and new product launches, partially impacted by unfavorable ForEx. During the quarter, we launched 26 new products across various emerging market countries, bringing the total for FY '25 to eighty five quarters. Within this segment, our Russia business posted a year on year growth of 27% in constant currency for the quarter, although it experienced a sequential decline of 13%.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

On a previous basis, the Russia business recorded a growth of 24% in constant currency terms. The India business recorded revenue of INR $13.00 5 crore in Q4, reflecting reflecting a double digit year on year growth of 16%, a 3% sequential decline from the quarter. For the full fiscal, the revenues were 5,373 core rupees, representing a sixteen year on year growth. Excluding the contribution of the in licensing vaccine portfolio, the business recorded a 6% growth in q four and for the full year, driven mainly by successful new product launches and favorable pricing. According to IQVIA, we have maintained our position as the third largest player in Indian pharmaceutical market, IPM, and has marginally outperformed the IPM with a moving annual total M and A growth of 8.4% compared to the IPM growth of 8%.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

In addition to the Sanofi and Nestle portfolio, we have launched 23 brands during the fiscal. Our PeaceSAI business recorded revenues of $112,000,000 in Q4 in FY 'twenty four, reflecting an year over year growth of 13% and sequential growth of 15%. For the full fiscal year, revenues stood at $4.00 $1,000,000 representing growth of 12% compared to the previous The growth was primarily driven by increased volume contribution from new API launches and growth in our a contract development and manufacturing organization, CDMO business. During the quarter, we filed 52 drug master filed D and A including seven for The United States, bringing the total number of filings for the year to 111. We remain committed to investing in our pipeline to drive future growth, further supported by strategic collaboration, focus on innovation.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

Our R and D investment for the quarter amounted for 26 crores, reflecting year over year growth of 6% with growing emphasis on complex assets such as GLP-one and biosimilars. Additionally, we completed 95 global generic filings, bringing the total for the fiscal year to two forty nine. In FY 2026, we'll continue to expand and strengthen our core businesses, drive value to portfolio management, grow our presence in consumer healthcare, innovative therapies and biosimilars, leveraging our commercial footprint and explore value accretive acquisitions and partnerships and maintain financial discipline to build the foundation for sustainable future growth. And with that, I would like to open the floor for questions and answers.

Operator

Shall we open the floor for questions?

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

Yes. Yes, please.

Operator

Thank you very much. Participants are requested to ask not more than two questions at a time and to rejoin in case of incremental queries. Ladies and gentlemen, you may press and one The first question is from the line of Neha Manapuria from Bank of America.

Operator

Please go ahead.

Neha Manpuria
Neha Manpuria
Senior Analyst at Bank of America

My first question is on status. It has you know, given you speak to the policymakers and customers, what is your sense on the extent of tariff or, you know, to what level the tariff could be implemented on generic? Could it be in the API? Could patients be included? And the second part is given that Redis does not have any manufacturing in The US, you know, what are the mitigation factors that we are looking in case status is implemented for generic?

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

Yeah. Thank you. First, obviously, I wish I knew and and how much status will come. We are preparing ourselves for the scenarios, and we obviously working carefully the the information as it will come. At this stage, the main effort is to ensure sustainable supply.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

So the main activity, as we speak, is to work closely with our customers and see what is the need in terms of inventories, future inventories, as well as new product demand, identify products that may have a supply disruption and try to to help them to to address it. We are all waiting to see what will be after that the new policies, and accordingly, we will address. I think it's the API. If the country of origin will be based on API or pharma, I don't know. Most of the people that believe that it's it's it's for API, but we'll need to wait and see for formal communication in the district.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

As for the production footprint in in The US, I don't think that at this stage, the generic industry is having a short term issue here. As a company, we would love to have a footprint in that respect. It just has to be the right asset. We are always looking for an asset, but we are not going to do this specific activities to build footprint is more if the right opportunity will come to us, we will be more than happy to engage it.

Neha Manpuria
Neha Manpuria
Senior Analyst at Bank of America

And based on your composition with customers, would they be open to absorbing an impact of any potential tariff, you know, depending on how

Neha Manpuria
Neha Manpuria
Senior Analyst at Bank of America

much it is? Or, you know, what's

Neha Manpuria
Neha Manpuria
Senior Analyst at Bank of America

your sense of who bears the burden in case of the tariff?

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

My sense is nobody wants to absorb the tariff. Yeah. At least I did not find any clear that say, yeah, I would love to absorb. No. I think what will happen is there will be a certain adjustment here within which people will have to work together to see what to do with it.

