HYDERABAD, India--(BUSINESS WIRE)--July 23, 2025--
Dr. Reddy's Laboratories Ltd. (BSE: 500124 | NSE: DRREDDY | NYSE: RDY | NSEIFSC: DRREDDY) today announced its consolidated financial results for the quarter ended June 30, 2025. The information mentioned in this release is based on consolidated financial statements under International Financial Reporting Standards (IFRS).
Q1 FY26
------------------------------------------------------------------
Revenues 85,452 Mn
[Up: 11% YoY; Flat QoQ]
-------------------------------- --------------------------------
Gross Margin 56.9%
[Q1FY25: 60.4%; Q4FY25: 55.6%]
-------------------------------- --------------------------------
SG&A Expenses 25,647 Mn
[Up: 13% YoY; 7% QoQ]
-------------------------------- --------------------------------
R&D Expenses 6,244 Mn
[7.3% of Revenues]
-------------------------------- --------------------------------
EBITDA 22,784 Mn
[26.7% of Revenues]
-------------------------------- --------------------------------
Profit before Tax 19,047 Mn
[Up: 1% YoY; Down 5% QoQ]
-------------------------------- --------------------------------
Profit after Tax 14,178 Mn
attributable to Equity Holders [Up: 2% YoY; Down 11% QoQ
-------------------------------- --------------------------------
Commenting on the results, Co-Chairman & MD, G V Prasad 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."
All amounts in millions, except EPS All US dollar amounts based on convenience translation rate of 1 USD = 85.74
Dr. Reddy's Laboratories Limited & Subsidiaries
Revenue Mix by Segment for the quarter
YoY QoQ
Particulars Q1FY26 Q1FY25 Gr % Q4FY25 Gr%
( ) ( ) ( )
Global Generics 75,620 68,858 10 75,365 0
North America 34,123 38,462 (11) 35,586 (4)
Europe 12,744 5,265 142^ 12,750 0
India 14,711 13,252 11 13,047 13
Emerging Markets 14,042 11,878 18 13,981 0
Pharmaceutical Services and Active
Ingredients (PSAI) 8,181 7,657 7 9,563 (14)
Others 1,651 212 678 132 1149
Total 85,452 76,727 11 85,060 0
^Excluding Consumer healthcare $(NRT)$ sales; YoY revenue growth is at 15%
Consolidated Income Statement for the quarter
YoY QoQ
Particulars Q1FY26 Q1FY25 Gr % Q4FY25 Gr%
($) ( ) ($) ( ) ($) ( )
Revenues 997 85,452 895 76,727 11 992 85,060 0
Cost of Revenues 429 36,825 354 30,383 21 441 37,797 (3)
Gross Profit 567 48,627 541 46,344 5 551 47,263 3
% of Revenues 56.9% 60.4% 55.6%
Selling, General &
Administrative
Expenses 299 25,647 265 22,691 13 281 24,055 7
% of Revenues 30.0% 29.6% 28.3%
Research &
Development
Expenses 73 6,244 72 6,193 1 85 7,258 (14)
% of Revenues 7.3% 8.1% 8.5%
Impairment of
Non-Current
Assets, net - - 0 5 (160) 9 768 (100)
Other
(Income)/Expense,
net (9) (739) (5) (470) 57 (29) (2,465) (70)
Results from
Operating
Activities 204 17,475 209 17,925 (2) 206 17,647 (1)
Finance
(Income)/Expense,
net (18) (1,570) (10) (837) 88 (27) (2,352) (33)
Share of Profit of
Equity Investees,
net of tax (0) (2) (1) (59) (98) (1) (55) (98)
Profit before
Income Tax 222 19,047 220 18,821 1 234 20,054 (5)
% of Revenues 22.3% 24.5% 23.6%
Income Tax Expense 58 4,951 57 4,901 1 49 4,181 18
Profit for the
Period 164 14,096 162 13,920 1 185 15,873 (11)
% of Revenues 16.5% 18.1% 18.7%
Attributable to
Equity holders of
the Parent Co. 165 14,178 162 13,920 2 186 15,939 (11)
Attributable to
Non-controlling
interests (1) (82) - - - (1) (66) 24
Diluted Earnings
per Share (EPS) 0.20 17.02 0.19^ 16.69^ 2 0.22 19.11 (11)
^Historical numbers re-casted basis the increased number of shares post share
split.
