DRL says cap on trade margins a positive, posts 36% dip in Q2 PAT

Mumbai:Hyderabad-based Dr Reddy's Labs has said the recent capping of trade margins on 137 anti-cancer drugs by by drug pricing watchdog National Pharmaceutical Pricing Authority is a positive move and the decision is expected to increase access to lifesaving medicines for the patients.

Over the last few months, the Supreme Court is hearing petitions on high trade margins and hauled up regulatory agencies for inaction against such practices.

Dr. Reddy's announced for the second quarter of FY2027 its revenue fell 1.5% to ₹8,671 crore while the profit after tax fell 36% to ₹925 crore versus ₹1,437 crore in the previous year.


Dr. Reddy's co-chairman and MD, G V Prasad said, "We continued to improve the overall health of our business, delivering double-digit base business growth and EBITDA margins of over 20% during the quarter. We remain focused on strengthening our core businesses, enhancing productivity, and investing in strategic growth platforms to deliver consistent performance, while creating long-term value drivers."

Top company officials said the company expects to relaunch its semaglutide brand during the third quarter of FY27 including India, Canada and ten other markets following halting its production earlier in July this year.

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MV Ramana, CEO, Global Generics business for Dr. Reddy's told ET that the existing markets continue to see a demand for the weight-loss and anti-diabetes drug while newer markets like Chile are opening, where Dr. Reddy's will be the first to launch its product.

"In the later part of FY27-28, we will have more emerging markets opening and many of them being branded in nature, we will have the opportunity to build the brand and ensure continuity of the product and later we will see launches in Europe and US as well," he noted.

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The company added its aspiration to figure among the top five players by market share in the competitive Indian market continues as it moved one notch up from ninth to eighth rank during this quarter.