Neha Manpuria
Neha Manpuria
Senior Analyst at Bank of America

Oh, okay.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

Every every so it is primarily about working together. What I want to emphasize is that under any scenario, we will not create a shortage of supply or a supply disruption to The US market. This is very, very important to us. We want to stay in The United States for many years, And and that's something that was also clarified in all of our discussion with our customers.

Neha Manpuria
Neha Manpuria
Senior Analyst at Bank of America

Understood. My second question is on our cost base. And then, as you know, given that our cost base has ballooned quite a bit, we well, even though our margins have reached, as we look at our limit split, three quarters out, you know, how much flexibility do we have to actually, you know, reduce this cost, you know, once that that it goes away? You know? So just trying to get to how we get to that 25% margins.

Neha Manpuria
Neha Manpuria
Senior Analyst at Bank of America

I know you have a lot of products, etcetera, which is not true. But from a cost perspective, how much flexibility do we have from an r and d and f g and a perspective to reduce cost?

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

So even now, you know that I think support revenue made, the patient's place will happen in January 2056 based on our current modeling. We will continue to have, like, enough support to what we have guided is, like, a sales double digit growth and then EBITDA ROT 25% or above at this point of time.

Neha Manpuria
Neha Manpuria
Senior Analyst at Bank of America

But in terms of r and d and s p and a cost, would it still be, you know, at similar level?

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

Yeah. Yeah. R and d and s g and a will be in the similar zone. I think the s g and a now is, like, somewhere 28% of the sales. Currently, 18% would be in the similar zone.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

So so, yeah, the main main way to do is we are planning to just go faster the the sales and the expenses. This is the one main, and we have the levers to do that in all the the relevant market as well as, obviously, using so if you want, I'll just put the levers that will allow both the growth as well as the the margins. First of we have to grow the base, and we are planning to grow the base significantly faster than the expenses while while using all kinds of productivity measures on the cost. It's not the cost cut. It's all kind of productivity measures.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

And of course, we are planning to have some nice products that are coming up, both semaglutide as well as the biosimilar that will come. And we did planning to continue to do this, and we are engaging quite a few opportunities. It's likely that so the combination of all of this, I believe that will help us to grow, cover, also form the potential decline because of linaclumab and and to keep our margins.

Neha Manpuria
Neha Manpuria
Senior Analyst at Bank of America

Understood. And then you see double digit growth, I assume, the extra limit.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

Yeah. We believe that if it's f o 26, double digit most is possible as well as maintaining the margins.

Neha Manpuria
Neha Manpuria
Senior Analyst at Bank of America

Okay. Thank you so much.

Operator

Thank you. Next question is from the line of Doctor. Kunal Damisha from Macquarie Group. Please go ahead.

Kunal Dhamesha
Kunal Dhamesha
Research Analyst at Macquarie Group

Hi.

Kunal Dhamesha
Kunal Dhamesha
Research Analyst at Macquarie Group

Thank you for your opportunity and good evening. The first question on the gross margin, which has kind of, you know, changed quite a bit dramatically on the q o q basis, and you highlighted the reduced operating leverage. But as far as I see, like, with our revenues have grown. Right? So I kind of failed to understand how the operating leverage has kind of worked other way for us.

Kunal Dhamesha
Kunal Dhamesha
Research Analyst at Macquarie Group

So if you can provide some more color on that, would be great. That's my first question.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

Yeah. Thanks, Konal. Here, you know, like, when like, the one off cost I think this quarter are there a part of the manufacturing overhead as per our policies that create it like a it's impacted adversely.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

Like in the report plan, we did they were said to be a just had a severance cost. That's the onetime cost effect impact the part of the manufacturing over it. And similarly, the second just I articulated earlier, this is the as compared to the q three and the q four, our out licensing income is lower. That will have a direct impact on the gross margin. That's where, like, a 300 basis points is lower in this quarter.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

We believe, like, not this will be this will be, like, a one off, and then we'll go back to our normal level. Can you please quantify the severance cost onetime impact for this quarter? That is not we did not give right now, but it's not a very small amount. It's not. What I'm just saying, maybe if I have to pay out of 300 basis points of manufacturing overhead, this is a one plus another our accounting portion also.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

Overall, it has impacted point 8% of out of 80 basis points out of 300 basis points.

Kunal Dhamesha
Kunal Dhamesha
Research Analyst at Macquarie Group

That's the severance cost. And then maybe another 50 basis points.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

Just pull up. It is not a severance cost alone.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

There are other costs also.

Kunal Dhamesha
Kunal Dhamesha
Research Analyst at Macquarie Group

Okay. 80 basis point is one off. And then the proprietary product milestone not coming is incremental to that 80 basis point.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

Yeah.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

That is the one. And then, like, a little bit on the inventory also, there is a overhead set. Overall, put together, I think they've all happened in one quarter. That's why you see that there is a 300 basis points.

