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- **Revenue Growth**: 10% YoY driven by consumer health and emerging markets.
- **Biosimilar Momentum**: Abatacept BLA submission by end-2025; semaglutide facing India patent challenge.
- **Financial Strength**: Net cash surplus of USD 310M, free cash flow of USD 118M.
- **Strategic Focus**: Integration of NRT business, India expansion, and 12M semaglutide pens for global markets.
- **Risks**: U.S. generics price erosion, regulatory challenges for biosimilars.

**【CEO Summary Section】**
- Q2 FY '26 revenue grew 10% YoY to INR 8,805 crore (USD 992M), driven by consumer health and emerging markets.
- U.S. generics faced price erosion (-16% YoY), but biosimilars (abatacept, semaglutide) show promise.
- EBITDA margin 26.7%, ROCE 22%, with focus on innovation and sustainability.
- Strategic moves: NRT business integration, India expansion (Stugeron acquisition), and 12M semaglutide pens for global markets.

**【CFO Financial Commentary】**
- Gross profit margin 54.7% (-492 bps YoY) due to Lenalidomide decline and price erosion.
- SG&A up 15% YoY to INR 2,644 crore (USD 298M) for consumer health and branded generics.
- R&D spend down 15% YoY to INR 620 crore (USD 70M), focused on biosimilars.
- Free cash flow INR 1,046 crore (USD 118M), net cash surplus INR 2,751 crore (USD 310M).

**【Q&A Highlights】**
- U.S. generics: Price erosion expected to stabilize; biosimilars (abatacept, semaglutide) to offset.
- Semaglutide: India patent challenge ongoing; launches in Canada, Brazil, Turkey.
- Abatacept: BLA submission by end-2025; CMO for U.S. manufacturing to mitigate tariff risk.
- India: 13% YoY growth via innovation (PCAB, Colozo) and acquisitions.
- Margins: Target 25% EBITDA by FY '27 with biosimilar launches and cost control.

Dr. Reddy's Laboratories Limited (RDY) Q2 2026 Earnings Call Transcript

- **Revenue Resilience**: 11% YoY growth despite US generics decline, driven by India (11%), Europe (124% YoY), and consumer health.
- **Strategic Investments**: $341M net cash surplus supporting NRT integration, biosimilar collaborations, and GLP-1 pipeline expansion.
- **Pipeline Momentum**: Semaglutide BLA submission in Q4 2025, abatacept Phase III readout in Nov 2025, and 12M pens capacity for FY '27.
- **Cost Efficiency**: Targeting 500-600 bps cost savings through reduced discretionary spending, with R&D flexibility (6-7% of sales).
- **Regulatory Focus**: Timely responses to USFDA inspection observations; India business outpacing market growth with innovative products.

**【CFO Financial Commentary】**
- **Revenue Growth**: Consolidated revenue of USD 997 million (INR 8,545 crore) reflects 11% year-over-year (YoY) growth, driven by consumer healthcare and European generics. Sequentially, revenue remained flat.
- **Gross Profit Margin**: 56.9% (down 350 bps YoY) due to price erosion in generics (e.g., lenalidomide) and lower operating leverage. Global Generics margin was 60.9%, while PSAI margin dropped to 13.2% due to seasonal weakness.
- **SG&A Expenses**: USD 299 million (INR 2,565 crore), up 13% YoY, primarily from investments in consumer health (NRT and Nestlé JV). SG&A as % of sales rose to 30% (vs. 29.6% YoY).
- **R&D Spend**: USD 73 million (INR 624 crore), flat YoY but down 14% sequentially. Full-year R&D target is 7-7.5% of sales.
- **EBITDA**: USD 266 million (INR 2,278 crore), +5% YoY but -8% QoQ. EBITDA margin 26.7% (down 149 bps YoY).
- **Free Cash Flow**: USD 51 million (INR 433 crore). Net cash surplus of USD 341 million (INR 2,922 crore).

**【CEO Business Highlights】**
- **Revenue Performance**: 11% YoY growth, with double-digit growth in India (11%) and emerging markets (10%). US generics declined 17% YoY due to lenalidomide price erosion.
- **Strategic Initiatives**: 
  - Biosimilar collaboration with Alvotech for pembrolizumab.
  - NRT integration progressing in UK, Nordics, Canada, Australia.
  - Semaglutide API production ramping up; targeting 12 million pens in FY '27.
- **Pipeline Progress**: 
  - Semaglutide BLA submission planned for Q4 2025, with launch in Canada by Q1 2026.
  - Abatacept Phase III trial readout expected in Nov 2025, BLA submission in Q1 2027.
- **Regulatory Updates**: 
  - USFDA inspections of API facilities (Middleburg, CTO-5) and formulation site (FTO 11) resulted in Form 483 observations; timely responses submitted.
  - India business ranked 10th in pharma market, outpacing IPM growth (9.2% vs. 8%).

