USFDA Flags Issues at Dr Reddy’s Hyderabad API Facility

Dr Reddy’s Laboratories announced on Tuesday, February 25, that the United States Food and Drug Administration (USFDA) identified certain issues at its active pharmaceutical ingredient (API) manufacturing facility (CTO-2) in Bollaram, Hyderabad. The regulator has advised the company to address and resolve these concerns.

USFDA Inspection and Classification

In a regulatory filing, Dr Reddys Lab stated that it received the Establishment Inspection Report (EIR) from the USFDA following an inspection conducted at the facility. The inspection, which was previously disclosed on November 19, 2024, has now been classified as Voluntary Action Indicated (VAI) by the USFDA.

A VAI classification means that while the inspection identified some issues, the FDA will not take immediate enforcement action. Instead, the company is expected to voluntarily address and rectify the concerns raised. Additionally, the FDA has marked the inspection as “closed”, indicating that no further regulatory steps are required at this stage.

Financial Performance in Q3 FY25

Despite regulatory scrutiny, Dr Reddy’s Laboratories delivered strong financial results for the third quarter ending December 31, 2024.

The company reported a 2.5% year-on-year (YoY) increase in net profit to ₹1,413.3 crore, compared to ₹1,379 crore in the same quarter of the previous fiscal.

Revenue from operations grew 15.9% YoY to ₹8,358.6 crore, up from ₹7,215 crore in Q3 FY24. At the operating level, EBITDA rose 8.9% to ₹2,298.2 crore, compared to ₹2,111 crore in Q3 FY24.

Stock Performance

On February 27, 2025, Dr Reddy’s Labshare price traded 0.23% higher at ₹1,129.15 at 9:24 AM (IST). Dr Reddy’s Lab’s share price reached a 52-week high of ₹1,420.20, and a 52-week low of ₹1,120.01. As per BSE, the total traded volume for the stock stood at 4997 shares with a turnover of ₹56.44 lakhs.

At the current price, Dr Reddy’s Lab shares are trading at a price-to-earnings (P/E) ratio of 18.16x, based on its trailing 12-month earnings per share (EPS) of ₹62.12, and a price-to-book (P/B) ratio of 3.50, according to exchange data.

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