Dr Reddy’s Q4FY26: Revlimid drop, semaglutide delays

Why analysts turned cautious after Q4FY26

Analysts have become more cautious on Dr Reddy’s Laboratories after the company reported a weaker-than-expected March quarter (Q4FY26). The concerns highlighted by brokerages centre on a sharp fall in high-margin Revlimid sales in the US, ongoing pricing pressure in the US generics market, and delays in key launches linked to semaglutide. While several brokerages continue to point to long-term opportunity from semaglutide and biosimilars, they see limited near-term triggers for the stock. The immediate market reaction reflected this shift in sentiment as investors weighed earnings visibility for the next few quarters.

Q4FY26 profit drop and the Revlimid impact

Dr Reddy’s reported profit after tax (PAT) of ₹931.7 crore for the quarter, down 43.7% year-on-year. The decline was linked in analyst commentary to a sharp fall in Revlimid sales in the US market. Revlimid has been a high-margin product for many generic players, and the text notes a key overhang from the rapid decline in Revlimid revenues after the drug lost patent protection in the US. Analysts believe the pace of this decline could create a meaningful revenue gap in FY27. That potential gap is a core reason brokerages are questioning the near-term earnings trajectory.

US generics pricing pressure remains a headwind

Beyond product-specific issues, analysts flagged continued pricing pressure in the US generics market. This is important because it affects the base business and can limit the ability to offset declines from products like Revlimid. The broker view in the provided text is that these pressures could weigh on earnings over the next few quarters. With pricing pressure persisting, the market is likely to focus more closely on the timing and scale of new product ramps rather than relying on broad-based recovery in generics pricing.

Semaglutide: long-term opportunity, near-term execution risk

Semaglutide remains a central growth driver in the long-term narrative, but analysts pointed to delays and execution risks around its launch. Dr Reddy’s reduced its semaglutide sales guidance for FY27 to 10-11 million units from 12 million units earlier, citing approval delays. That guidance revision is a clear data point that brokerages are using to reset expectations. It also reinforces the market’s focus on regulatory timelines rather than only potential market size.

Canada update: DINs received, Notice of Compliance pending

Investor attention has been particularly sharp around Canada. In a stock exchange filing responding to a media report, Dr Reddy’s clarified that it has not yet received approval, described as the Notice of Compliance, for its semaglutide injection from Health Canada. The company added that it received Drug Identification Numbers (DINs) for semaglutide injection on April 22, 2026, as part of the regulatory review process. It said it continues to engage with the regulator and remains committed to bringing the product to the Canadian market upon approval. The company also stated there was no material event or information requiring disclosure under Regulation 30 of the SEBI Listing Regulations at that stage.

Brazil setback: ANVISA denial adds uncertainty

Regulatory hurdles were also flagged in Brazil. The provided text notes that Brazil’s regulator denied the registration of semaglutide because the filing did not meet all technical requirements. A market update further stated that ANVISA denied approval for Dr Reddy’s generic semaglutide after the application failed to meet regulatory requirements. Citi, which maintained a sell rating in the cited coverage, linked this to the company missing the initial wave of generic launches in Brazil. This Brazil development added to concerns that regulatory and competitive dynamics could make scaling up semaglutide harder than the market initially assumed.

India launch context: Obeda and tablet authorisation

In India, the patent for semaglutide lapsed in March, and the country’s drug regulator has authorised the company’s semaglutide tablets, with a senior executive indicating they are set for launch shortly. The text also states that Dr Reddy’s rolled out its injectable semaglutide drug, Obeda, in March in India to manage diabetes, and planned to explore launches in Brazil and other regions following patent expirations. Another report in the supplied material said Dr Reddy’s intends to introduce a generic version of Novo Nordisk’s weight-loss drug Wegovy at a price that could be as much as 60% lower than the branded product. These points show the company is building a multi-market semaglutide strategy, even as approvals in key overseas markets remain in focus.

Stock reaction: declines after results and regulatory headlines

The stock saw multiple bouts of pressure across different updates in the provided text. After Q4 commentary triggered concerns, Dr Reddy’s shares slipped 3.9% intraday on the BSE before trimming losses to trade flat around 1:55 PM. Separately, as per NSE data mentioned, the shares traded at ₹1,316, down ₹15 or 1.13%. In another session, shares were cited at ₹1,217.60, down 1.5% even as benchmark indices were higher. A Reuters-style market note described a fall of 1.7% to ₹1,214 after the Brazil denial headline. The text also references a sharper drawdown on October 30, when the stock dropped nearly 6% to ₹1,180.90 after the company disclosed a non-compliance notice from Health Canada related to its semaglutide injection submission.

Key facts table

What brokerages are signalling about near-term triggers

Across the provided coverage, brokerages pointed to limited near-term triggers, even while acknowledging longer-term optionality from semaglutide and biosimilars. Citi and Goldman Sachs were mentioned among firms that downgraded or maintained cautious views, with competition and execution challenges referenced in the context. The market is also weighing how quickly Dr Reddy’s can replace the earnings contribution lost from Revlimid, especially given analyst expectations that the decline could open a revenue gap in FY27. The combination of US pricing pressure and uncertain timing for overseas semaglutide approvals keeps attention on quarterly execution rather than long-dated potential.

Conclusion

Dr Reddy’s Q4FY26 result and the sharp Revlimid decline have pushed analysts to reassess near-term growth visibility, while semaglutide remains a longer-term opportunity constrained by regulatory timing. The next set of updates investors will watch, based on the provided text, are regulatory outcomes in Canada, progress after the Brazil denial, and execution against the revised FY27 semaglutide unit guidance.