Dr. Reddy’s Q2 FY26: Growth Holds as Lenalidomide Fades

Transcript intelligence

What changed

Compared with the prior-quarter analysis, management highlighted the Stugeron portfolio acquisition, further consumer-health integration, additional fill-and-finish capacity, and progress toward semaglutide and abatacept milestones. At the same time, the analysis continued to flag U.S. generic price erosion and the approaching decline of lenalidomide revenue.

Guidance delta

Maintained. Management continued to target a return to a 25% EBITDA margin in FY27.

Key takeaways

• Revenue increased 9.8% year over year to approximately $992 million, supported by consumer health and favorable foreign exchange.
• EBITDA margin was 26.7%; management said cost controls and pipeline growth can support a return to a 25% margin in FY27.
• U.S. generics remained pressured by price erosion and the tapering of lenalidomide sales.
• Semaglutide, abatacept, and biosimilars remain central pipeline and capacity priorities.
• The stock’s event-session move was negative relative to SPY, with subsequent drift also negative.

Management priorities

• Advance semaglutide approvals and scale fill-and-finish capacity.
• Progress the abatacept biosimilar toward approval and launch.
• Expand biosimilar and complex-generic products.
• Integrate the nicotine-replacement and consumer-health businesses.
• Maintain cost discipline while increasing selected capacity investments.