Dr. Reddy’s Q1FY26 profit up 2% YoY ₹1,418 cr; price erosion in US generics weighs on margins
Mumbai: Dr. Reddy's Laboratories posted a 2% year-on-year rise in consolidated net profit to ₹1,418 crore for the quarter ended June, The Economic Times reported.
Revenue from operations increased 11% YoY to ₹8,545 crore, driven by broad-based growth, including contributions from its acquired Nicotine Replacement Therapy (NRT) consumer healthcare portfolio and stable performance across branded markets.
However, profit fell 11% quarter-on-quarter, and revenue remained flat sequentially.
EBITDA grew 5% YoY to ₹2,280 crore, but margins dropped by 530 basis points to 56.9%, mainly due to pricing pressure in the generics business and reduced operating leverage.
This was partly offset by a favourable product mix.
“We delivered double-digit growth this quarter over the same period last year, reflecting our strength in branded markets and positive momentum in the Nicotine Replacement Therapy portfolio,” said Co-Chairman & MD GV Prasad.
The Global Generics segment generated ₹7,560 crore in revenue, marking a 10% YoY increase and remaining flat QoQ.
In North America, revenue dropped 11% YoY to ₹3,410 crore, primarily due to heightened price erosion in key products such as Lenalidomide.
The company launched five new products in the US during the quarter and filed one abbreviated new drug application (ANDA) with the USFDA.
Europe revenue surged 142% YoY to ₹1,270 crore, aided by the NRT acquisition and new product launches, though some gains were offset by price erosion.
Quarter-on-quarter, Europe performance remained stable, supported by foreign exchange gains and volume increases.
India revenues rose 11% YoY to ₹1,470 crore, supported by new product introductions, price hikes, and improved commercial execution. The company launched five new brands in the domestic market during the quarter.
Revenues from emerging markets grew 18% YoY, buoyed by higher volumes, new launches across multiple countries, and forex tailwinds.
In the pharmaceutical services and active ingredients (PSAI) segment, revenue rose 7% YoY to ₹820 crore.
Growth came from new API launches and favourable exchange rates, though pricing weakness and tepid demand weighed on performance.
Dr. Reddy’s cautioned that pricing pressure on Lenalidomide in the US generics market is expected to intensify.
“We remain focused on strengthening our base business by delivery of our pipeline assets, improving overall productivity and business development,” the company added.
On Wednesday, shares of Dr. Reddy's closed 0.6% higher at ₹1,248 on the NSE.
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