Dr. Reddy’s Q4 results: Firm sees steep fall of 86% in net profit, revenue slips to ₹7,546 crore YoY

Dr Reddy’s Laboratories posted a steep decline of 86% in its consolidated net profit at ₹221 crore for the quarter ended March 31 of the fiscal year 2025-26 (Q4 FY26) as compared to ₹1,589 crore for the same quarter of the previous fiscal year.

The company’s net profit declined due to multiple one-off impacts during the period. It recorded an impairment loss of ₹53.5 crore on property, plant and equipment, along with inventory-related provisions of ₹26 crore and development programme wind-down costs of ₹12.9 crore.

Although there was a gain of ₹87.7 crore from the write-back of liabilities no longer required, it was not enough to offset the overall impact of these charges, Dr Reddy’s Laboratories said in a statement.

The company’s revenue from operations stood at ₹7,546 crore year-on-year (YoY) for the quarter under review as compared to ₹8,528 crore, marking a decrease of 11.5%. Its FY26 consolidated revenues came in at ₹33,590 crore, a growth of 3.2% YoY.

The growth in FY26 revenue was broad-based across key markets, except for North America, which declined primarily on account of lower Lenalidomide sales and a one-time Shelf Stock Adjustment (SSA) of ₹450 crore related to the product, the firm said. Favourable foreign exchange rate movements further supported overall growth, it added.

The drugmaker’s operating profit, or earnings before interest, taxes, depreciation, and amortisation (EBITDA), slipped 81% to ₹382 crore as against ₹1,998 crore YoY.

In Q2 FY26, the firm’s margin contracted to 5.06% in contrast to 23.42% reported in the same quarter last fiscal year.

Dr Reddy's Laboratories reported a gross margin of 52.8% in FY26, down 573 basis points (bps) annually. The decline was driven by lower sales of lenalidomide, price erosion in North American and European generics, and a one-time SSA impact, along with an additional one-time provision related to the new Labour Code in Q3 FY26.

Along with its earnings, the board of directors of the drug-making firm has recommended a final dividend of ₹8 per equity share of face value ₹1 each for FY 2025–26, subject to shareholder approval at the upcoming Annual General Meeting. The record date to determine eligible shareholders for the dividend has been fixed as July 10, 2026.

The company has also approved convening its AGM on July 23, 2026.

Commenting on the results, Co-Chairman & MD, G. V. Prasad, said: “Our performance this year reflects the impact of lower lenalidomide sales and several one-offs. The resilience of our branded businesses and currency tailwinds helped partially mitigate this impact. We remain focused on strengthening our base business and improving margins through cost efficiencies and portfolio optimisation. In parallel, we continue to build long-term franchises in biosimilars, consumer health and innovation to deliver sustainable value.”

During the quarter, Dr Reddy’s Laboratories launched ten new brands, taking the total to 28 for FY26.

On Tuesday, shares of the firm closed at ₹1,270 apiece on NSE, falling 0.77%.