Dr. Reddy’s Q1 result: Net profit rises 2% YoY, revenue surges over 11%; check other key details

Dr. Reddy’s Laboratories on Wednesday, July 23, reported a 1.85% year-on-year (YoY) increase in its net profit at ₹1,417.8 crore in the June quarter of the 2025-26 financial year (Q1FY26).

In the corresponding period a year ago, it had clocked a profit of ₹1,392 crore.

The pharmaceutical company’s revenue from operations stood at ₹8,572 crore during the quarter under review, surging 11.37% YoY from ₹7,672.7 crore in the first quarter of FY25.

The revenue was aided by broad-based growth during the quarter, driven by contributions from the acquired consumer healthcare portfolio in nicotine replacement therapy (NRT) and sustained performance of its branded market, Dr Reddy’s said in a regulatory filing.

Its global generics business, which contributed 88% to its segment-wise revenue mix, generated ₹7,562 crore in revenue in the first quarter of FY26, growing 10% YoY from ₹6,885.8 crore in the year-ago period.

Dr. Reddy’s Laboratories’ revenue from its second biggest segment, Pharmaceutical Services and Active Ingredients (PSAI, contributing 10%), stood at ₹818.1 crore in the quarter, rising 7% YoY from ₹765.7 crore.

The company’s North America revenue for its global generic business declined 11% YoY to ₹3,412.3 crore, compared to ₹6,885.8 crore in Q1 FY25. The fall in revenue was primarily due to increased price erosion in certain key products, including lenalidomide.

However, its revenue from the European market (under its generic business) increased 142% to ₹1,274.4 crore from ₹526.5 crore, driven by revenues from the acquired NRT portfolio and incremental contributions from new product launches, though partly offset by price erosion.

Its Indian market revenue surged 11% YoY to ₹1,471.1 crore from ₹1,325.2 crore. Furthermore, its emerging markets revenue stood at ₹1,404.2 crore in Q1 FY26, jumping 18% YoY from ₹1,187.8 crore in the corresponding quarter, bolstered by increased volumes of existing products, gains from new launches across multiple countries and favourable foreign exchange.

At an operational level, the drug maker’s EBITDA (earnings before interest, tax, depreciation and amortisation) rose 5% YoY to ₹2,278 crore in Q1 FY26, compared to ₹2,159.9 crore in the year-ago period.

However, its EBITDA margin contracted to 26.7%, as against 28.2% in Q1 FY25.

Commenting on the results, G V Prasad, Co-Chairman & MD of Dr Reddy’s Lab, said, "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."

Key business highlights

• Dr Reddy’s Laboratories expanded its partnership with Alvotech to co-develop, manufacture and co-commercialise pembrolizumab, a biosimilar candidate to Keytruda®.

• It expanded collaboration with Sanofi to launch Beyfortus™ (Nirsevimab), a novel drug for preventing Respiratory Syncytial Virus (RSV) in India.

• It launched Sensimune in India, an immunotherapy product for house dust mite-induced allergies, in partnership with ALK-Abell6.

Shares of the company closed 0.65% higher at ₹1,248 apiece on the National Stock Exchange (NSE) on Wednesday.