Dr Reddy's Profit Plummets 69 Percent Amid Quality Issues

Shares of Dr Reddy's Laboratories fell as much as 9 percent, hitting a 52-week low of ₹1,101 on July 23, 2026, following a weak first-quarter financial report. The company reported a 69 percent year-on-year decline in consolidated net profit for the quarter ended June 30, with reports citing a figure of ₹443 crore. Revenue from operations fell 6 percent to ₹8,071 crore.

The downturn was driven by a ₹240 crore provision for inventory and costs linked to an impurity issue in the active pharmaceutical ingredient of generic semaglutide, which disrupted supplies in India and Canada. The company also faced pricing pressures in North America, where revenue dropped 35.3 percent to ₹2,205 crore, and lower sales of the cancer drug Lenalidomide. Additional headwinds included increased solvent and freight costs stemming from conflict in the Middle East.

Regulatory and political pressures added to the decline. The company received a Form 483 with seven observations following a June 2026 inspection of its biologics facility in Bachupally. Simultaneously, U.S. President Donald Trump unveiled a phased tariff plan for imported generic medicines. Brokerages including Jefferies and Dolat Capital issued bearish ratings citing margin pressure, while others, such as CLSA, expect the situation to stabilize by November 2026.