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Dr. Reddy's Q4 Earnings and Revenues Miss Estimates, Stock Down
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Key Takeaways
Dr. Reddy's Q4 revenue fell 12% as North America generics sales dropped 51% year over year.
RDY launched Obeda, India's first approved generic semaglutide, after Ozempic patent expiry.
Dr. Reddy's FDA filing for an Orencia biosimilar marks a key step in its biosimilars push.
Dr. Reddy's Laboratories Limited (RDY - Free Report) reported fourth-quarter fiscal 2026 adjusted earnings of 6 cents per American Depositary Share (ADS), which missed the Zacks Consensus Estimate of 9 cents. The company reported earnings of 18 cents per ADS in the year-ago quarter.
Revenues declined 12% year over year to $801 million, missing the Zacks Consensus Estimate of $866 million, primarily due to a year-over-year decline in global generics revenues.
Dr. Reddy’s shares lost 5.2% on Tuesday, likely because the dismal fiscal fourth-quarter results disappointed investors.
RDY’s Q4 Results in Detail
Dr. Reddy’s reported revenues under three segments — Global Generics, Pharmaceutical Services & Active Ingredients (PSAI) and Others.
Global Generics revenues totaled INR 65.8 billion, down 13% year over year. The decrease was mainly due to lower North America generics sales, partly offset by broad-based growth across key markets supported by favorable foreign exchange movements.
Dr. Reddy’s launched seven new products in North America during the reported quarter. However, revenues in the North America segment declined 51%, largely due to lower lenalidomide sales and a one-time Shelf Stock Adjustment (SSA) of INR 4.5 billion related to the product.
As of March 31, 2026, a total of 77 generic filings were pending approval from the FDA, comprising 75 abbreviated new drug applications (ANDAs) and two new drug applications. Of these 75 ANDAs, 43 are Para IVs.
Dr. Reddy’s shares have lost 11.3% year to date against the industry’s 1.4% growth.
Image Source: Zacks Investment Research
PSAI revenues totaled INR 9.12 billion, representing a 5% year-over-year decline, due to lower volume uptake in the active pharmaceutical ingredient (API) business.
Revenues in the Others segment totaled INR 0.24 billion, up 79% on a year-over-year basis.
Gross margin declined 1,074 basis points year over year to 44.8% in the fourth quarter of fiscal 2026. This was mainly due to lower lenalidomide sales, price erosion in the North America and Europe Generics businesses and the one-time SSA impact.
Research and development (R&D) expenses of $58 million were down 25% year over year due to lower development spending in biosimilars following the completion of a significant portion of the investments related to Bristol Myers’ (BMY - Free Report) Orencia (abatacept). R&D efforts continue to be focused on complex generics, including peptides and biosimilars. The quarter’s spend was also impacted by charges related to certain discontinued CAR-T assets.
Selling, general and administrative expenses totaled $296 million, up 15% year over year. The rise was primarily driven by targeted investments in Dr. Reddy’s branded franchises, including the acquired consumer healthcare business in NRT and branded generics. The rise was also influenced by a potential INR 1.1 billion VAT liability in one of RDY’s subsidiaries in the fourth quarter.
RDY's Fiscal 2026 Results
Revenues in fiscal 2026 came in at $3.58 billion, up 3% from the $3.47 billion recorded in fiscal 2025. Adjusted earnings per share totaled 59 cents in fiscal 2026 compared with 79 cents in fiscal 2025.
Key Update From RDY
During the reported quarter, Dr. Reddy’s acquired the trademarks and related assets of hormone replacement therapy brands Progynova and Cyclo-Progynova in India from Mercury Pharma Group. The deal marks Dr. Reddy’s entry into the hormone replacement therapy segment and strengthens its gynecology portfolio in the country. Progynova, an estradiol valerate-based therapy, is used to treat estrogen deficiency symptoms and help prevent postmenopausal osteoporosis, while Cyclo-Progynova combines estradiol valerate and norgestrel for hormone replacement treatment.
Progynova currently leads the estradiol-represented pharmaceutical market in India and generated sales of around INR 100 crore in the 12 months ended December 2025, according to IQVIA data. Per Dr. Reddy’s, the acquisition would help expand the reach of the brands through its existing market access and distribution network while reinforcing its focus on innovation and patient care in women’s health.
RDY’s 351(k) biologics license application (BLA) for DRL_AB, a proposed interchangeable biosimilar to Bristol Myers’ Orencia IV infusion therapy, has also been accepted by the FDA for review. The BLA is supported by analytical, pharmacokinetic and clinical data aimed at demonstrating similarity to the reference biologic. Dr. Reddy’s stated that it is the first company to submit a BLA for a biosimilar of BMY’s Orencia in the United States.