Kunal Dhamesha
Kunal Dhamesha
Research Analyst at Macquarie Group

Sure.

Kunal Dhamesha
Kunal Dhamesha
Research Analyst at Macquarie Group

Sure. Sure. And, Mano, just a related question. If I look at the NLT business, the PVT margin between the two quarters has a meaningful delta of around 500 basis points. Right?

Kunal Dhamesha
Kunal Dhamesha
Research Analyst at Macquarie Group

So is there a seasonality? And, you know, when we look at this business on a full year basis, how should we kind of think about the, you know, this business? Because based on two quarters, really difficult for us to understand.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

So overall, for this business, earlier, we also spoken our EBITDA margin in the zone of, like, a 25%. This and because I don't know why the fluctuation between the q three versus q four, there are a lot of integration costs.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

I don't know. That's where it's impacted. Otherwise, when you are modeling, the EBITDA, you can take it at, like, a 25%.

Kunal Dhamesha
Kunal Dhamesha
Research Analyst at Macquarie Group

Okay. Sure.

Kunal Dhamesha
Kunal Dhamesha
Research Analyst at Macquarie Group

And, Manu, one question for Erez. If you could provide update on our GLP one or or, let's say, generic semaglutide, you know, product across various market and also the Abataset product.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

Sure. So we are gearing up to launch it during the calendar '26 in all the all the markets that the IP landscape will allow us to launch. So this is still intact, and we are progressing nicely in our preparation for that.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

As for abatacept, so far so good. We are close to to we are deep into the q into the phase three. And so far, it looks like it's the timeline is did not change, and we are planning to submit the product somewhere in the end of this calendar end of twenty five, to be ready to launch the IV at as immediately after part of expiration. And we sent for the sub q, which will become a year later because of, again, patent related issues. So once the IP landscape for the last two launches, we will do so.

Kunal Dhamesha
Kunal Dhamesha
Research Analyst at Macquarie Group

Right now, it's phase three, which is currently going on. Right?

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

Yeah. The phase three is going on, and we are planning to submit by the end of this calendar year, by the end of twenty five.

Kunal Dhamesha
Kunal Dhamesha
Research Analyst at Macquarie Group

Okay.

Kunal Dhamesha
Kunal Dhamesha
Research Analyst at Macquarie Group

Okay. And one question, I'll join back with you. All the best.

Operator

Thank you. Next question is from the line of Madhav Marda from Fidelity.

Operator

Please go ahead.

Madhav Marda
Madhav Marda
Investment Analyst at Fidelity

Hi. Good evening. Just a follow-up to the previous question. Could you help us maybe understand the sizing of the generic opportunity for us in markets such as Canada, Brazil, and the other other EMs where it goes off within next year.

Madhav Marda
Madhav Marda
Investment Analyst at Fidelity

You know, we we obviously have invested in capacity for generic semaglutide. But and what we understand looking at penetration rates in, let's say, Canada or Brazil severely underpenetrated because supply was short and obviously, there's very much higher price point. So as some of this sort of supply comes through and prices go down, how do we see the volumes expanding for this product, let's say, in Canada and Brazil? To give us some sense, sir, that would be good.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

Yes.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

So, naturally, Canada is is one of the markets that will open early. And what think the people from Roche is that exclusivity that will be finished in the January. The the product, to the best of our knowledge, based on the the marketing report, is growing nicely. And then and then and attrition according to IQVIA and the and the financial report, the market price is around $1,800,000,000, which suggests that it's around, give or take, 10000000p, and it's, of course, give or take. So the it's a very nice market.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

The CAGR is the a big somewhere between in some report, I saw 28%. In another report, I saw 39%. It's a very, very high level of growth eventually. And when we saw the prevalence of the disease versus the use compared to other markets. It looks like that in Canada, there is room for growth or so quantity wise.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

So it's an interesting market. And once the IT landscape will allow us to launch it, we and assuming approval, we are planning to go. We are we see ourselves as one of the companies that have the opportunity to be a first or among the first in in Canada. We are planning to do the same in India, in Brazil, and the other markets in accordance to, of course, to whatever the IT landscape will allow us.

Madhav Marda
Madhav Marda
Investment Analyst at Fidelity

I see. So that that

Madhav Marda
Madhav Marda
Investment Analyst at Fidelity

10,000,000 times that you mentioned, that's the Canada market price today. Right? Did I understand that right?

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

Yeah. What I quoted to you, the numbers that I mentioned 10,000,000. Are

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

from the relevant reports about Canada.