Earnings before Interest, Tax, Depreciation & Amortization (EBITDA)
Computation
Particulars Q1FY26 Q1FY25 Q4FY25
($) ( ) ($) ( ) ($) ( )
Profit before Income Tax 222 19,047 220 18,821 234 20,054
Interest (Income) / Expense,
net* (12) (1,028) (12) (1,037) (7) (627)
Depreciation 34 2,894 29 2,508 31 2,636
Amortization 22 1,871 15 1,302 22 1,919
Impairment - - 0 5 9 768
EBITDA 266 22,784 252 21,599 289 24,749
% of Revenues 26.7% 28.2% 29.1%
*Includes income from Investment
Key Balance Sheet Items
As on 30(th) Jun As on 31(st) Mar As on 30(th) Jun
Particulars 2025 2025 2024
($) ( ) ($) ( ) ($) ( )
Cash and Cash
Equivalents and Other
Investments 853 73,169 797 68,299 1,115 95,599
Trade Receivables 1,110 95,137 1,055 90,420 946 81,088
Inventories 882 75,600 829 71,085 800 68,568
Property, Plant, and
Equipment 1,199 1,02,784 1,140 97,761 943 80,813
Goodwill and Other
Intangible Assets 1,255 1,07,572 1,267 1,08,613 483 41,374
Loans and Borrowings
(Current &
Non-Current) 567 48,644 545 46,766 358 30,675
Trade Payables 437 37,457 414 35,523 398 34,109
Equity 4,126 3,53,755 3,932 3,37,166 3,436 2,94,628
Key Business Highlights for Q1FY26
-- Expanded partnership with Alvotech to co-develop, manufacture and co-commercialize pembrolizumab, a biosimilar candidate to Keytruda$(R)$. -- Expanded collaboration with Sanofi to launch BeyfortusTM (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.
ESG Highlights and other updates for Q1FY26
-- Improved rating by Carbon Disclosure Project $(CDP)$ to 'A' in the Climate category, positioning us among the top 2% of the global companies assessed. We upheld our leadership status in the Water and Supplier Engagement categories. -- Received a Form 483 with two observations for Middleburgh API facility in New York. The USFDA has classified the inspection outcome as 'Voluntary Action Indicated (VAI)'. -- Received a Form 483 with two observations following GMP inspection conducted at CTO-5, our API facility in Miryalaguda, Telangana. All observations have been addressed and responded to within the stipulated timelines.
Revenue Analysis
--
Q1FY26 consolidated revenues stood at 85.5 billion, YoY growth of 11%
and flat QoQ.
Growth during the quarter was broad-based, aided by
contributions from the acquired Consumer Healthcare portfolio in Nicotine
Replacement Therapy ('NRT') and sustained performance in our branded
markets.
Global Generics (GG)
-- Q1FY26 revenues at 75.6 billion, YoY growth of 10% and flat QoQ.
North America
--
Q1FY26 revenues at 34.1 billion, YoY decline of 11% and QoQ decline of
4%.
The decline was primarily due to increased price erosion in certain
key products including Lenalidomide.
--
During the quarter, we launched five new products in the U.S.
--
We filed one new Abbreviated New Drug Application (ANDA) with the USFDA
during the quarter.
--
Filings pending approval from USFDA - 73 includes:
--
70 ANDAs (43 are Paragraph IV applications, and 22 may have a
'First to File' status and
--
3 New Drug Applications (NDAs) filed under Section 505(b)(2)
Europe
--
Q1FY26 revenues at 12.7 billion, YoY growth of 142% and flat QoQ
growth. This includes revenues from the acquired NRT business.
--
NRT at 6.7 billion, QoQ growth of 12%.
--
Germany at 3.2 billion, YoY growth of 13% and QoQ decline of
11%.
--
UK at 1.7 billion, YoY growth of 10% and QoQ decline of 20%.
--
Rest of Europe at 1.2 billion, YoY growth of 30% and QoQ growth
of 9%.
The growth in Europe was largely driven by revenues from
the acquired NRT portfolio and incremental contributions from new
product launches though partly offset by price erosion. QoQ
performance remained stable as the impact of price erosion was
balanced by gains from forex and increased volumes.
--
During the quarter, we launched 13 new products in the region.
India
--
Q1FY26 revenues at 14.7 billion, YoY growth of 11% and QoQ growth of
13%.
Growth for the quarter was driven by introduction of new products,
price increases and commercial execution.
--
As per IQVIA, our IPM rank was maintained at 10.
--
During the quarter, we launched five new brands.
--
Includes two Innovative assets Beyfortus (RSV Vaccine) &
Sensimmune (Acarizex Slit)
Emerging Markets
--
Q1FY26 revenues at 14.0 billion, YoY growth of 18% and flat QoQ.
YoY
growth was largely driven by increased volumes of existing products,
gains from new launches across multiple countries and favorable foreign
exchange. QoQ performance remained stable as the gains from new product
launches and favourable prices was largely offset by softer volume
growth.
--
Revenues from Russia at 7.1 billion, YoY growth of 28% and QoQ
growth of 8%. YoY growth was due to higher volumes of existing
products, new product introductions and favorable forex. QoQ gains
reflect favourable forex, improved pricing and higher sales
volumes.
--
Revenues from other Commonwealth of Independent States (CIS)
countries and Romania at 2.0 billion, YoY growth of 2% and QoQ
decline of 20%. While YoY growth was supported by new product
launches, whereas QoQ decline was due to lower volumes.
--
Revenues from Rest of World (RoW) territories at 5.0 billion,
growth of 13% YoY and flat QoQ. While YoY growth was due to higher
sales volumes and new product launches, though partially moderated
by price erosion, QoQ performance remained steady, as volume gains
from existing products and recent launches were neutralized by
price erosion.
