Oct 23, 2026 earnings call — Semaglutide resumption and biosimilars progress
Company reported consolidated revenues of ₹8.01 thousand crores (US$905 million) and an EBITDA margin of 20.6%.
Revenue $0.9B (est $0.9B) · EPS $0.12 (est $0.10)
Key quotes
"Subject to successful validation, we expect to reload semaglutide both directly as well as to our partners by November 2026, consistent with the timelines communicated earlier."
"We also remain focused on advancing abatacept and other complex generics as they move toward the regulatory review process in the coming quarters."
"The business reported a 1.5 year over year decline in revenue, while EBITDA margin was at 20.6% for the quarter."
Analyst Q&A 17
sema restart and gross margin drivers
Q (Neha Manpuria · BofA): Analyst asked if semaglutide resumption in early November will use the company’s own API or the same partner, and how confident management is in meeting previously given volume guidance. She also asked what drove the quarter's gross margin improvement and whether gross margin is now at the bottom.
A: Management said the API scale-up issue is resolved and the necessary API was shipped to the fill-and-finish partner, but validation results are still pending before launch. They plan most quantities for Canada and some for Latin America and Africa. Finance said gross margin target is 50% to 55%; this quarter was 52.1%, driven by new products and business mix, and they expect margins to improve further.
"This problem is resolved, and we shipped all the necessary API to our partner." — Erez Israeli
cash flow swing and margin drivers
Q (Kunal Dhamesha · Macquarie): Analyst asked what caused a large change of ₹1.37 thousand crore in other assets and liabilities and then asked for a split of the U.S. revenue improvement — how much from new product launches versus volumes or pricing — and about raw material cost pressure going forward.
A: Management said the biggest driver of the cash flow change was payments related to an SSA claim, and other balances reflect various operations; they noted a $50 million provision in Q4. For margins, they said the main driver was business mix, because India, EM and NRT are more profitable, and the U.S. improved due to new products; expenses were flat. On input-cost pressure, they cited increases in KSMs, solvents and logistics which cost close to 100 basis points of EBITDA and expect this trend to continue in Q3 and Q4.
"So this is the 1 where this SSA claim, what we had, I think there was the payments have happened this quarter." — Mannam Venkatanarasimham (CFO)
validation steps, approvals, NRT change
Q (Damayanti Kerai · HSBC): Analyst asked why API validation was done before shipping to the fill-and-finish partner and how that process works, and asked about semaglutide approvals in more markets and whether scale-up held up regulatory approvals. She also asked about the NRT business model change and when performance should recover.
A: Management explained validation includes re-tweaking and validating the API, then validating the drug product at the partner using that API; that second-stage process takes about three weeks and activities are on time toward a November restart. They said the right number of approved markets is 89, and the scale-up issue did not require regulatory file amendments so approvals continued; some approvals were delayed only because samples needed to be sent. On NRT, management said the business model removed payments to Haleon and will show lower sales but higher profit for about two more quarters, with growth in high single digits to possibly double digits and profitability above expectations.
"And we do not require any amendment to the file or anything like that." — Erez Israeli
abatacept timing and R&D outlook
Q (Tauseef Shaikh · BNP Paribas): Analyst asked for any incremental updates on abatacept ahead of the goal date in December and asked whether the lower R&D spend is a new base going forward.
A: Management said the plant inspection report is pending and the goal date is December 22nd; approval is in the hands of the U.S. FDA. They expect R&D to settle in the range of 7% to 8% in coming quarters.
"The goal date is indeed December 22nd, and we are hoping for an approval it is obviously in the hands of the U.S. FDA." — Erez Israeli
complex injectable pipeline
Q (Madhav Marda · Millennium): Analyst asked for clarification on the comment about one or a few complex injectable launches in the second half and whether those are meaningful U.S. products.
A: Management said they have a few interesting complex injectable products in the pipeline and will discuss them when closer to year end. They were cautious about promising specifics because prior complex generics approvals have been uncertain, but confirmed there are exciting products ahead that are meaningful for the U.S. market.
"But, yeah, we do have a few interesting products in our pipeline." — Erez Israeli
Europe growth and SG&A level
Q (Foram Parekh · Bank of Baroda Capital): Analyst asked why Europe ex-NRT growth is declining and whether Europe can return to double-digit growth; she also asked if the lower SG&A contribution is sustainable and whether India’s growth run rate will hold.
A: Management said NRT should grow at high single digits or even double digits and will help Europe; ex-NRT Europe is expected to grow around single-digit this year, so Europe growth this year will not be significant. They clarified overall SG&A is 32% and cost productivity gains are visible, so SG&A should stay around this level in coming quarters. For India, they expect sustained high double-digit growth in the same neighborhood and aim to grow faster than the market.
"So overall, just want to clarify our SG&A is 32%." — Mannam Venkatanarasimham (CFO)
biosimilars strategy and abatacept focus
Q (BNY Mellon): Analyst asked how the company plans to expand its biosimilar business via R&D and partnerships, and what revenues might be expected over the next 3–4 years.
A: Management said they are pursuing both internal manufacturing and licensing partnerships; abatacept will be the first meaningful product launched from their own facilities, with rituximab and more to follow. They also said revenue outcomes will depend on abatacept’s success and that abatacept should be a significant product.
"Abatacept is going to be the first meaningful product to be launched out of our own facilities." — Erez Israeli
rituximab share, JV sales, abatacept ramp
Q (Vishal Manchanda · Systematix): Analyst asked Dr. Reddy’s current rituximab market share in Europe and where it could be in one to two years, asked whether the China JV’s generic approval contributed to current quarter numbers, and asked how long listing on formularies will take after abatacept approval.
