Drugmaker Dr Reddy's Laboratories Ltd announced that the United States Food and Drug Administration (USFDA) completed a records assessment at its active pharmaceutical ingredient (API) manufacturing facility in Mexico, with two observations issued at the conclusion of the assessment. The assessment was conducted under Section 704(a)(4) of the Federal Food, Drug, and Cosmetic Act at Industrias Químicas Falcón de México, S.A. de C.V., also known as Dr Reddy's Mexico, located in Jiutepec, Morelos, Mexico. According to the company's regulatory filing, the records assessment was conducted from July 17 to September 8, 2026, and at the conclusion of the assessment, the USFDA issued Form FDA 2953 containing two observations. Dr Reddy's said it will respond to the observations within the stipulated timeline. A records assessment by the USFDA refers to a regulatory review where the agency requests and examines a manufacturing facility's documentation and records to evaluate compliance.
The company reported a net profit of ₹443.5 crore, significantly below the CNBC-TV18 poll estimate of ₹817.8 crore. Profit also declined 69% from ₹1,418 crore reported in the corresponding quarter last year. According to CNBC TV18, revenue from operations came in at ₹8,070.5 crore, lower than the Street estimate of ₹8,804.7 crore, and down 6% from ₹8,545.2 crore a year earlier. The company said the June quarter was impacted by an unexpected ₹240 crore provision related to its semaglutide active pharmaceutical ingredient (API) business. The company attributed the year-on-year decline largely to lower sales of Lenalidomide.
Operating performance was equally subdued, with EBITDA standing at ₹1,009 crore, missing analysts' estimate of ₹1,415.3 crore and falling 55% year-on-year from ₹2,278.4 crore. As reported by CNBC TV18, EBITDA margin contracted sharply to 12.5%, compared with 26.7% in the year-ago quarter, and remained well below the CNBC-TV18 estimate of 16.1%. The company noted that EBITDA margin was impacted by higher solvent and freight costs arising from the West Asia conflict. Revenue from North America fell 35% year-on-year to ₹2,200 crore, though it rose 26% sequentially, accounting for 27% of consolidated revenue.
During the quarter, Dr Reddy's launched six new products in the region and filed five Abbreviated New Drug Applications (ANDAs) and one New Drug Application (NDA) with the US Food and Drug Administration (USFDA). According to CNBC TV18, shares of Dr Reddy's Laboratories Ltd ended at ₹1,161.00, up by ₹20.20, or 1.77%, on the BSE. The company attributed the year-on-year decline largely to lower sales of Lenalidomide.