If approved, DRL_AB would be used to treat adults with moderate-to-severe active rheumatoid arthritis and psoriatic arthritis, as well as children aged six years and older with polyarticular juvenile idiopathic arthritis. Per RDY, its phase I study achieved pharmacokinetic similarity with comparable safety and immunogenicity profiles to Orencia, while a pivotal phase III efficacy and safety study is ongoing. The filing marks another step in Dr. Reddy’s expansion in the biosimilars segment and its efforts to develop lower-cost biologic treatment alternatives.
Dr. Reddy's Laboratories Ltd Price, Consensus and EPS Surprise
In late March, Dr. Reddy’s launched Obeda, India’s first regulatory-approved generic semaglutide injection, marking its entry into the GLP-1 receptor agonist therapy market following the patent expiry of Novo Nordisk’s (NVO - Free Report) Ozempic. The once-weekly injectable therapy for type II diabetes will be available in pre-filled disposable pen formats in 2 mg and 4 mg strengths at a monthly cost of INR 4,200. Dr. Reddy’s said the launch positions it for a day-one entry into the fast-growing GLP-1 market, where Novo Nordisk has established a dominant presence globally through Ozempic and other semaglutide-based therapies.
Per RDY, Obeda demonstrated non-inferior efficacy and a similar safety profile to NVO’s Ozempic in a phase III clinical study involving 312 participants. Dr. Reddy’s also highlighted that the product’s active pharmaceutical ingredient and formulation were developed entirely in-house, underscoring its capabilities in peptide science and complex drug manufacturing as it expands its diabetes and obesity portfolio. Dr. Reddy’s plans to introduce generic semaglutide in multiple international markets, subject to regulatory approvals, as part of its broader GLP-1 strategy to compete in the rapidly expanding metabolic disease segment currently led by Novo Nordisk.
RDY's Zacks Rank & A Stock to Consider
Dr. Reddy’s carries a Zacks Rank #4 (Sell) at present.
Over the past 60 days, estimates for Amarin’s 2026 loss per share have narrowed from $7.01 to $6.36. Over the same period, loss per share estimates for 2027 have also narrowed from $5.50 to $4.64. AMRN shares have risen 7.1% year to date.
Amarin’s earnings beat estimates in three of the trailing four quarters and missed in the remaining one, with the average surprise being 50.02%.
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Dr. Reddy's Q4 Earnings and Revenues Miss Estimates, Stock Down
Key Takeaways
Dr. Reddy's Laboratories Limited (RDY - Free Report) reported fourth-quarter fiscal 2026 adjusted earnings of 6 cents per American Depositary Share (ADS), which missed the Zacks Consensus Estimate of 9 cents. The company reported earnings of 18 cents per ADS in the year-ago quarter.
Revenues declined 12% year over year to $801 million, missing the Zacks Consensus Estimate of $866 million, primarily due to a year-over-year decline in global generics revenues.
Dr. Reddy’s shares lost 5.2% on Tuesday, likely because the dismal fiscal fourth-quarter results disappointed investors.
RDY’s Q4 Results in Detail
Dr. Reddy’s reported revenues under three segments — Global Generics, Pharmaceutical Services & Active Ingredients (PSAI) and Others.
Global Generics revenues totaled INR 65.8 billion, down 13% year over year. The decrease was mainly due to lower North America generics sales, partly offset by broad-based growth across key markets supported by favorable foreign exchange movements.
Dr. Reddy’s launched seven new products in North America during the reported quarter. However, revenues in the North America segment declined 51%, largely due to lower lenalidomide sales and a one-time Shelf Stock Adjustment (SSA) of INR 4.5 billion related to the product.
As of March 31, 2026, a total of 77 generic filings were pending approval from the FDA, comprising 75 abbreviated new drug applications (ANDAs) and two new drug applications. Of these 75 ANDAs, 43 are Para IVs.
Dr. Reddy’s shares have lost 11.3% year to date against the industry’s 1.4% growth.
Image Source: Zacks Investment Research
PSAI revenues totaled INR 9.12 billion, representing a 5% year-over-year decline, due to lower volume uptake in the active pharmaceutical ingredient (API) business.
Revenues in the Others segment totaled INR 0.24 billion, up 79% on a year-over-year basis.
Gross margin declined 1,074 basis points year over year to 44.8% in the fourth quarter of fiscal 2026. This was mainly due to lower lenalidomide sales, price erosion in the North America and Europe Generics businesses and the one-time SSA impact.