Madhav Marda
Madhav Marda
Investment Analyst at Fidelity

Sure. Yeah. Sir, so that's what I was trying to understand that, you know, this is at a much higher price. So would you have any sort of sense in terms of this 10000000p?

Madhav Marda
Madhav Marda
Investment Analyst at Fidelity

Can this, you know, given that see, if you look at the obese population or the diabetic population in Canada, the size of the potential market can be, you know, maybe three to five times. So yeah. Could you give us some sense in the market to grow?

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

Yeah. Yes.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

I heard five times, but my knowledge is not different than those.

Madhav Marda
Madhav Marda
Investment Analyst at Fidelity

Five times. Yeah. Okay.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

So it will be probably read the same report.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

The the the prevalence is still the prevalence is still high. They use relatively to the prevalence is still low. I'll say three, four, or five times, I don't know eventually what will happen.

Madhav Marda
Madhav Marda
Investment Analyst at Fidelity

Yep.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

And but they clearly, that this is going to be an important product for Canada, and, we are very keen on it.

Richa Periwal
Head of Investor Relations and Analytics at Dr. Reddy’s Laboratories

Understood. Understood. Great. Thank you.

Operator

Thank you. Next question is from the line of Amit Sharjay from GM Financial. Please go ahead.

Amey Chalke
Analyst at JM Financial Ltd

Yeah. Thanks for taking my question.

Amey Chalke
Analyst at JM Financial Ltd

The first question I have, there is a gross margin drop, but the cost, there is also a reasoning given that there was a price erosion and one of the reasons for the gross margin drop. So is it possible for the management to give us some understanding what is The U. S.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

Business price erosion for the year and how The US business has done for the year for a quite good day, excluding revenue. So this gross margin, the price erosion is, like, on euro real basis.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

And in US, I think the price erosion is very stable. That's what we have put it in the press conference. We do not see any challenges even. In fact, the price erosion is, like, a much lower as compared in during FY '20 '5 compared to FY

Amey Chalke
Analyst at JM Financial Ltd

Sure.

Amey Chalke
Analyst at JM Financial Ltd

And the The US based business, how it has done for the year? It has grown? It has like, how it has performed?

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

I I is the The US business, they go. It's a it's a go.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

There is a nice fee. And it's primarily due to the usual new launches, market share gains, and and the the to just to make sure that in addition to what the NBN said, the price erosion that was in The US was relatively low, primarily as most of the product kind of, I believe, exhausted the potential of the price erosion. So it's normally when there is no price erosion, I just said it's not always a good time. But in in in our in our case, it's it was a very low single digit price erosion within the business.

Amey Chalke
Analyst at JM Financial Ltd

So second question I have in the on the revenue mix.

Amey Chalke
Analyst at JM Financial Ltd

In FY '26, I understand that Jan would be when the exclusivity is ending. But if we consider all the quota related quantity, which we would be booking before the Jan, how the distribution some we should expect to happen over next few quarters? Is it evenly distributed, or do you think that first half of the FY twenty six, we should expect revenue mix sales to be booked?

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

So we see it in accordance to the demand of the customer, but likely that we will the we will finish the what we can sell a few months before this in in order to make sure that our customers will not be with the with the with the goods on the shelf in order to avoid the price shelf adjustments. So likely that we will stop there a few months before that.

Amey Chalke
Analyst at JM Financial Ltd

Sure. Just last question, if I can squeeze in. We spoke on Catalan market related to semaglutide. However, traditionally, we have seen a a a generic capturing the branded market where the subscription is typically marketed by the innovator. However, here the market is severely under penetrated.

Amey Chalke
Analyst at JM Financial Ltd

Do you think there would be any need for you to market the product or even despite being a generic?

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

We believe that the demand from the customers will be strong enough that we don't need to market the product or introduce it to to the market. And what I believe can happen is that as the product will be much more affordable, and some of the use is is without reimbursement. So I believe that it will create an additional demand. But, no, we are not planning to actively market the product.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

That's the best.

Amey Chalke
Analyst at JM Financial Ltd

Sure. Thank you so much. I'll going back.

Operator

Thank you.

Operator

Next question is from the line of Bino from Lara Capital. Please go ahead.

Bino Pathiparampil
Head of Equity Research at Elara Capital

Hi. Good evening, Al. Just following up on revenue mix, are you seeing any price erosion significant price erosion in revenue mix as of now compared to six months back?

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

So so there is a factor also. Is also increase in quantities, so it's a combination of both. Yeah. I will not be able to tell you exactly the amount, as you know. But, yeah, there is a certain level of pressure.

