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Informist, Tuesday, May 12, 2026

--Dr Reddy's Jan-Mar consol net profit INR 2.21 bln 
--Analysts saw Dr Reddy's Jan-Mar consol net profit at INR 8.95 bln 

--Dr Reddy's Jan-Mar consol revenue INR 75.46 bln 

--Analysts saw Dr Reddy's Jan-Mar consol revenue at INR 82.69 bln 

--Dr Reddy's Jan-Mar consol net profit INR 2.21 bln vs INR 15.93 bln yr ago 

--Dr Reddy's Jan-Mar consol revenue INR 75.46 bln vs INR 85.28 bln year ago 

--Dr Reddy's to pay INR 8 per share final dividend 

--Dr Reddy's final dividend record date Jul 10 

--Dr Reddy's FY26 consol net profit INR 41.96 bln vs INR 56.55 bln yr ago 

--Dr Reddy's Jan-Mar consol EBITDA INR 9.81 bln vs INR 24.75 bln year ago 

--Dr Reddy's FY26 consol revenue INR 337.00 bln vs INR 326.44 bln year ago 

--Dr Reddy's Jan-Mar consol EBITDA margin 13.0% vs 29.1% year ago 

--Dr Reddy's Jan-Mar consol gross profit margin at 44.8% vs 55.6% year ago 
--Dr Reddy's Q4 global generics sales INR 65.80 bln, down 13% on year 

--Dr Reddy's Q4 N America generics sales INR 17.56 bln, down 51% on yr 
--Dr Reddy's Q4 Europe generics sales INR 14.52 bln, up 14% on yr 

--Dr Reddy's Q4 India generics revenue INR 15.66 bln, up 20% on yr 

--Dr Reddy's Q4 emerging markets generics revenue INR 18.06 bln, up 29% on yr 

--Dr Reddy's Jan-Mar consol R&D expenses INR 5.46 bln vs INR 7.26 bln yr ago 

--Dr Reddy's consol R&D costs made 7.3% of sales in Jan-Mar vs 8.5% yr ago 

--Dr Reddy's took hit of INR 4.53 bln Q4 due to shelf stock adjustment claim 

--Dr Reddy's Jan-Mar capex INR 4.4 bln 

--Dr Reddy's Q4 shelf stock adjustment due to low Lenalidomide price in US 

--Dr Reddy's: Q4 R&D costs fell due to low development spends in biosimilars 

--Dr Reddy's Q4 net profit includes impairment loss of INR 2.28 bln 

 

By Gunjan Rajput and Eshitva Prakash

 

NEW DELHI – Dr. Reddy's Laboratories Ltd. on Tuesday reported a sharp year-on-year decline in consolidated net profit for the March quarter as weak sales from North America, impairment losses, and shelf stock adjustment related to cancer-based drug Lenalidomide in the US market hit earnings. Due to this, the company's net profit missed analysts' expectations by a wide margin. 

 

The drugmaker's consolidated net profit for the March quarter fell over 86% to INR 2.21 billion from INR 15.93 billion a year ago. The March quarter marks the second consecutive quarterly decline in net profit. The profit was significantly lower than analysts' estimate of INR 8.95 billion. The net profit included an impairment loss of INR 2.28 billion related to Chimeric Antigen Receptor T-cell therapy and discontinuation of phase 3 study of non-small cell lung cancer conducted by lmmutep Ltd.

 

The company's revenue from operations declined nearly 12% on year to INR 75.46 billion from INR 85.28 billion a year ago, missing analysts' estimate of INR 82.69 billion. This is the first decline in quarterly revenue in more than two and half years. 

 

The company said it took a hit of INR 4.53 billion during the quarter due to a shelf stock adjustment claim arising from lower prices of Lenalidomide in the US market. Pharmaceutical companies incur a shelf stock adjustment cost when they have to pay distributors for a fall in on-hand inventory prices to improve volumes or protect themselves against competing suppliers. The primary patent of Lenalidomide drug, sold under the brand name Revlimid, expired in 2019 and limits on US volumes were removed in January, leading to a sharp drop in the drug's price and in the market share of Indian companies. 

 

The pharma company's consolidated earnings before interest, tax, depreciation, and amortisation fell over 60% to INR 9.81 billion from INR 24.75 billion a year ago. The EBITDA margin narrowed to 13.0% from 29.1% a year earlier, while the gross profit margin declined to 44.8% from 55.6%. The company's EBITDA margin declined 6.5% due to the aforementioned one-off costs and its gross margin was hit 3.2% in the March quarter due to these expenses. 

 

The company's research and development expenses fell nearly 25% to INR 5.46 billion from INR 7.26 billion a year ago and accounted for 7.3% of sales compared with 8.5% a year earlier. The company attributed the decline to lower development spending in biosimilars. The company incurred a cost of INR 4.4 billion as capital expenditure in the March quarter.

 

GEOGRAPHIES

The company's global generics revenue fell 13% on year to INR 65.80 billion in the quarter. The company's revenue growth from generics was healthy across geographies, barring North America. Favourable foreign exchange rates supported overall growth, the company said. 

 

North America generics sales plunged 51% to INR 17.56 billion due to pricing pressure and the Lenalidomide-related impact. Excluding one-off costs, US revenues declined 38% on year and 25% sequentially in the March quarter, the company said. During the March quarter, the company launched seven new products in the US, taking the total to 25 new products launched during FY26. 

 

Generics revenue from India increased 20% to INR 15.66 billion. Revenue growth was driven by new brand launches, including innovation portfolio, price increases, higher volumes, and contributions from recently acquired portfolios. In the March quarter, Dr. Reddy's launched 10 new brands, taking the total new launches to 28 for FY26.

 

The company's generic drugs sales in Europe rose 14% on year to INR 14.5 billion, helped by contributions from its nicotine replacement therapy portfolio, revenues from new generic product launches, and higher volumes. Pricing pressure in generic drugs limited revenue growth in Europe, the company said. Nicotine replacement therapy sales rose 16% on year to INR 7 billion. During the quarter, the company launched seven new products in the region, taking the total to 38 for FY26.

 

Generic drug sales in emerging markets climbed 29% to INR 18.06 billion. Its generic drug sales rose 28% on year to INR 8.4 billion in Russia, supported by new launches, price increases in certain brands and favourable foreign exchange. Sequentially, the drop in volume uptake in Russia hit the company's revenue in the emerging markets segment, which dropped 5% on quarter.

 

The company earned INR 9.1 billion from sales of pharmaceutical services and active ingredients in the March quarter, down 5% on year due to lower volume uptake in its active pharmaceutical ingredients business. During the quarter, the company filed 48 Drug Master Files, taking the total to 128 for FY26.

 

For FY26, Dr. Reddy's reported a consolidated net profit of INR 41.96 billion, down almost 26% on year. Its revenue for the period rose over 3% on year to INR 337.00 billion. On Tuesday, shares of the company ended 0.8% lower at INR 1,270 on the National Stock Exchange. Its board approved a dividend of INR 8 per share. To determine which shareholders are eligible for this dividend, the record date has been set to Jul. 10.  End

 

US$1 = INR 95.63

 

Edited by Avishek Dutta

 

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