A: Management said rituximab market share in Europe is low single-digits and capacity constraints limit fast gains; because competition is high they do not expect significant change soon. For the China JV, they record their share of the profit (51%) rather than sales. On abatacept, they said launch can begin immediately on approval with small sales, but full ramp (codes and registration) and broader uptake will occur around six months after approval.
"We are recording our share of the profit of that." — Mannam Venkatanarasimham (CFO)
milestones, forex, CapEx guidance
Q (Bino Pathiparampil · Elara Capital): Analyst asked whether Russian milestones are included in revenue breakout and why finance income was much lower this quarter, and asked for capex guidance for the full year.
A: Management said bendamustine is in U.S. revenue and the Russia milestone is included in EM revenue. They explained finance income was lower due to forex movements in the ruble spot rate causing a P&L debit versus June. For full-year capex they noted previous guidance was around ₹1.8 thousand crore but now expect around ₹1.6 thousand crore to ₹1.7 thousand crore.
"Earlier, we have guided around ₹1.8 thousand crore." — Mannam Venkatanarasimham (CFO)
abatacept subcutaneous timeline
Q (JPMorgan): Analyst asked whether prior timelines for the subcutaneous abatacept approval (U.S. Q4 FY28 and non-U.S. Q1 FY28) remain unchanged.
A: Management said the timelines remain consistent and there is no change to the previously stated schedule.
"Consistent. We stay consistent with it. Yeah." — Erez Israeli
abatacept non-US ramp and manufacturing
Q: Analyst asked how the company expects abatacept to ramp in non-U.S. markets where the reference drug is large, and whether manufacturing for those markets will be at Bachupally.
A: Management said Europe is a very important market and will be launched after the United States, and that they expect meaningful uptake there. They confirmed manufacturing for those markets will be done at Bachupally.
"We believe that European market is a very important market for this." — Erez Israeli
India IPM volume growth drivers
Q (UTI Pension Fund): Analyst asked why India market growth has accelerated recently with more volume growth versus prior pricing-driven growth and what the outlook is for the second half and beyond.
A: Management said a key change is the launch of semaglutide and GLP-1 products which add significant volumes, and they also have more innovative new product launches contributing. They believe GLP-1 impact will be material and that branded generics they invest in are doing well, while the rest of the market is largely price-driven.
"1 thing that changed significantly is obviously the launch of semaglutide and the GLP 1 product." — Erez Israeli
abatacept market share and approval confidence
Q (Vivek Agarwal · Citi): Analyst asked what a fair U.S. market share would be for the company’s abatacept one year after launch, and how confident management is about approval and the chance of a CRL. He also asked about sustainability of U.S. and North America business and margin outlook given higher R&D.
A: Management said if they are alone against the innovator in a medical-benefit product, a fair market share range for IV abatacept is 15% to 25%, with subcutaneous adding later. They said they feel good about the product, inspection and correspondence with FDA but acknowledged a chance of a CRL exists. On the U.S./North America trajectory and margins, they are optimistic: growth, mix and expense control should keep EBITDA above 20%, with potential to be 21%+ if semaglutide launches succeed.
"I believe that a fair market share can be any number from 15% to 25%," — Erez Israeli
Sugammadex price erosion post-launch
Q (Tushar Manudhane · Motilal Oswal): Analyst asked what price erosion has been seen for Sugammadex after launch and whether the vial price has changed.
A: Management said the initial contract price terms are continuing and implied there has not been meaningful erosion from that initial contract. They offered to follow up with more detail later.
"Price, I think. Whatever we have in the initial contract signed, I think it is getting continued." — Mannam Venkatanarasimham (CFO)
abatacept sBLA and commercial build-out
Q (Kunal Dhamesha · Macquarie): Analyst asked when the abatacept sBLA for subcutaneous is expected to be filed and whether the commercial launch depends on IP outcomes or just approvals; also asked about timing and build-out of U.S. commercial infrastructure.
A: Management said they expect to submit the sBLA around February–March 2027. They said launches depend on approvals, not IP outcomes, and that the main commercial framework in North America is already in place with only a few additional sales hires needed, so not much incremental cost is expected.
"So we already. We started to do it already years ago." — Erez Israeli
sema launch timing and device volume outlook
Q (Astute Investment Management): Analyst asked, given expected validation completion in November, when launches in big markets like Brazil and Turkey are expected and what the company’s device (pen) volume estimates are for 2028–2029.
A: Management said Brazil is likely in Q4 at the beginning of Q4 and most smaller markets will launch end of Q3 or start of Q4 as batches are validated and shipped; some launches may fall in December or January. On device volumes, they reiterated the current plan to hit 6 to 7 million devices this year and maintained a tentative longer-term run rate target around 12 to 15 million pens, subject to market success and approvals.
"Brazil likely in Q4. The beginning of Q4." — Mannam Venkatanarasimham (CFO)
PSAI / CDMO growth and contract nature
Q (Saion Mukherjee · Nomura): Analyst asked why PSAI segment growth has been muted, whether CDMO revenue of $100 million-plus is from generics or innovation, when the new contract will start, and whether more CDMO contracts could be added over the next year.
A: Management said CDMO should grow in double digits and combines both discovery/innovation work and transfers of production from large companies into their lines; they have several such projects and normal Phase II/III CDMO projects. They expect the CDMO business to grow to 2x–3x in the next 3 to 4 years, while API merchant demand is declining as customers prefer finished goods for peptides and similar products.
"I believe that the that this business should grow and should reach 2x to 3x of these numbers in the next 3 to 4 years." — Erez Israeli