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Dr. Reddy's Laboratories Limited RDY reported fourth-quarter fiscal 2025 earnings of 22 cents per American Depositary Share (ADS), which beat the Zacks Consensus Estimate of 20 cents per share. The company reported earnings of 18 cents per ADS in the year-ago quarter.
Revenues grew 20% year over year to $996 million, surpassing the Zacks Consensus Estimate of $867 million. The year-over-year improvement was primarily driven by growth in global generics revenues.
The stock gained during pre-market hours today, likely because investors are impressed by RDY’s better-than-expected fiscal fourth-quarter results. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
Dr. Reddy’s reported revenues under three segments — Global Generics, Pharmaceutical Services & Active Ingredients (PSAI) and Others.
Global Generics revenues totaled INR 75.4 billion, up 23% year over year. The increase was primarily driven by revenues from the acquired Nicotine Replacement Therapy portfolio, higher sales volumes and new product launches.
Dr. Reddy’s launched seven new products in the United States during the reported quarter.
As of March 31, 2025, a total of 76 generic filings were pending approval from the FDA, comprising 73 abbreviated new drug applications (ANDAs) and three new drug applications. Of these 73 ANDAs, 44 were Para IVs.
Shares of Dr. Reddy’s have lost 15.1% year to date compared with the industry’s 17.4% decline.
PSAI revenues amounted to INR 9.6 billion, up 16% from the year-ago level. The improvement was driven by increased active pharmaceutical ingredients (API) sales volumes and revenues from new API product launches, partially offset by adverse price variance. Growth in the pharmaceutical services business also contributed to the year-over-year increase.
Revenues in the Others segment totaled INR 132 million, down 91% year over year.
Gross margin declined 300 basis points to 55.6% in the reported quarter due to higher price erosion in generics, lower manufacturing overhead leverage and milestone income accrued in the previous year.
Research and development expenses jumped 6% year over year to $85 million, due to ongoing development efforts across generics, biosimilars and novel oncology assets.
Selling, general and administrative expenses totaled $282 million, up 17% year over year. The rise was primarily driven by increased sales and marketing investments aimed at enhancing existing brands and supporting new consumer healthcare initiatives.
Revenues in fiscal 2025 came in at $3.8 billion, up 17% from the $3.3 billion recorded in fiscal 2024. Earnings per share totaled 79 cents compared with 78 cents in fiscal 2024.
During the reported quarter, Dr. Reddy’s and partner, Alvotech ALVO, announced the FDA’s acceptance of a regulatory filing, seeking the approval of AVT03, a proposed biosimilar of Amgen’s Prolia (denosumab) and Xgeva (denosumab), for review.
The biologic license application (BLA) was submitted under the 351(k) pathway, which is the FDA’s biosimilar application process. AVT03 is a human monoclonal antibody developed by Alvotech.
Subject to approval, RDY/ALVO’s AVT03 could significantly enhance patient access to affordable treatment options for osteoporosis and other bone-related conditions. AVT03’s approval would align with broader efforts to expand the availability of high-quality biologic medicines. Given the high cost of branded drugs, a biosimilar alternative could provide substantial financial relief to patients and healthcare systems.
Additionally, with osteoporosis affecting millions across the United States, the introduction of AVT03 could improve treatment accessibility for a large patient population in need of effective bone health therapies. Dr. Reddy’s and Alvotech originally signed the license and supply agreement for AVT03 in 2024.
Dr. Reddy's Laboratories Ltd price-consensus-eps-surprise-chart | Dr. Reddy's Laboratories Ltd Quote
Dr. Reddy’s currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the biotech sector are Bayer BAYRY and Allogene Therapeutics ALLO, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 60 days, estimates for Bayer’s earnings per share have increased from $1.17 to $1.23 for 2025. During the same time, earnings per share have increased from $1.27 to $1.31 for 2026. Year to date, shares of Bayer have gained 39.3%.
BAYRY’s earnings matched estimates in two of the trailing three quarters while missing the same on the remaining occasion, the average negative surprise being 19.61%.
In the past 60 days, estimates for Allogene Therapeutics' loss per share have narrowed from $1.32 to $1.21 for 2025. During the same time, loss per share estimates for 2026 have narrowed from $1.35 to $1.17. Year to date, shares of ALLO have lost 45.5%.
ALLO’s earnings beat estimates in three of the trailing four quarters and matched the same on the remaining occasion, delivering an average surprise of 11.70%.
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This article originally published on Zacks Investment Research (zacks.com).
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