Shares of pharmaceutical giant Dr. Reddy’s Laboratories took a sharp hit during Thursday's trading session, dropping 9% as investors reacted to underwhelming first-quarter results. The company reported a significant 69% year-over-year decline in net profit, which settled at Rs 443 crore.
The downturn was primarily attributed to a substantial Rs 240 crore impact linked to semaglutide API provisions. Furthermore, the company faced operational headwinds as geopolitical tensions in the Middle East drove up freight costs and solvent expenses, putting considerable pressure on EBITDA margins.
Top-line performance also suffered, with revenue sliding 6% to Rs 8,071 crore. Analysts have expressed concern over these immediate hurdles, leading three prominent brokerages to slash their price targets for the stock.
As the market digests these developments, stakeholders are closely monitoring how the firm plans to manage inventory provisions and mitigate rising logistics costs throughout the remainder of the fiscal year.
