2025-01-24 11:48:00 :
(Reuters) – Shares of Dr Reddy’s Laboratories fell 6% on Friday and were on track for their worst trading day in nearly nine months as sales and pricing pressure fell in key North American markets. Its third-quarter profit missed expectations.
The generic drug maker was the top loser on the Nifty Pharma index and the benchmark Nifty 50 index. As of 11:45 am IST, the pharmaceutical index was down 1.1% and the Nifty was up 0.5%. [.BO]
“The share price decline comes amid recent concerns over the company’s weak sales in the U.S.,” said Centrum Broking analyst Sumit Gupta.
Indian generic drugmakers are facing slowing U.S. sales, delays in new drug application approvals and lower pricing amid fierce competition.
CLSA analyst Kunal Lakhan said Reddy’s growth will remain modest over the next two years as it relies heavily on generic Revlimid, a popular cancer treatment made by Bristol-Myers Squibb.
On Thursday, the company said sales of generic lenalidomide were slowing, putting pressure on its North American business. The region contributes about 41% of Reddy’s total revenue.
Analysts at Nuvama said in a note that the drug’s sales are “close to a cliff” as competition intensifies in the region.
“Investors’ attention is focused on how Dr. Reddy’s can offset the impact of gRevlimid on earnings,” Nuvama analysts said.
Nuvama lowered its target price on the stock to Rs 1,533 from Rs 1,553 earlier and maintained a ‘buy’ rating.
Reddy’s North American sales increased 1% year over year, but fell 9% sequentially in the quarter.
Macquarie said in a report that its sales in India boosted its overall revenue, reflecting slower growth due to weaker sales in its gourmet and aerobics segments.
London Stock Exchange data showed that at least four brokerages cut their target prices for the stock and three downgraded their ratings.
(1 USD = 86.2950 Indian Rupees)
(Reporting by Manvi Pant in Bengaluru; Editing by Savio D’Souza and Eileen Soreng)
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