On Thursday, Dr. Reddy's Laboratories Ltd (NYSE:RDY) stock is trading lower after the company released third-quarter 2025 earnings.

The pharma company clocked a net income of $165 million, marginally up from $161 million a year ago. Revenue increased from $843 million to $977 million — almost a 16% jump.

The growth was largely driven by revenues from the recently acquired Nicotine Replacement Therapy (NRT) portfolio, as well as revenues from India and Emerging Markets.

The NRT portfolio consists of brands such as Nicotinell, Nicabate, Habitrol, and Thrive, which are available in gum, lozenge, and patch forms across over 30 markets. 

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"We delivered double-digit growth aided by our newly acquired NRT business, new launches, and improved operational efficiencies," Co-Chairman & MD, G V Prasad, said.

Global generics revenues reached $850 million (73.75 billion rupees), showing a 17% year-over-year growth; underlying growth excluding NRT is 7%. Revenues from the acquired NRT portfolio, higher volumes and new product launches largely drove growth.

North American sales increased 1% (a sequential decline of 9%) to 33.8 billion rupees. Volume growth coupled with new product launches and favorable forex was offset by price erosion on a YoY basis. The sequential decline was largely due to lower sales of certain products, including Lenalidomide.

Gross Margin at 58.7% (GG: 61.3%, PSAI: 28.6%), a YoY increase of 20 basis points (bps), and a QoQ decline of 91 bps. The YoY increase was primarily due to a favorable product mix and manufacturing overhead leverage, which was partly offset by price erosion. Sequentially, the decline was primarily due to an unfavorable product mix.

Price Action: RDY stock is down 5.80% at $14.22 at the last check on Thursday.

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