Dr. Reddy's Laboratories 4Q26 Update

Dr. Reddy's 4QFY26 results came in below expectations due to lower lenalidomide sales and shelf stock adjustments, leading Goldman Sachs to maintain a Sell rating with a lower price target of Rs1,050.

Key Takeaways

• 1.Dr. Reddy's 4QFY26 financial performance significantly missed expectations, with revenue down 11.6% yoy and adjusted EBITDA margins hitting -10% including SSA impacts.
• 2.The company faces concerns regarding the generic Ozempic (semaglutide) opportunity in Canada, which may be lower than market expectations.
• 3.Intense price erosion in the base business and a thin near-to-medium term pipeline for high-value products are major headwinds.

Table of Contents

• 4Q26 below: Headwinds emerge, albeit higher than expected; remain Sell
• Focus on Semaglutide launch in Canada
• Status on biosimilars foray
• Robust double digit growth in the India business continues
• Europe business remains healthy
• Valuation and risks
• Disclosure Appendix

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