New businesses, partnerships hold key to Dr Reddy’s growth

T he Dr Reddy's Laboratories Ltd (DRL) stock fell more than 3% on Wednesday after the company posted worse-than-expected March quarter (Q4FY24) results, with higher research and development (R&D) expenditure hampering profitability.

- Ashish Agrawal

The company's revenue fell 2% sequentially to ₹7,083 crore, but the drop in Ebitda was steeper at nearly 12% to 1,784 crore. DRL's US sales dropped 2.2% sequentially, driven by lower Revlimid sales and priceerosion in a few other molecules.

Some analysts reckon DRL's US revenue from Revlimid, a key product, may well have peaked in FY24. If that's the case, the big challenge in the coming quarters is to build alternative revenue streams before Revlimid goes off-patent in January 2026.