Dr. Reddy`s Laboratories Ltd. - ADR

Top-line & margin performance (overall picture) - Revenue: Consolidated revenues were ₹8.01k crore (US$905m), -1.5% YoY and +7.4% QoQ. - EBITDA margin: 20.6% for the quarter, +806 bps QoQ and slightly down -6 bps YoY. - Key driver of YoY margin decline: Lower North America lenalidomide sales (management explicitly cites lenalidomide as the main YoY drag on margins). - Gross margin improved vs prior quarter: Global Generics gross margin 56.2%; PSA 11.8%. Management attributes improvement mainly to product mix + new launches, plus expense discipline (no meaningful cost increase QoQ).

Semaglutide “reloading” is the major near-term focus (forecast & confidence) - Management expects to restart/“reload” semaglutide supplies by ~November 2026, subject to validation steps. - Confidence level: Erez said confidence is high because orders are in place and the core issue—scaling the API—has been resolved; what remains is validation at multiple stages (API process validation + drug-product validation at the fill-finish partner; takes ~3 weeks). - Regulatory/process separation: They emphasized the API scale-up issue is not a regulatory amendment problem—approval progress in already-started markets continues. - Commercial scope: Semaglutide generics are approved in ~10 countries currently, but management refers to expansion to ~89 markets overall (some approvals delayed due to sample needs from scale-up). - Investor takeaway / risk: If validation timing slips, sema volumes could be delayed—but management expects the November restart to proceed.

Segment highlights: where growth is coming from and where it isn’t - North America generics: US$264m, -29% YoY (again tied to lenalidomide), +12% QoQ. - Underlying “base business” ex-lenalidomide: delivered double-digit growth across North America, emerging markets, and India. - Emerging markets: ₹2,059 crore, +84% YoY and +12% QoQ (growth supported by new products/acquisitions + favorable FX). - India branded/franchise: ₹1.85k crore, +17.8% YoY (India positioning improving vs market; management cites IQVIA data). - Europe: €127m, -6% YoY / -3% QoQ due to generic price erosion and post-NRT integration operating model impacts; management expects improvement in the next quarter, but not “significant” full-year double-digit growth guidance. - PSA (API/services): US$88m, -19% YoY / -3% QoQ, mainly due to low API volume uptick.