Bino Pathiparampil

Bino Pathiparampil inquired about the contribution of lenalidomide to EBITDA margins in the current quarter and the outlook for EBITDA margins in Q4 and FY2027. He also asked for the latest timelines for Denosumab and Rituximab launches in the U.S.

Answer

CEO Erez Israeli stated that due to confidentiality agreements, the exact lenalidomide contribution could not be disclosed, but noted that the decline in U.S. revenue was primarily due to lower lenalidomide sales. For Denosumab, a U.S. launch is likely in Q2 FY2027 or later, pending a response to the CRL. For Rituximab, a response to observations will be submitted within two weeks, followed by an expected re-inspection, delaying approval beyond the next six months.

Bino Pathiparampil inquired about the contribution of lenalidomide to Dr. Reddy's EBITDA margins, the outlook for overall EBITDA margins in Q4 and FY27, and the latest timelines for Denosumab and Rituximab approvals in the U.S.

Answer

CEO Erez Israeli stated that lenalidomide's specific contribution to EBITDA margins could not be disclosed due to confidentiality, but confirmed its decline was the primary reason for the U.S. business's overall decline. He indicated that Denosumab's U.S. launch is likely in Q2 FY27 or later due to a deficiency letter. For Rituximab, a re-inspection of a specific fill-finish line is expected, delaying approval beyond the next six months.

Bino Pathiparampil questioned the drivers behind the strong India business growth, including any GST impact and the revenue contribution from the Stugeron acquisition, and sought reaffirmation on the EBITDA margin outlook beyond Revlimid.

Answer

CEO Erez Israeli attributed India's growth to strategic execution, inorganic moves, and innovation, noting minimal GST impact. He clarified the Stugeron acquisition was INR 100 crore, with insignificant Q2 impact. He reiterated confidence in returning to 25% EBITDA margins within the next two years, driven by base business growth, cost containment, and key product launches.

Bino Pathiparampil from Elara Capital asked for clarification on the significant decline in PSAI gross margins and the reason for the higher-than-usual other operating income.

Answer

CEO Erez Israeli explained the weak PSAI margin was an accounting effect related to cost allocation from lower internal sales for back-integrated products, stating the underlying API business is healthy and will correct in coming quarters. CFO M V Narasimham clarified that the higher other income included out-licensing income from their Origin business, which he noted is a regular part of their business, not a one-off event.

Bino Pathiparampil asked about current price erosion for Revlimid, sought confirmation of the FY26 outlook for double-digit growth with stable margins, questioned the margin trajectory post-Revlimid cliff, and inquired about the drivers for the high CapEx in FY25 and the forecast for FY26.

Answer

CEO Erez Israeli confirmed some price erosion on Revlimid, offset by quantity increases, and reiterated the goal for double-digit growth in FY26 while maintaining current EBITDA margins. He affirmed the long-term margin target remains around 25% post-Revlimid. CFO Mannam Venkatanarasimham explained that the increased CapEx was driven by investments in peptides (GLP-1) and biosimilar facilities, and expects a similar level of spending in FY26.

Bino Pathiparampil requested an update on the status of the generic Lumify ANDA acquired from Slayback Pharma, asking about approval and launch timelines. He also asked for an update on the liraglutide peptide opportunity.

Answer

CEO Erez Israeli and Executive Richa Periwal confirmed that the generic Lumify product is approved. Richa Periwal added that the launch is expected to happen in the current quarter. Regarding peptides, Erez Israeli described liraglutide as a very important long-term segment where the company is investing in both API and finished goods globally, with plans to launch as soon as markets open.