Bino Pathiparampil
Head of Equity Research at Elara Capital

Okay. And just to reconfirm what I what I heard earlier, you I believe you said that for financial year '26, you can do a double digit growth and maintain the the margin at the same level of f y '25. Did I hear that correct?

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

Yes. That's what I said.

Bino Pathiparampil
Head of Equity Research at Elara Capital

Okay. Okay. And and once the revenue is quick to happen, which may be a 05/27, the margins may settle down back to your long term target range of around 25 or so. Is that how we look at it?

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

Yes.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

So so we always said that the 25% is indication for the place that we feel comfortable to be, giving enough total shareholder return, but also allowing us to invest in the future. So we will continue to aim for that amount. It it may fluctuate from quarter to quarter. Something will be above, some some below. But, yes, we are planning to be in this neighborhood also in the future and post linacolamide era.

Bino Pathiparampil
Head of Equity Research at Elara Capital

Understood. And one last question on CapEx. So this year's CapEx was, I think, more than double the previous year's level. Where has it mainly gone to? And for next year, what's the level we should look at?

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

So, largely, this major CapExes are going in two fronts. One is for the peptide, both for to create a infrastructure for both API and the formulation, and also to create a biosimilar strategy. Largely, these two are the major investment driving factors. Apart from that, suddenly, it seems like we are in the complex molecule journey, then there is a product specific investment as well. So that's where I think it is a total CapEx.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

And then we are asking for FY '20 '6. We believe at this point of time would be in the similar range for FY '20 '6 as well.

Bino Pathiparampil
Head of Equity Research at Elara Capital

Got it. Thank you.

Operator

Thank you.

Operator

I request to all the participants kindly proceed to two questions at a time, and we'll join the queue for a follow-up question. Next question is from the line of from Quantum Mutual Fund. Please go ahead.

Krishnendu Saha
Vice President - Equity Research at Quantum Asset Management Company

Yeah. Hi. Can you hear me?

Krishnendu Saha
Vice President - Equity Research at Quantum Asset Management Company

Hello? Yeah. Yeah. Thank you for taking my questions. Just quickly, could you talk about the

Krishnendu Saha
Vice President - Equity Research at Quantum Asset Management Company

Indian speaker breaker? Can you

Krishnendu Saha
Vice President - Equity Research at Quantum Asset Management Company

speak Spanish?

Operator

I'm I'm listening to sorry to interrupt you, but I'm losing your audio. Can you come provide a reservation for me, please?

Krishnendu Saha
Vice President - Equity Research at Quantum Asset Management Company

Yeah. Yeah.

Krishnendu Saha
Vice President - Equity Research at Quantum Asset Management Company

Can you hear me?

Operator

No, sir.

Richa Periwal
Head of Investor Relations and Analytics at Dr. Reddy’s Laboratories

Can you repeat now?

Operator

Sir, the line for the participant dropped. We move on to the next participant. Next question is from the line of from. Please go ahead.

Tushar Manudhane
Research Analyst at Motilal Oswal

Yeah.

Tushar Manudhane
Research Analyst at Motilal Oswal

Thanks for the opportunity. So for the Europe market, you know, FY twenty five has, you know, a great year if you could sort of elaborate on the growth prospects for this region, you know, x and r t as well for '26, '20 '7, maybe.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

Yeah. I agree with you. The office is growing area for us.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

We are planning to grow by first of we are expanding to more countries. We are launching more products, primarily leveraging the pipeline for The United States. We are going to launch biosimilars in Europe, both rituximab and bevacizumab and after that, the losmobilabatasib. And we are planning to, obviously, to grow the energy business. So indeed, Europe is going to be an important growth area for us.

Tushar Manudhane
Research Analyst at Motilal Oswal

Got you, sir. Sir, as far as among other reasons, like, because it can be manufactured using biological route as well as synthetic route. But any color if you could share in terms of at least the initial countries like India, Canada, would they be okay to approve the synthetic route and the competitive dynamics would be different if that happens? Or you think the competitive dynamics would be similar even if it is approved either through genetic route or a biological route.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

Yes.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

So we believe that the synthetic route can be approved for the for the injectable, for the bench. And the and the semisynthetic route is going to be used for the oral products. And and that's what we are planning to do. Synthetic for the injectable and semi synthetic for the other.

Tushar Manudhane
Research Analyst at Motilal Oswal

So likewise, the price erosion basis competition will be higher for synthetic group?

