Dr. Reddy's Reports 11% Revenue Growth to ₹8,545 Crore in Q1 FY26, Driven by NRT Portfolio and Branded Markets
Dr Reddy's Laboratories reported consolidated revenues of ₹8,545 crore for Q1 FY26, up 11% year-over-year. Global Generics segment grew 10%, with Europe showing 142% growth. North America revenues declined 11% due to price erosion in key products. Profit after Tax increased 2% YoY to ₹1,418 crore. The company expanded partnerships for biosimilars and launched new products in India. Management remains focused on strengthening the base business amid challenges in the U.S. generics market.

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Dr Reddys Laboratories , a global pharmaceutical company headquartered in Hyderabad, has reported a strong performance for the first quarter of fiscal year 2026, with consolidated revenues reaching ₹8,545 crore, marking an 11% year-over-year growth. The company's financial results, released on July 23, 2025, highlight its resilience in the face of challenging market conditions.
Key Financial Highlights
- Consolidated revenues: ₹8,545 crore (Up 11% YoY; Flat QoQ)
- Gross Margin: 56.9% (Q1 FY25: 60.4%; Q4 FY25: 55.6%)
- EBITDA: ₹2,278 crore (26.7% of Revenues)
- Profit before Tax: ₹1,905 crore (22% of Revenues)
- Profit after Tax: ₹1,418 crore attributable to Equity Holders (Up 2% YoY; Down 11% QoQ)
Segment-wise Performance
The company's performance across various segments showed mixed results:
Segment | Revenue (₹ Crore) | YoY Growth |
---|---|---|
Global Generics | 7,562 | 10% |
North America | 3,412 | -11% |
Europe | 1,274 | 142% |
India | 1,471 | 11% |
Emerging Markets | 1,404 | 18% |
PSAI | 818 | 7% |
Growth Drivers and Challenges
The company's double-digit growth was primarily driven by contributions from the acquired Consumer Healthcare portfolio in Nicotine Replacement Therapy (NRT) and sustained performance in branded markets. However, the North American market faced challenges, with revenues declining by 11% year-over-year due to increased price erosion in certain key products, including Lenalidomide.
Europe saw a significant revenue boost of 142% year-over-year, largely attributed to the acquired NRT business. India and Emerging Markets continued to show strong growth at 11% and 18% respectively, driven by new product launches and increased volumes of existing products.
Strategic Developments
Dr. Reddy's has made several strategic moves during the quarter:
- Expanded partnership with Alvotech for co-development, manufacture, and commercialization of pembrolizumab, a biosimilar candidate to Keytruda®.
- Collaborated with Sanofi to launch Beyfortus™ (Nirsevimab), a novel drug for preventing Respiratory Syncytial Virus (RSV) in India.
- Launched Sensimune in India, an immunotherapy product for house dust mite-induced allergies, in partnership with ALK-Abelló.
Management Commentary
Co-Chairman & MD, G V Prasad, commented on the results: "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. The pricing pressure on Lenalidomide is expected to intensify in the U.S. generics market. We remain focused on strengthening our base business by delivery of our pipeline assets, improving overall productivity and business development."
Future Outlook
While Dr. Reddy's has shown robust growth in several markets, the company faces challenges in the U.S. generics market, particularly with pricing pressure on key products like Lenalidomide. The management's focus on strengthening the base business, delivering pipeline assets, and improving productivity indicates a strategic approach to navigating these challenges.
The company's diverse geographical presence and product portfolio, coupled with its focus on innovation and strategic partnerships, position it well for continued growth. However, the evolving market dynamics, especially in the U.S., will require careful navigation in the coming quarters.
Historical Stock Returns for Dr Reddys Laboratories
1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
---|---|---|---|---|---|
+0.98% | +1.62% | -4.75% | +6.70% | -6.77% | +59.11% |