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Informist, Wednesday, Jan. 21, 2026

 

--Dr Reddy's Oct-Dec consol EBITDA margin, ex-labour code impact, 24.8%

--Dr Reddy's: Saw impact of INR 1.17 bln in Oct-Dec due to new labour codes

--Dr Reddy's: Q3 North America sales down on price erosion in some products

--Dr Reddy's: Q3 North America sales down on yr due to lower Revlimid sales

--Dr Reddy's: Oct-Dec capex INR 6.7 bln vs INR 5.1 bln quarter ago

--Dr Reddy's Oct-Dec consol R&D expenses INR 6.15 bln vs INR 6.66 bln yr ago

--Dr Reddy's Oct-Dec emerging markets revenue INR 19 bln, up 32% on year

--Dr Reddy's Oct-Dec India generics revenue INR 16 bln, up 19% on year

--Dr Reddy's Apr-Dec consol revenue INR 261.54 bln vs INR 241.16 bln year ago

--Dr Reddy's Oct-Dec Europe generics sales INR 14.5 bln, up 20% on year

--Dr Reddy's Oct-Dec N America generics sales INR 29.6 bln, down 12% on year

--Dr Reddy's Apr-Dec consol net profit INR 39.75 bln vs INR 40.62 bln yr ago

--Dr Reddy's Oct-Dec global generics sales INR 79.1 bln, up 7% on year

--Dr Reddy's Oct-Dec consol gross profit margin at 53.6% vs 58.7% year ago

--Dr Reddy's Oct-Dec consol EBITDA margin 23.5% vs 27.5% year ago

--Dr Reddy's Oct-Dec consol EBITDA INR 20.49 bln vs INR 22.98 bln year ago

--Dr Reddy's Oct-Dec consol revenue INR 87.53 bln vs INR 83.81 bln year ago

--Dr Reddy's Oct-Dec consol net profit INR 12.10 bln vs INR 14.14 bln yr ago

--Analysts saw Dr Reddy's Oct-Dec consol revenue at INR 83.45 bln

--Dr Reddy's Oct-Dec consol revenue INR 87.53 bln

--Analysts saw Dr Reddy's Oct-Dec consol net profit at INR 11.23 bln

--Dr Reddy's Oct-Dec consol net profit INR 12.1 bln

 

By Narayana Krishna

 

HYDERABAD - Dr. Reddy's Laboratories Ltd. Wednesday reported a consolidated net profit of INR 12.10 billion for the December quarter, down 14.4% on-year. The company's net profit fell after four consecutive quarters of growth.

 

The revenue for the quarter was up by 4.4% on year to INR 87.53 billion. The revenue growth is the slowest in the last 21 quarters. However, both net profit and revenue are above the Street's estimates. Analysts had estimated Dr. Reddy's Oct-Dec consolidated net profit at INR 11.23 billion on a revenue of INR 83.45 billion.

 

Dr. Reddy's December quarter earnings performance was impacted by weak sales in North America, mainly in the US. The company reported a 12% on year and 9% on quarter fall in its North America sales to INR 29.6 billion. The fall in sales is mainly on account of lower sales of the generic cancer drug Revlimid.

 

"Our growth in Q3 FY26 (Oct-Dec was supported by continued momentum in our branded business, aided by favorable forex, thus offsetting the impact of lower lenalidomide (Revlimid) sales," G.V. Prasad, managing director, said in a release.

 

On a trailing basis, the company's net profit fell 10.2% and the revenue was down nearly 1%.  

 

Overall, the company's revenue from generics business was INR 79.1 billion in the December quarter, up 7% on year. Within the generics business, the revenue from Europe rose 20% on year to INR 14.5 billion. Among other regions, revenue from India rose 19% on year to INR 16 billion while that from emerging markets was up 32% on year to INR 19 billion.

 

The company's operating profit improved on year, but margins were down likely due to lower prices of products in the US. Its consolidated earnings before interest, taxes, depreciation, and amortisation fell nearly 11% on year to INR 20.49 billion. Its consolidated EBITDA margin fell 400 basis points to 23.5% and gross margin was down 510 bps to 53.6%. The new labour codes saw the company make provisions to the tune of INR 1.17 billion in the December quarter. Excluding the labour code impact, the consolidated EBITDA margin for the company was 24.8% for the quarter under review.

 

A double-digit rise in consolidated expenses during the quarter affected Dr. Reddy's profit. Its expenses rose a little more than 12% on year to INR 74.81 billion, largely on account of higher cost of material. Its purchase of stock-in-trade rose nearly 47% on year to INR 15.42 billion.

 

The company spent INR 6.15 billion on research and development in the December quarter, nearly 8% lower compared to the last year. It spent INR 6.7 billion as capital expenditure during the quarter, higher than INR 5.1 billion in the September quarter.

 

For the nine months ended December, the company's consolidated net profit fell 17% on year to INR 39.75 billion. Revenue for the same period was up nearly 8% at INR 261.54 billion. Wednesday, shares of the company closed at INR 1,157.20 on the National Stock Exchange, down nearly 1%.  End

 

Edited by Vandana Hingorani

 

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