Dr Reddy's shares fell as much as 7%, hitting a 52-week low, after the company reported a 69% decline in Q1 FY27 net profit. Weak global generics sales, a sharp drop in North America revenue, margin pressure, and higher operating costs weighed on investor sentiment. Despite near-term challenges, the company expects business performance to improve in the second half of FY27.
Shares of Dr Reddy’s Laboratories Ltd witnessed heavy selling pressure on Thursday, July 23, 2026, after the pharmaceutical major reported a weak performance for the June quarter (Q1 FY27). The stock declined nearly 7% at the opening bell and touched a fresh 52-week low of ₹1,101 on NSE, compared with its previous close of ₹1,182.82.
The decline came as investors reacted to a sharp fall in profitability, weak global generics revenue, margin pressure and concerns over future earnings growth. After opening lower, the stock recovered partially and was trading around ₹1,145.60, down 3.15% during the session.
Dr Reddy’s Q1 FY27 Results: Net Profit Falls 69%
Dr Reddy’s Laboratories reported a steep 69% year-on-year decline in consolidated net profit to ₹443.5 crore in Q1 FY27, compared with ₹1,417.8 crore in the same quarter of the previous year.
The company’s revenue from operations declined 5.5% to ₹8,070.5 crore during the quarter, compared with ₹8,545.2 crore in Q1 FY26. The fall in revenue was mainly due to weakness in the global generics business, which contributes the majority of the company’s revenue.
Total expenses increased 17% year-on-year to ₹4,316 crore from ₹3,682 crore, impacted by higher freight costs, input expenses and other operational challenges.
Why Dr Reddy’s Stock Fell After Q1 Results
The major reason behind the stock decline was the weak performance of the global generics segment. Revenue from global generics fell 4.7% to ₹7,199.3 crore in Q1 FY27 from ₹7,562 crore in the corresponding period last year.
The company’s North America business, which is a key market for Dr Reddy’s, witnessed a sharp 35% decline in revenue. The slowdown in the US market impacted overall global generics growth, although India, Europe and emerging markets reported comparatively better performance.
The company also recorded a ₹240 crore impact related to Semaglutide API inventory provisions during the quarter. Semaglutide is an active pharmaceutical ingredient used in several diabetes and weight-management medicines.
Margins also remained under pressure as EBITDA margin declined sharply to 12.5% in Q1 FY27 from 26.7% a year ago. The company highlighted that higher solvent and freight costs due to the Middle East conflict affected profitability.
The management also indicated that the impact of the transition beyond lenalidomide revenue will continue for the next few quarters, adding pressure on near-term earnings.
Management Outlook and Future Growth Focus
Dr Reddy’s management stated that the company’s focus remains on strengthening its base business through disciplined execution and operational improvement. The company aims to build long-term growth through its pipeline of peptides, biosimilars and innovative assets.
The company also expects improvement in business performance in the second half of FY27, supported by operational measures and new growth opportunities.
Dr Reddy’s Share Price Performance
Dr Reddy’s shares have declined nearly 8% in the last one year and have fallen over 8% on a year-to-date basis. The stock has corrected 11.6% in the last one month and around 6% in the previous five trading sessions.
The pharma stock touched a 52-week high of ₹1,414.90 on June 29, 2026, while the latest low stood at ₹1,101 on July 23, 2026. The company’s market capitalisation stood around ₹96,171 crore during Thursday’s trading session.
