Dr. Reddy's Q3 2025: Contradictions in India Growth, Biosimilars, and U.S. Performance

Revenue Growth and NRT Acquisition:
- Dr. Reddy's Laboratories reported record revenue of Rs. 8,359 crores ($977 million) for Q3 FY 2025, representing a 16% increase year-over-year and 4% decline quarter-over-quarter.
- The growth was driven by the integration of the newly acquired Nicotine Replacement Therapy (NRT) business, which contributed revenues of Rs. 6,605 crores.

Investment in R&D and Product Launches:
- The company increased its R&D spend to Rs. 666 crores ($78 million), representing a 20% increase year-over-year and a 8% decline quarter-over-quarter.
- This investment was primarily to develop complex generics and biosimilars, as well as the launch of new products like Toripalimab and Elobixibat, reflecting a strategic focus on innovation and future growth drivers.

Operating Margins and Profitability:
- Dr. Reddy's reported an EBITDA of Rs. 2,298 crores ($269 million), a 9% increase year-over-year but flat quarter-over-quarter.
- The company maintained a 27.5% EBITDA margin, with a decrease of 176 basis points year-over-year, impacted by price erosion in certain markets and higher SG&A costs.

North America and European Segment Performance:
- Revenue in the North America generic business was $401 million, showing a flat year-over-year growth but a 10% sequential decline, mainly due to price erosion and lower sales of certain products.
- In Europe, revenues increased to $134 million, up 142% year-over-year and 114% quarter-over-quarter, driven by new product launches and acquisitions in the NRT segment.