Dr. Reddy's records Rs.2,397 million provision for out-of-spec semaglutide
The provision, tied to an API issue, was booked within inventory write-downs during the June quarter, as cost of revenues and inventory write-downs both rose year over year.
Dr. Reddy's Laboratories disclosed in its quarterly report for the period ended June 30, 2026 that certain batches of Semaglutide were found to be out of specification due to an issue associated with the active pharmaceutical ingredient (API) used in the product.1 As a result, the company made a provision of Rs.2,397 million toward inventory and other associated costs during the three months ended June 30, 2026.1
This charge is reflected in the company's inventory write-down figures. Inventory write-downs for the quarter totaled Rs.3,451 million, compared to Rs.1,635 million in the same period a year earlier.1
Total cost of revenues for the quarter was Rs.43,165 million, compared to Rs.36,825 million for the three months ended June 30, 2025.1 The Rs.2,397 million semaglutide provision sits within that broader inventory write-down line, but the filing does not state how much of the overall cost of revenues increase is attributable specifically to the semaglutide issue relative to other factors affecting cost of revenues that quarter.
Gross profit for the quarter fell to Rs.37,540 million from Rs.48,627 million a year earlier, on revenues of Rs.80,705 million versus Rs.85,452 million.1 The filing does not provide further detail on remediation steps, affected markets, or expected duration of the quality issue beyond the provision disclosure itself.
Written by readthrough’s AI from the linked primary sources and fact-checked against them automatically before publishing. Not investment advice.