Dr. Reddy's Reports 11% Revenue Growth to ₹8,545 Crore in Q1 FY26, Driven by NRT Portfolio and Branded Markets

2 min read     Updated on 23 Jul 2025, 05:49 PM
scanxBy ScanX News Team
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Overview

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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*this image is generated using AI for illustrative purposes only.

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:

  1. Expanded partnership with Alvotech for co-development, manufacture, and commercialization of pembrolizumab, a biosimilar candidate to Keytruda®.
  2. Collaborated with Sanofi to launch Beyfortus™ (Nirsevimab), a novel drug for preventing Respiratory Syncytial Virus (RSV) in India.
  3. 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 Day5 Days1 Month6 Months1 Year5 Years
+0.98%+1.62%-4.75%+6.70%-6.77%+59.11%
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Dr Reddy's Q1 Results Preview: Analysts Expect Revenue Growth Up to 19%, FDA Inspection Concludes Positively

1 min read     Updated on 22 Jul 2025, 05:29 PM
scanxBy ScanX News Team
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Overview

Dr Reddy's Laboratories is set to announce Q1 results on July 23. Analysts project mixed earnings with PAT estimates ranging from ₹1,399.00 crore to ₹1,659.00 crore, and revenue estimates between ₹8,491.00 crore and ₹9,094.00 crore. Growth drivers include steady domestic demand, strong US sales, Nicotinell acquisition, and favorable currency movements. The company received a positive FDA inspection outcome for its API facility in Middleburgh, New York, classified as 'Voluntary Action Indicated'.

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*this image is generated using AI for illustrative purposes only.

Dr Reddys Laboratories , a leading pharmaceutical company, is set to announce its Q1 results on July 23, with analysts projecting mixed earnings and strong revenue growth. Meanwhile, the company has received positive news regarding a recent FDA inspection.

Earnings Projections

Four brokerages have provided their estimates for Dr Reddy's Q1 performance:

Brokerage PAT Estimate (₹ Cr) PAT Growth (YoY) Revenue Estimate (₹ Cr) Revenue Growth (YoY)
Phillip Capital 1,659.00 14.00% 9,094.00 19.00%
Yes Securities 1,598.00 14.80% 8,616.00 12.00%
Kotak Equities 1,477.00 6.10% 8,491.00 10.30%
Nuvama 1,399.00 -2.00% 8,659.00 13.00%

The profit after tax (PAT) projections range from ₹1,399.00 crore to ₹1,659.00 crore, representing a year-over-year growth between -2.00% and 14.80%. Revenue estimates span from ₹8,491.00 crore to ₹9,094.00 crore, indicating an annual growth of 10.30-19.00%.

Growth Drivers

Analysts attribute the expected growth to several factors:

  1. Steady domestic demand: The Indian pharmaceutical market continues to show resilience.
  2. Strong US sales performance: Led by the trajectory of Revlimid, a key product in the US market.
  3. Nicotinell acquisition: Phillip Capital highlights the integration of the Nicotinell acquisition as a potential growth driver.
  4. Favorable currency movements: Expected to positively impact the company's financial performance.

FDA Inspection Update

In a recent development, Dr Reddy's Laboratories has received positive news regarding a United States Food and Drug Administration (USFDA) inspection. According to the company's disclosure to the stock exchanges:

  • The USFDA conducted a Good Manufacturing Practice (GMP) inspection at Dr Reddy's API facility in Middleburgh, New York.
  • The company has received the Establishment Inspection Report (EIR) from the USFDA.
  • The inspection outcome has been classified as 'Voluntary Action Indicated (VAI)'.
  • The USFDA has officially closed the inspection under 21 CFR 20.64(d)(3).

This positive outcome from the FDA inspection could potentially boost investor confidence in the company's quality control measures and regulatory compliance.

As investors and analysts await the official Q1 results on July 23, the market will be keen to see how Dr Reddy's actual performance aligns with these projections and how the recent FDA inspection outcome might influence the company's future prospects in the US market.

Historical Stock Returns for Dr Reddys Laboratories

1 Day5 Days1 Month6 Months1 Year5 Years
+0.98%+1.62%-4.75%+6.70%-6.77%+59.11%
Dr Reddys Laboratories
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