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

It's a it's a cost depends on how many people will launch the product in each one of the market. So it's not so much because of the synthetic versus not synthetic. It's it it depends who is who is who has access for capacity at least at the beginning and who is going to obtain approval. So in terms of competition, I believe that in some of the markets, they may have some advantage for those that will have, at least for a short period of time or longer period of time, depends on the scenario, less competitive, maybe less players that will pay the market. And thereafter, it will be it will be very competitive because many companies are having these products and they will complete the market share.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

At the same time, the product will grow. So we are preparing ourselves for the scenario, which we believe that we have a chance for a relatively limited competition, but as well as the dataset for the scenario, high volume, low price, very competitive landscape, and we are gearing for both.

Tushar Manudhane
Research Analyst at Motilal Oswal

So, Sauran, if I may ask one more Sorry.

Operator

Sorry. May I request you to come back, please?

Tushar Manudhane
Research Analyst at Motilal Oswal

Okay.

Operator

Thank you. A request to all the participants, please restrict to one question from participants so the management can get all the queries from all the participants. Next question is from the line of Abdul Kadir from ICHN Securities. Please go ahead.

Abdulkader Puranwala
Assistant Vice President at ICICI Securities

Yeah.

Abdulkader Puranwala
Assistant Vice President at ICICI Securities

Hi, sir. Thank you for the opportunity. So my first question is on your India business where you talked about 6% growth excluding the vaccine business. So so how should we see this portfolio ramp up happening next year? Any areas where you think, you know, the growth was a little lower this this year?

Abdulkader Puranwala
Assistant Vice President at ICICI Securities

And then next year, you know, how should we model this business for? So you're going to see similar growth overall and for India also next year.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

So we are planning to grow, this year, we grew 16%. And this kind of range of growth, you know, one to see also in FY '26. Indeed, we highlighted not to emphasize, but also we highlighted the the inorganic organic, but I want to highlight that most of our growth in India will be inorganic.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

We are licensing products. We are requiring products. We are introducing innovation so that it could not be by stressing the necessarily only the big brands, although and I will say this in a second, but primarily by producing products that have better standards of care. Having said that, most of our big brands from the past two are actually double digits. There are two areas in which we did not do as well.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

This is in cardiovascular as well as GI. And we have a mitigation also planned for those, primarily by adding more marketing resources as well as addressing the level of product and introduction of the life cycle management. So overall, between new products, innovation, big brands, dealing with those big brands is not well. We are we believe that we'll have a high level high double digit growth in the year next year.

Abdulkader Puranwala
Assistant Vice President at ICICI Securities

Got it.

Abdulkader Puranwala
Assistant Vice President at ICICI Securities

And, sir, my next question is with regards to the, you know, the recent updates coming from The US in terms of, you know, certain concession on the regulatory front to being offered by The US agencies as well as they're talking about, you know, increasing the intensity of the price inspections for the plant sales out in India and China. So so, you know, I would love to hear your take on, you know, these developments coming from The US market.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

Yep. So it's not new. Just this year, the inspection that we had in CTO three and CTO 6 were an in house inspection.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

Our facilities are ready for it, and this was always the guideline. In The United States, for years, and they're signing out. So all of our facilities are ready for this. This actually is the guidelines for a while. And this will require people that are not ready for that, the many to upgrade their systems, but we are ready for it.

Operator

Thank you. A request to all the participants, please restrict to one question per participant, and rejoin the queue for a follow-up question. Next question is from now Sudipadra from Philip Capital. Please go ahead.

Surya Patra
Vice President at Phillip Capital Inc.

Yeah.

Surya Patra
Vice President at Phillip Capital Inc.

Thanks for the opportunity, sir. My first question is on the R and D spend front. What we have seen in the last two year period, sir, there is a kind of a back to back around 20% kind of a growth annually on the R and D spend front that we have witnessed. So could you give some visibility about the kind of work that we have done on the pipeline buildup front? And likely investment on those funds on the r and d side going ahead and what buildup that you would have created so far as the future pipeline or the go to growth pipeline for us?

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

So here, suppose the R and D investments are have been Ukrainian biosimilars, like, let us say, abataceptase in Phase III, suddenly the investments are high. And then in case of our generics, we are continuously focusing on all the GLP-one. I think that these are all the complex molecules and requires a lot of investment. And it is also, as we have spoken, this about a set once we highlight the revenue starting calendar 02/1927 or somewhere. So you will just see the revenues from all the efforts what we are doing now, suddenly a little later.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

It is not very far up, I think, but definitely, in the coming years, I'm not gonna see some of the products, I don't know, will start paying up the revenue.

Surya Patra
Vice President at Phillip Capital Inc.

Okay. On the conflict Alright. In front of Sudhir.

Operator

Can I request you to come back, please?