**【Q&A Highlights】**
- **US Generics Outlook**: Base business expected for flat to single-digit growth, with 20+ new product launches in FY '26. Lenalidomide sales to decline post Q2 2025.
- **Semaglutide Capacity**: FY '27 capacity of 12 million pens (single-use) via partner; targeting first launches in Canada and key emerging markets.
- **Cost Optimization**: 500-600 bps of discretionary cost savings (e.g., travel, consulting) possible, with R&D spend targeting 6-7% of sales.
- **Biosimilar Strategy**: Focused on high-demand molecules like abatacept and pembrolizumab, with Phase III trials progressing on schedule.
- **India Growth**: Double-digit expansion driven by innovative products (e.g., Beyfortus RSV vaccine), with field force of 10,000+ reps.


Dr. Reddy's Laboratories Limited (RDY) Q1 2026 Earnings Call Transcript

- **Record Financials**: FY2025 revenue ($3.8B, +17%) and EBITDA ($1.1B, +11%) driven by acquisitions and organic growth
- **Key Growth Drivers**: 
  - 20% Q4 revenue growth, 32% EBITDA growth
  - NRT acquisition contributing $1.2B annually
  - India generics 16% YoY growth, top 10 market share
- **Future Outlook**: 
  - FY2026: Double-digit revenue growth, EBITDA >25%
  - Semaglutide launch targeting $1.8B Canada market
  - Abatacept Phase 3 on track for 2025 filing
- **Margin Resilience**: 
  - SG&A 28.3%, R&D 8.3% (stable investments)
  - Free cash flow $1.3B, net cash surplus $287M
- **Risks & Preparedness**: 
  - Tariff impact TBD, no U.S. manufacturing yet
  - Revlimid cliff mitigation via pipeline expansion

**【CEO Summary Section】**
- Dr. Reddy's reported FY2025 revenue of $3.8 billion (17% YoY growth) and EBITDA of $1.1 billion (11% YoY growth), driven by acquisitions and organic growth across generics, biosimilars, and consumer health.
- Key highlights include: 
  - 20% Q4 revenue growth ($996M) and 32% EBITDA growth ($290M) 
  - Biosimilar pipeline progress (e.g., daratumumab, ustekinumab partnerships)
  - NRT acquisition integration on track, contributing $1.2B annually
  - India generics business grew 16% YoY, maintaining top 10 market share
- FY2026 outlook: Double-digit revenue growth, EBITDA margin >25%, with focus on semaglutide, GLP-1, and oncology biosimilars

**【CFO Financial Commentary】**
- Q4 2025 Financials:
  - Revenue: $996M (20% YoY growth)
  - EBITDA: $290M (32% YoY growth, 29.1% margin)
  - Net Profit: $187M (22% YoY growth)
- Full Year 2025:
  - Revenue: $3.8B (17% YoY growth)
  - EBITDA: $1.1B (11% YoY growth)
  - R&D Spend: $320M (20% YoY growth)
  - Free Cash Flow: $1.3B
- Margins:
  - Gross Margin: 58.5% (stable vs FY2024)
  - SG&A: 28.3% (down 63bps YoY)
  - R&D as % of Revenue: 8.3%
- Key Drivers:
  - NRT acquisition contributed $1.2B annually
  - Cost control maintained despite 22% YoY SG&A growth
  - Divestment of Shreveport facility reduced overhead

**【Q&A Key Themes】**
1. Tariff Preparedness:
  - No U.S. manufacturing footprint yet, but exploring opportunities
  - Focus on maintaining supply continuity
  - Tariff impact TBD, but no willingness to absorb costs

2. Cost Structure & Margins:
  - FY2026: Target EBITDA margin >25% despite Revlimid cliff
  - SG&A ~28% of revenue, R&D ~8.5% (sustainable levels)
  - Productivity initiatives to offset Revlimid decline

3. Product Pipeline:
  - Semaglutide: Targeting Q4 2025 FDA filing, ~$1.8B Canada market
  - Abatacept: Phase 3 ongoing, ~$10B global market
  - GLP-1: Peptide infrastructure expansion underway

4. Market Dynamics:
  - U.S. generics: Low price erosion (single-digit), strong new product launches
  - Europe: 73% YoY growth ex-NRT, biosimilar launches planned
  - India: 16% YoY growth, focus on in-licensing innovation

Dr. Reddy's Laboratories Limited (RDY) Q4 2025 Earnings Call Transcript

- **Revenue Beat**: 16% YoY growth ($977M) driven by NRT acquisition, with underlying generics up 7.5% YoY.
- **Profitability**: 27.5% EBITDA margin, net profit up 2% YoY to $165M.
- **Strategic Wins**: First IO drug launch in India, biosimilar approvals (Rituximab), and 'A' MSCI ESG rating.
- **Growth Drivers**: Europe up 142% YoY (ex-NRT: 22%), India generics +40%, Russia +20% in constant currency.
- **Key Risks**: Price erosion in North America, temporary GI/cardio underperformance in India.

