# Dr Reddy's and Cipla face US market pressure Profitability declines continue despite strong product pipeline. - **Source:** [Economic Times](https://brifing.si/source/37791137-c35a-4ffe-b6a9-fe103afc9e48) - **Published:** 2026-07-27 - **Topic:** [Business](https://brifing.si/c/business) - **Original article:** - **On Brifing:** https://brifing.si/s/008cc71f-1b93-4c22-8f15-1e484fc4dae0 ## Decline in the US market Dr Reddy's and Cipla experienced significant declines in profitability due to the downturn in the US market during the June quarter. Both companies reported double-digit drops in net profit and operating margins. ## Local market performance Both companies' domestic businesses in India performed well, helping to offset some of the challenges faced in the US. The local market remains a stronghold for these firms. ## Obesity therapies and product launches Obesity therapies, respiratory products, and biosimilars are emerging as key growth drivers for the upcoming quarters. Cipla has gained early traction in obesity management with Yurpeak, licensed from Eli Lilly. ## Profitability pressures Operating margins for Dr Reddy's and Cipla have significantly narrowed. Dr Reddy's Ebitda margin dropped to 12.5%, while Cipla's fell to 16.7%, highlighting the profitability challenges both companies face. ## Future expectations Analysts have reduced earnings forecasts for both companies by 6-8% for the upcoming fiscal years. The stocks of Dr Reddy's and Cipla are expected to remain range-bound in the short term. ## Growth strategies Despite the challenges in the US market, both companies remain optimistic about the future. New product launches and therapies are central to their long-term growth strategies. ## Sources covering this story - https://economictimes.indiatimes.com/markets/stocks/earnings/us-market-drag-keeps-dr-reddys-cipla-under-pressure-despite-strong-product-pipeline/articleshow/132650538.cms — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._