Operator

Thank you. A kind request to all the participants, please restrict to one question per participant. Next question is from the line of Sashank Kumar Sashankrishna Kumar from MK Global. Please go ahead.

Shashank Krishnakumar
Senior Research Analyst at Emkay Global Financial Services Ltd

Hi.

Shashank Krishnakumar
Senior Research Analyst at Emkay Global Financial Services Ltd

Thanks for taking my question. Just wanted to check with respect to Revlimid, given the import alert that has been issued to WhiteHat's facility. Could you see any meaningful benefit particularly first half this year? Or is it largely a nonevent given that there are volume restrictions at least?

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

I don't think there will be any investment.

Shashank Krishnakumar
Senior Research Analyst at Emkay Global Financial Services Ltd

Okay.

Operator

Thank you. Next question is from line of Srikanth from. Please go ahead.

Shrikant Akolkar
VP - Institutional Equity Research at Nuvama group

Hi.

Shrikant Akolkar
VP - Institutional Equity Research at Nuvama group

Thanks for the opportunity. In the Canadian semi retired market, there are four players that were fine. If you can talk about our approval timelines, and do you think that all the four players would be there in the Canadian market when the opportunity opens up? I obviously don't know who will come or who will not, but we are planning to bid there at the at the day that the market will be up. And and the approval time line for us?

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

Yeah. Approval time line will actually to be a little bit before the date. We'll come out at the end of the this calendar.

Shrikant Akolkar
VP - Institutional Equity Research at Nuvama group

Okay. Thank you.

Operator

Thank you. Ladies and gentlemen, we'll take the last question from the line of Christian Dusaha from Quantum Mutual Fund. Please go ahead.

Krishnendu Saha
Vice President - Equity Research at Quantum Asset Management Company

Yeah. Hi. Can you hear

Krishnendu Saha
Vice President - Equity Research at Quantum Asset Management Company

me?

Operator

Yes.

Krishnendu Saha
Vice President - Equity Research at Quantum Asset Management Company

Hello. Can you hear me? Yeah.

Krishnendu Saha
Vice President - Equity Research at Quantum Asset Management Company

Yeah. Just quickly, when I look at the European European revenue for us, it sounds like you you can have grown up any faster. Is it because we start selling out there and the entire number which you give out, 1,200 crores, can I double that just to get the whole revenue for the full year? And the last question on revenue, when we speak to Nako, they say that June, September could be a better quarter for us in f x twenty six. Is it is it is it does it hold true for us also?

Krishnendu Saha
Vice President - Equity Research at Quantum Asset Management Company

That's it. Thanks.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

So, you know, I cannot share numbers or guidance on the on the regular med and all. So I I can only say, like, we always do that it's going to stay meaningful product for us. As for The UK, I'm not sure I got the question.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

It's just primarily due to relatively high level of launch of new product, plus we launched the bivazimumab also in United States yeah. Sorry. In United Kingdom. So the combination of both allowed us to go in The UK.

Krishnendu Saha
Vice President - Equity Research at Quantum Asset Management Company

And and the entire the run rate of 1,201,200 crores, is it that if we simply double that, is what the number we get to the full year?

Krishnendu Saha
Vice President - Equity Research at Quantum Asset Management Company

So if I ever '25 to 26?

Richa Periwal
Head of Investor Relations and Analytics at Dr. Reddy’s Laboratories

Could you just repeat your question?

Krishnendu Saha
Vice President - Equity Research at Quantum Asset Management Company

If I the the number of n c r which we and recording which we have for the h two, there are $121,200 crores. So if I double that, is it the number which I get for the full year or I put it up close?

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

Is it supposed to Certainly, 0%.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

Zero %, that will be the range.

Krishnendu Saha
Vice President - Equity Research at Quantum Asset Management Company

And when we start selling in The UK all by itself, we'll see next year.

Krishnendu Saha
Vice President - Equity Research at Quantum Asset Management Company

Is it?

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

Yeah. Yeah. Currently, also, we are selling in UK, and then going forward also, we'll continue to sell in The UK. But when what are the numbers we are reporting for UK, it's also consumer.

Krishnendu Saha
Vice President - Equity Research at Quantum Asset Management Company

Right. And if I just can squeeze the last thing. On the GLP last launch, like, which happened right after they were we could see that as comment. Do you think the scenario could be the same when it happens for Shema when it launched in The US? I think the BioPoint has gotten approval or they've launched.

Krishnendu Saha
Vice President - Equity Research at Quantum Asset Management Company

So is it possible that the market will still be there are a lot of buyers, but you could see the cookies placed last week further or it would be, what, large players number of players out there?

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

For which product you're talking about? Simadrutinib in The US will be in 2033. Sorry? Ziraglutide?