**【CFO Financial Highlights】**
- **Revenue Growth**: Q3 FY2025 revenue of $977M (₹8,359 crore), up 16% YoY, driven by NRT acquisition. Underlying growth (ex-NRT) was 7.5% YoY.
- **Gross Margin**: 59% (19bps YoY improvement), benefiting from product mix and manufacturing efficiency.
- **SG&A Spend**: $282M (₹2,412 crore), +19% YoY due to NRT integration and new business initiatives.
- **R&D Investment**: $78M (₹666 crore), 20% YoY growth focused on complex generics and biosimilars.
- **EBITDA**: $269M (₹2,298 crore), +9% YoY, margin 27.5% (down 176bps YoY).
- **Net Profit**: $165M (₹1,413 crore), +2% YoY, EPS of ₹16.94.
- **Cash Position**: $187M (₹1,603 crore) net surplus, with $83M CapEx.

**【CEO Business Overview】**
- **NRT Integration**: First quarter of NRT consolidation, with plans for phased integration post-April 2025. Q3 NRT PBT contribution: ₹124 crore.
- **Product Launches**: 13 new products globally, including Toripalimab (first IO drug in India) and Elobixibat.
- **Market Performance**: 
  - **North America**: Flat YoY due to price erosion, but 4 new product launches.
  - **Europe**: 142% YoY growth (ex-NRT: 22% YoY), driven by new launches.
  - **India**: 40% YoY growth (₹1,346 crore), despite 5% decline in core generics.
  - **Russia**: 20% YoY growth in constant currency.
- **Biosimilars**: Rituximab approved in UK, Denosumab filed in US/Europe. Abatacept Phase 1 completed.
- **ESG Milestones**: MSCI 'A' rating upgrade, inclusion in BGEI and Nifty 100 ESG indices.

**【Q&A Key Takeaways】**
- **India Business**: Cardiovascular and GI segments underperforming, but action plan to recover growth.
- **NRT Investment**: Will maintain 20%+ EBITDA margin while scaling capabilities.
- **Semaglutide Strategy**: Targeting 2026 launches in Canada, India, Brazil. API/device integration complete.
- **SG&A Management**: Committed to 25-28% EBITDA margin, with discretionary spend aligned to growth.
- **Abatacept Timeline**: FDA filing expected Dec 2025, launch target Q1 2027.
- **Russia Risk**: Hedged currency exposure, minimal impact on Q3 results.

Dr. Reddy's Laboratories Limited (RDY) Q3 2025 Earnings Call Transcript

Dr. Reddy's Laboratories Limited (RDY) Q4 2024 Earnings Call Transcript

- **Revenue beat expectations**: $775M Q2 revenue (+9% YoY, +21% QoQ) driven by U.S. generics and Russia recovery.
- **Gross margin rebound**: 69.1% (550bps YoY) from PLI incentives and product mix, offset by $100M COVID inventory provision.
- **Free cash flow strong**: $71M Q2, net cash surplus $159M, enabling R&D, CapEx, and M&A.
- **U.S. generics growth**: 38% YoY from lenalidomide launch, 7 new products introduced.
- **PSAI margin recovery**: 3.6% Q2, expect improvement with API volume pickup and cost leverage.
- **Strategic focus**: Invest cash in innovation pipeline, global expansion, and biosimilar collaborations.


**【CFO Financial Summary】**
- Q2 FY'23 revenue: $775M (9% YoY growth, 21% QoQ growth) driven by U.S. generics and Russia rebound.
- Gross margin: 69.1% (550bps YoY improvement) due to product mix, PLI incentives, and $100M COVID inventory provision.
- EBITDA: $37M (30.6% margin), PBT: $198M (27% YoY growth).
- Free cash flow: $71M, net cash surplus: $159M.

**【CEO Business Highlights】**
- U.S. generics: $351M (38% YoY growth) from lenalidomide launch and 7 new product introductions.
- Europe: $52M (10% YoY growth) with 10 new product launches.
- Emerging markets: $1.225B (6% YoY decline adjusted for COVID sales), Russia sales normalize at pre-pandemic levels.
- India: $1.15B (1% YoY growth) with MAT rank #10, focusing on core brands and divesting non-core assets.
- PCI business: $81M (29% YoY decline) due to lower customer pickups, expecting improvement with new launches.

**【Key Q&A Insights】**
- **Lenalidomide sales**: Volumes within settlement terms with innovator, expect continued contribution in coming quarters.
- **PSAI margins**: 3.6% due to COVID inventory provision and low sales base; expect improvement with API volume recovery.
- **Cash utilization**: Prioritize R&D pipeline, CapEx, and M&A opportunities in uncertain macro environment.
- **Injectables competition**: Higher barriers to entry, focus on global hospital channels for better margins.
- **Biosimilar collaboration**: Receive royalties from partner's Pitestream approval, no direct manufacturing involvement.


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