India’s Divi’s Laboratories reported first-quarter profit below estimates on Wednesday, as manufacturers producing generic drugs continued to be negatively impacted by pricing pressures in the key U.S. market, sending shares down 3.3%.
The Hyderabad-based company’s consolidated net profit rose 26.7% to 5.45 billion rupees ($62 million) for the quarter ended June 30.
Analysts, on average, had expected 5.75 billion rupees, as per data compiled by LSEG.
Indian generic drugmakers, which get a significant chunk of their revenue from the U.S., have been grappling with weak pricing amid stiff competition in the region.
Divi’s, one of India’s largest manufacturers of active pharmaceutical ingredients (API), has flagged pricing pressure and high competition in its generics business in global markets, adding that it aims to increase its market share by launching molecules as they get off patent.
APIs are key chemical components in a drug that produce the intended therapeutic effects. Divi’s exports to more than 100 countries, with the U.S. and Europe being its core markets
The company’s shares were down 2.5% before the news, in tandem with the rest of the pharma stocks on U.S. President Donald Trump’s potential tariff threat.
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The drugmaker’s peers Cipla and Dr Reddy’s also reported subdued June-quarter sales in the U.S.
Revenue from operations for Divi’s rose 14% to 24.10 billion rupees, also missing analysts’ estimates of 24.56 billion rupees.
The company is banking on demand from diabetes and weight-loss drugs manufacturers such as Eli Lilly, who cater to skyrocketing customer demand for the drug in global markets.
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