Research and development (R&D) expenses of $58 million were down 25% year over year due to lower development spending in biosimilars following the completion of a significant portion of the investments related to Bristol Myers’ (BMY - Free Report) Orencia (abatacept). R&D efforts continue to be focused on complex generics, including peptides and biosimilars. The quarter’s spend was also impacted by charges related to certain discontinued CAR-T assets.
Selling, general and administrative expenses totaled $296 million, up 15% year over year. The rise was primarily driven by targeted investments in Dr. Reddy’s branded franchises, including the acquired consumer healthcare business in NRT and branded generics. The rise was also influenced by a potential INR 1.1 billion VAT liability in one of RDY’s subsidiaries in the fourth quarter.
RDY's Fiscal 2026 Results
Revenues in fiscal 2026 came in at $3.58 billion, up 3% from the $3.47 billion recorded in fiscal 2025. Adjusted earnings per share totaled 59 cents in fiscal 2026 compared with 79 cents in fiscal 2025.
Key Update From RDY
During the reported quarter, Dr. Reddy’s acquired the trademarks and related assets of hormone replacement therapy brands Progynova and Cyclo-Progynova in India from Mercury Pharma Group. The deal marks Dr. Reddy’s entry into the hormone replacement therapy segment and strengthens its gynecology portfolio in the country. Progynova, an estradiol valerate-based therapy, is used to treat estrogen deficiency symptoms and help prevent postmenopausal osteoporosis, while Cyclo-Progynova combines estradiol valerate and norgestrel for hormone replacement treatment.
Progynova currently leads the estradiol-represented pharmaceutical market in India and generated sales of around INR 100 crore in the 12 months ended December 2025, according to IQVIA data. Per Dr. Reddy’s, the acquisition would help expand the reach of the brands through its existing market access and distribution network while reinforcing its focus on innovation and patient care in women’s health.
RDY’s 351(k) biologics license application (BLA) for DRL_AB, a proposed interchangeable biosimilar to Bristol Myers’ Orencia IV infusion therapy, has also been accepted by the FDA for review. The BLA is supported by analytical, pharmacokinetic and clinical data aimed at demonstrating similarity to the reference biologic. Dr. Reddy’s stated that it is the first company to submit a BLA for a biosimilar of BMY’s Orencia in the United States.
If approved, DRL_AB would be used to treat adults with moderate-to-severe active rheumatoid arthritis and psoriatic arthritis, as well as children aged six years and older with polyarticular juvenile idiopathic arthritis. Per RDY, its phase I study achieved pharmacokinetic similarity with comparable safety and immunogenicity profiles to Orencia, while a pivotal phase III efficacy and safety study is ongoing. The filing marks another step in Dr. Reddy’s expansion in the biosimilars segment and its efforts to develop lower-cost biologic treatment alternatives.
Dr. Reddy's Laboratories Ltd Price, Consensus and EPS Surprise
Dr. Reddy's Laboratories Ltd price-consensus-eps-surprise-chart | Dr. Reddy's Laboratories Ltd Quote
In late March, Dr. Reddy’s launched Obeda, India’s first regulatory-approved generic semaglutide injection, marking its entry into the GLP-1 receptor agonist therapy market following the patent expiry of Novo Nordisk’s (NVO - Free Report) Ozempic. The once-weekly injectable therapy for type II diabetes will be available in pre-filled disposable pen formats in 2 mg and 4 mg strengths at a monthly cost of INR 4,200. Dr. Reddy’s said the launch positions it for a day-one entry into the fast-growing GLP-1 market, where Novo Nordisk has established a dominant presence globally through Ozempic and other semaglutide-based therapies.
Per RDY, Obeda demonstrated non-inferior efficacy and a similar safety profile to NVO’s Ozempic in a phase III clinical study involving 312 participants. Dr. Reddy’s also highlighted that the product’s active pharmaceutical ingredient and formulation were developed entirely in-house, underscoring its capabilities in peptide science and complex drug manufacturing as it expands its diabetes and obesity portfolio. Dr. Reddy’s plans to introduce generic semaglutide in multiple international markets, subject to regulatory approvals, as part of its broader GLP-1 strategy to compete in the rapidly expanding metabolic disease segment currently led by Novo Nordisk.
RDY's Zacks Rank & A Stock to Consider
Dr. Reddy’s carries a Zacks Rank #4 (Sell) at present.
A better-ranked stock in the biotech sector is Amarin Corporation (AMRN - Free Report) , currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Over the past 60 days, estimates for Amarin’s 2026 loss per share have narrowed from $7.01 to $6.36. Over the same period, loss per share estimates for 2027 have also narrowed from $5.50 to $4.64. AMRN shares have risen 7.1% year to date.
Amarin’s earnings beat estimates in three of the trailing four quarters and missed in the remaining one, with the average surprise being 50.02%.