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

Ziraglutide, Elixoza or Saxenda?

Krishnendu Saha
Vice President - Equity Research at Quantum Asset Management Company

And now I have a question from you. Hey. So I understand, Harish, the numb the number of players in Rikoso are very less even after they were coming and now I think it's gone. Do you think the same amount of players because the large number of players for CEMA in Canada and India and all, do you think everybody will get an approval and there will be a large number of players or, like, with the GNC within The U.

Krishnendu Saha
Vice President - Equity Research at Quantum Asset Management Company

Right now because of the only people players, how how do you think the landscape will be on the competition part? That's what I'm trying to understand.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

We believe that the landscape of Cimandlotar will be very competitive here. It could be a situation at time of launch or around the time of launch. There will be people that may get later the approval or have later access to the supply chain, and so it will evolve.

Erez Israeli
CEO & Member of the Management Council at Dr. Reddy’s Laboratories

And those players that may come before and be there on day one may gain kind of first launch advantage. But overall, it's going to be, we believe, a very competitive market, and we are preparing ourselves in terms of cost, supply to high volume, low cost type of a product over time.

Operator

Thank you for listening, Lu. Participants, we'll take one last question from the line of Ryan McCarthy from Nomura. Please go ahead.

Operator

May I request to unmute your line and proceed with your question?

Saion Mukherjee
Head of Equity Research at Nomura Financial Advisory and Securities

Yes. Hello? Hello? Yeah.

Saion Mukherjee
Head of Equity Research at Nomura Financial Advisory and Securities

Am I audible?

Operator

Yes. We can hear you now.

Saion Mukherjee
Head of Equity Research at Nomura Financial Advisory and Securities

Yes. Sorry.

M V Narasimham
CFO & Member of the Management Council at Dr. Reddy’s Laboratories

I Disconnected.

Operator

Sir, the line for the participant dropped. With this, I now hand the conference over to miss for closing comments.

Richa Periwal
Head of Investor Relations and Analytics at Dr. Reddy’s Laboratories

We appreciate you joining us for this evening's call. If you have any further questions or require clarification, please feel free to reach out to the Investor Relations team. Once again, thank you on behalf of Doctor. Laboratories Limited.

Operator

Thank you very much. On behalf of Doctor. Reddy's Laboratories Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.

Analysts
    • Richa Periwal
      Head of Investor Relations and Analytics at Dr. Reddy’s Laboratories
    • M V Narasimham
      CFO & Member of the Management Council at Dr. Reddy’s Laboratories
    • Erez Israeli
      CEO & Member of the Management Council at Dr. Reddy’s Laboratories
    • Neha Manpuria
      Senior Analyst at Bank of America
    • Kunal Dhamesha
      Research Analyst at Macquarie Group
    • Madhav Marda
      Investment Analyst at Fidelity
    • Amey Chalke
      Analyst at JM Financial Ltd
    • Bino Pathiparampil
      Head of Equity Research at Elara Capital
    • Krishnendu Saha
      Vice President - Equity Research at Quantum Asset Management Company
    • Tushar Manudhane
      Research Analyst at Motilal Oswal
    • Abdulkader Puranwala
      Assistant Vice President at ICICI Securities
    • Surya Patra
      Vice President at Phillip Capital Inc.
    • Shashank Krishnakumar
      Senior Research Analyst at Emkay Global Financial Services Ltd
    • Shrikant Akolkar
      VP - Institutional Equity Research at Nuvama group
    • Saion Mukherjee
      Head of Equity Research at Nomura Financial Advisory and Securities
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Key Takeaways

  • Record FY25 performance: Consolidated revenue of US$3.8 billion (+17% YoY) and first-time EBITDA above US$1 billion (+11% YoY).
  • Strong Q4 showing: Revenue of ₹8,506 crore (US$996 million, +20% YoY) and EBITDA of ₹2,475 crore (US$490 million, +32% YoY), with a 29.1% margin.
  • Consumer healthcare acquisition: Completed the Signicotin NRT business deal, with UK integration done and Nordic rollout on track.
  • R&D acceleration: R&D spend rose 20% to ₹2,038 crore, funding a pipeline of small molecules, biosimilars, complex generics and a GLP-1 semaglutide launch expected in CY ’26.
  • Biosimilars partnerships: Secured U.S./EU rights for a daratumumab biosimilar, signed SEA deals for ustekinumab and golimumab, and saw FDA acceptance of a bevacizumab biosimilar filing.
AI Generated. May Contain Errors.
Earnings Conference Call
Dr. Reddy's Laboratories Q4 24/25
00:00 / 00:00

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