Dr Reddy’s Q2 Results: Net profit falls 36% YoY to Rs 913 crore, revenue declines marginally

Generic drugmaker Dr Reddy's Laboratories reported a 36% year-on-year (YoY) decline in net profit to Rs 913.4 crore for the September quarter, compared with Rs 1,426.8 crore in the corresponding quarter last year.

Revenue fell 1.5% YoY to Rs 8,671 crore from Rs 8,805.1 crore. EBITDA declined 24.2% to Rs 1,783 crore from Rs 2,351.1 crore, while the EBITDA margin contracted to 20.6% from 26.7% a year earlier, according to the exchange filing submitted by the company.

Segment performance

Revenue from Global Generics declined 1% YoY to Rs 7,792.7 crore in the September quarter, compared with Rs 7,849.8 crore in the year-ago period.

Within the segment, North America revenue fell 23% to Rs 2,489 crore, while Emerging Markets revenue rose 24% to Rs 2,059.5 crore. India revenue increased 17% to Rs 1,850.8 crore, while Europe revenue grew 1% to Rs 1,393.5 crore.

Revenue from Pharmaceutical Services and Active Ingredients (PSAI) declined 12% YoY to Rs 831 crore from Rs 945 crore. Revenue from other segments rose to Rs 47.1 crore from Rs 10.3 crore in the corresponding quarter last year.

First-half performance

For the first half of FY27, Global Generics revenue declined 3% YoY to Rs 14,992 crore.

North America revenue fell 29% to Rs 4,693.8 crore, while Emerging Markets revenue increased 27% to Rs 3,892.3 crore. India revenue grew 17% to Rs 3,568.4 crore, and Europe revenue rose 7% to Rs 2,837.5 crore.

PSAI revenue declined 5% YoY to Rs 1,682.9 crore during the first half, while revenue from other segments fell 62% to Rs 66.4 crore.

Total revenue for the first half declined 4% to Rs 16,741.3 crore from Rs 17,350.3 crore a year earlier.

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Key business highlights

During the September quarter, Dr Reddy’s Laboratories partnered with Takeda for QDENGA, a dengue vaccine approved by India’s Central Drugs Standard Control Organisation (CDSCO).

The company expanded its collaboration with Gilead Sciences for lenacapavir, an investigational once-yearly HIV prevention drug, across 120 countries.

In collaboration with the GARDP Foundation, Dr Reddy’s secured approval from the Thai Food and Drug Administration for zoliflodacin, an antibiotic for uncomplicated urogenital gonorrhoea. The approval came within six months of clearance from the United States Food and Drug Administration (USFDA).

The company also secured USFDA approval for its rituximab biosimilar for the US market and launched its nivolumab biosimilar in India. It received India’s first biosimilar approval for intravenous abatacept.

Dr Reddy’s launched sugammadex injection in the US as a hospital drug in 200 mg/2 mL and 500 mg/5 mL single-dose vials. Generic semaglutide was approved in 10 countries across Latin America, Africa and the Middle East, as well as in Canada and India.

Its contract development and manufacturing organisation (CDMO) business, operated through Aurigene Pharmaceutical Services Limited (APSL), generated revenue of more than $100 million in the 12 months ended September 2026.

APSL also secured a strategic long-term manufacturing and supply agreement with a leading global pharmaceutical company covering the US, Europe, Canada and emerging markets.

ESG highlights

Dr Reddy’s received a Silver medal from FinanceAsia in the Best Large Cap Company in India category at Asia’s Best Companies 2026.

The company’s CRISIL ESG rating improved to 73/100 for FY26 from 66/100 in FY25, making it the only pharmaceutical company in the leadership category.

Management commentary

Commenting on the results, Co-Chairman and Managing Director G V Prasad said, “We continued to improve the overall health of our business, delivering double-digit base business growth and EBITDA margins of over 20% during the quarter. We remain focused on strengthening our core businesses, enhancing productivity, and investing in strategic growth platforms to deliver consistent performance, while creating long-term value drivers.”

Dr Reddy’s Laboratories share price

Dr Reddy’s Laboratories shares ended Friday’s session on the NSE at Rs 1,229.50, down 0.77% from the previous close of Rs 1,239. The stock traded between Rs 1,215.60 and Rs 1,250.60 during the session.

The stock has declined nearly 2% so far in 2026, according to NSE data. It has a 52-week trading range of Rs 1,101 to Rs 1,414.90.

At the current market price, Dr Reddy’s Laboratories had a market capitalisation of Rs 1,02,623.94 crore.

Disclosure: This article has been written by Kumar Gaurav, who is not a Sebi-registered Research Analyst or an Investment Adviser. Gaurav and their ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective Sebi-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here
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