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Dr Reddy’s Laboratories announced a net profit of Rs 1,392 crore for the first quarter of FY25, exceeding market expectations. Analysts had projected the pharmaceutical giant’s revenue at Rs 7,242 crore and net profit at Rs 1,351 crore for the April-June quarter.
For the same period last year, Dr Reddy’s recorded a net profit of Rs 1,402 crore. The current quarter’s net profit saw only a slight decline year-on-year, influenced by an increased effective tax rate of 26 per cent compared to 24 per cent in the base quarter.
Revenue for the quarter grew by approximately 14 per cent, reaching Rs 7,672.70 crore, up from Rs 6,738 crore in the corresponding quarter of the previous fiscal year. This robust growth in both the top line and bottom line exceeded the Street’s estimates of Rs 7,242 crore for revenue and Rs 1,351 crore for net profit.
The company attributed its revenue growth to a significant uptick in generics sales in North America and India. Global generics sales increased by 15 per cent year-on-year, driven primarily by higher volumes, new product launches, and the integration of a recently in-licensed vaccine portfolio in India. This growth was partially offset by price erosion in some markets.
However, Dr Reddy’s operating performance saw a slight contraction, with the EBITDA margin dropping to 28.2 per cent from 29 per cent in the same quarter last year. The decline in margin was largely due to increased research and development (R&D) expenses, which rose to 8.1 per cent of total revenue, up from 7.4 per cent in the previous year.
Despite the pressure on margins, the company’s performance reflects strong demand for its generic products and strategic moves to expand its product portfolio. The positive financial results underscore Dr. Reddy’s resilience and growth potential in the competitive pharmaceutical market.
As the company continues to navigate market dynamics, its focus on innovation and expansion remains pivotal in sustaining its growth trajectory.