Dr Reddy's Forecasts FY27 EBITDA Margins to Approach 20% Amid Ongoing Semaglutide Investment

Dr. Reddy's Laboratories Sees EBITDA Margins Hovering Around 20 Percent Mark in FY27

Dr. Reddy's Laboratories is anticipating EBITDA margins to remain steady around 20 percent in the fiscal year 2027, despite a significant decline in its fourth-quarter profit due to one-off hits and the loss of a key drug.

The company's weak March-quarter performance saw revenue come in at Rs 7,516 crore, with EBITDA of Rs 981 crore and net profit at just Rs 220 crore, a decline of 86 percent year-on-year. Management attributed most of the decline to temporary shocks rather than a structural deterioration. A key drag was a Rs 453 crore shelf stock adjustment linked to lenalidomide, after the drug's patent expired earlier this year.

Comparison of Fourth-Quarter Performance

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Excluding these one-offs, underlying EBITDA margin stood closer to 19.5 percent, reinforcing the company's confidence in sustaining margins near the 20 percent level. Beyond exceptional charges, a structural shift also weighed on earnings. North America revenue declined sharply as lenalidomide sales fell after patent expiry, while pricing pressure persisted in generics.

Dr. Reddy's is leaning on semaglutide to drive its next growth cycle. The company became the first to secure regulatory approval for semaglutide injection in Canada and is preparing to roll it out quickly. "We are going to launch in the next few days," Chief Executive Erez Israeli said, calling the Canada rollout largely a logistics exercise at this stage as shipments and approvals are finalised.

Key Growth Driver: Semaglutide

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The company has already launched injectable semaglutide under the brand Obeda in India and is now preparing to introduce the oral version, expanding access and compliance. Globally, Dr. Reddy's is pursuing an aggressive semaglutide strategy, having filed in multiple geographies and aiming to synchronise approvals and launches to capture early-mover advantage. "From filing to approval and timely launch, we are focusing across all aspects," management said earlier.