“If they kind of get this done in the next one month, that should not meaningfully impact expectations that people have for FY27 or FY28,” he said.
Dr Reddy’s recently disclosed a temporary delay in commercial supplies of semaglutide after certain batches were found to be out of specification due to an active pharmaceutical ingredient (API) issue, raising concerns over the rollout of its weight-loss and diabetes drug.
The stock was trading at ₹1,270 at 1:28 pm on the NSE and its shares have remained flat over the last year.
The company said it is investigating the root cause and has taken corrective measures to ensure product quality. It also clarified that there is no impact on patient safety or its existing global regulatory filings and will host a conference call to address investor queries.
Manchanda said semaglutide is a technically complex peptide product, making manufacturing scale-up challenges relatively common. He believes the impact on earnings will depend on how quickly the company restores normal production.
However, he cautioned that a longer disruption could affect both revenue expectations and competitive positioning as more players enter the market.
Systematix currently estimates around $100 million in semaglutide revenue for Dr Reddy’s in FY27. While the brokerage does not expect to revise its forecasts if production resumes quickly, prolonged delays could force earnings downgrades.
According to Manchanda, extended supply constraints may allow competitors to gain market share during a critical ramp-up phase, making it harder for Dr Reddy’s to recover lost ground later.
He also noted that contract manufacturing partners involved in the semaglutide supply chain, including sterile fill-and-finish and delivery device suppliers, are relatively protected because of take-or-pay agreements with customers.
On the broader weight-loss drug market, Manchanda expects generic manufacturers to capture the bulk of volumes in India despite the presence of innovator brands. He estimates generics could eventually account for 70-75% of the market unless innovator companies sharply reduce prices.
“At the lowest end of the range, probably generics would be one-third of the innovator price,” he said, adding that there has been no visible reduction in list prices by innovator companies so far.
For full interview, watch accompanying video
