Dr. Reddy's Laboratories (NYSE:RDY) Posts Quarterly Earnings Results, Beats Estimates By $0.03 EPS

Key Points

• Dr. Reddy’s beat quarterly estimates: EPS was $0.12 versus the $0.09 consensus, while revenue reached $903.89 million compared with expectations of $892.16 million.
• Revenue fell 1.5% year over year to INR 8,671 crore, pressured by lower North American lenalidomide sales and rising costs. However, the underlying business excluding lenalidomide grew at a double-digit rate, with strong performances in India and emerging markets.
• Semaglutide supply is expected to resume in November 2026, pending validation, with management maintaining its volume outlook and targeting a potential 12–15 million pen run rate over the following year.

Dr. Reddy's Laboratories (NYSE:RDY - Get Free Report) posted its quarterly earnings results on Friday. The company reported $0.12 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.09 by $0.03, FiscalAI reports. The business had revenue of $903.89 million for the quarter, compared to analysts' expectations of $892.16 million. Dr. Reddy's Laboratories had a return on equity of 9.49% and a net margin of 10.15%.

Here are the key takeaways from Dr. Reddy's Laboratories' conference call:

• Revenue declined 1.5% year over year to INR 8,671 crore, primarily reflecting lower North American lenalidomide sales. EBITDA margin fell to 20.6% year over year, while higher freight, personnel and raw-material costs also weighed on profitability.
• The underlying business excluding lenalidomide delivered double-digit growth, supported by new product launches and productivity measures. Management expects gross margins to remain within the 50%-55% range and reiterated its ambition to move EBITDA margins toward 25% over time.
• Semaglutide supply is expected to resume in November 2026, subject to completion of validation, with API already shipped to the fill-and-finish partner. Management remains confident in its previously indicated 6-7 million device volume for the year and is preparing for a potential 12-15 million pen run rate over the following 12 months.
• India and emerging markets remained strong, growing 17% and 24% year over year, respectively, while North America’s base business also posted double-digit growth excluding lenalidomide. The company launched multiple products, including sugammadex in the U.S., and continues to expand its biosimilar and complex-generic pipeline.
• Abatacept remains targeted for U.S. approval by December 22, 2026, although management acknowledged the possibility of a CRL; commercial ramp-up may take roughly six months after approval. Europe and PSAI remained weak due to price erosion, operating-model changes and lower API volumes, although the CDMO business grew and management expects it to reach two to three times current revenue in three to four years.

Dr. Reddy's Laboratories Price Performance

Shares of Dr. Reddy's Laboratories stock traded up $0.00 on Friday, reaching $13.23. 1,775,415 shares of the stock were exchanged, compared to its average volume of 2,522,937. The company has a debt-to-equity ratio of 0.03, a quick ratio of 1.39 and a current ratio of 1.90. The firm has a market cap of $11.04 billion, a PE ratio of 30.03, a P/E/G ratio of 2.75 and a beta of 0.29. The firm's 50 day moving average is $12.34 and its 200-day moving average is $12.91. Dr. Reddy's Laboratories has a one year low of $11.36 and a one year high of $15.67.

Wall Street Analysts Forecast Growth

RDY has been the subject of a number of recent research reports. Citigroup raised shares of Dr. Reddy's Laboratories from a "sell" rating to a "buy" rating and boosted their price target for the stock from $1,040.00 to $1,450.00 in a research note on Tuesday, September 29th. Weiss Ratings reaffirmed a "hold (c-)" rating on shares of Dr. Reddy's Laboratories in a research note on Wednesday. Wall Street Zen upgraded Dr. Reddy's Laboratories from a "sell" rating to a "hold" rating in a report on Saturday, October 17th. Finally, BNP Paribas Exane raised Dr. Reddy's Laboratories to an "outperform" rating and set a $14.80 target price for the company in a research note on Monday, October 12th. Two equities research analysts have rated the stock with a Buy rating, one has assigned a Hold rating and one has issued a Sell rating to the company's stock. Based on data from MarketBeat, the stock presently has an average rating of "Hold" and a consensus price target of $732.40.

Dr. Reddy's Laboratories Company Profile

Dr. Reddy's Laboratories Limited is a global pharmaceutical company headquartered in Hyderabad, India. Founded in 1984 by Dr. Kallam Anji Reddy, the company develops, manufactures and markets medicines intended to make healthcare more accessible.

Its business includes generic prescription drugs, active pharmaceutical ingredients, biosimilars, specialty products and over-the-counter consumer healthcare products. Dr. Reddy's offers medicines across therapeutic areas such as cardiovascular care, diabetes, oncology, gastrointestinal health, pain management and dermatology.

The company serves patients and healthcare providers in India, the United States, Europe and a range of other international markets, including emerging markets.

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