During Q1FY26, we launched 26 new products across countries.
Pharmaceutical Services and Active Ingredients (PSAI)
--
Q1FY26 revenues at 8.2 billion, YoY growth of 7% and QoQ decline of
14%.
Growth during the quarter was driven by launch of new API products
and favourable forex, partially offset by lower pricing and softer
demand. Performance was further supported by growth in the pharmaceutical
services business. QoQ decline was primarily attributable to seasonal
volume softness.
During the quarter, we filed 12 Drug Master Files
(DMFs) globally.
Income Statement Highlights:
Gross Margin
--
Q1FY26 at 56.9% (GG: 60.9%, PSAI: 13.2%), a YoY decline of 350 basis
points (bps) and a QoQ improvement of 134 bps.
YoY decline was primarily
due to higher price erosion in generics segment and reduced operating
leverage, partially offset by favorable product mix.
Selling, General & Administrative (SG&A) Expenses
--
Q1FY26 at 25.6 billion, YoY increase of 13% and QoQ growth of 7%.
The
YoY increase was driven by strategic investments in consumer healthcare
business segment, including the NRT and Nestlé JV. Other SG&A
expenses stayed mostly unchanged from last year, reflecting cost
discipline across core operations. The QoQ reflects targeted investments
to enhance brand visibility and expand coverage across branded markets.
Research & Development (R&D) Expenses
--
Q1FY26 at 6.2 billion. As % to Revenues -- Q1FY26: 7.3% | Q1FY25: 8.1%
| Q4FY25: 8.5%.
R&D investments were focused on building a robust
pipeline of high-value products, spanning complex generics, biosimilars,
APIs and novel biologics with particular emphasis on oncology, peptides
and injectables and aimed at developing first to market formulations.
Net Finance Income/Expense
-- Q1FY26 income at 1.6 billion compared to 0.9 billion in Q1FY25.
Profit before Tax
--
Q1FY26 at 19.0 billion, a YoY growth of 1% and a QoQ decline of 5%.
As
% to Revenues -- Q1FY26: 22.3% | Q1FY25: 24.5% | Q4FY25: 23.6%.
Income Tax
--
Q1FY26 at 5.0 billion. As % to PBT -- Q1FY26: 26.0% | Q1FY25: 26.0% |
Q4FY25: 20.8%.
Profit attributable to Equity Holders of Parent Company
--
Q1FY26 at 14.2 billion, a YoY growth of 2% and a QoQ decline of 11%.
As % to Revenues -- Q1FY26: 16.5% | Q1FY25: 18.1% | Q4FY25: 18.7%.
Diluted Earnings per Share (EPS)
-- Q1FY26 is 17.02.
Other Financial Highlights:
EBITDA
--
Q1FY26 at 22.8 billion, YoY growth of 5% and QoQ decline of 8%.
As %
to Revenues -- Q1FY26: 26.7% | Q1FY25: 28.2% | Q4FY25: 29.1%.
Others:
-- Operating Working Capital: As on 30th June 2025 at 133.3 billion. -- Capital Expenditure: Q1FY26 at 6.8 billion. -- Free Cash Flow: Q1FY26 at 4.5 billion. -- Net Cash Surplus: As on 30th June 2025 at 29.2 billion -- Net Debt to Equity: As on 30th June 2025 is (0.08) -- Annualized Return on Capital Employed (RoCE): Q1FY26 stood at 22.0%
About key metrics and non-GAAP Financial Measures
This press release contains non-GAAP financial measures within the meaning of Regulation G and Item 10(e) of Regulation S-K. Such non-GAAP financial measures are measures of our historical performance, financial position or cash flows that are adjusted to exclude or include amounts from the most directly comparable financial measure calculated and presented in accordance with IFRS.
The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with IFRS. Our non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. These measures may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes.
We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business.
For more information on our non-GAAP financial measures and a reconciliation of GAAP to non-GAAP measures, please refer to "Reconciliation of GAAP to Non-GAAP Results" table in this press release.
All amounts in millions, except EPS
Reconciliation of GAAP Measures to Non-GAAP Measures
Operating Working Capital
Particulars As on 30(th) Jun 2025
( )
Inventories 75,600
Trade Receivables 95,137
Less:
Trade Payables (37,457)
Operating Working Capital 133,280
Free Cash Flow
Three months ended
Particulars 30(th) Jun 2025
( )
Net cash generated from operating activities 17,817
Less:
Taxes (3,188)
Investments in Property, Plant & Equipment and
intangibles (10,115)
Free Cash Flow before Acquisitions 4,514
Less:
Acquisition related pay-outs -
Free Cash Flow 4,514
Net Cash Surplus and Debt to Equity
Particulars As on 30(th) Jun 2025
( )
Cash and Cash Equivalents 9,004
Investments 64,165
Short-term Borrowings (38,381)
Long-term Borrowings (Current & Non-current) (10,263)
Less:
Restricted Cash Balance -- Unclaimed Dividend and
others 292
Lease liabilities (Included in Short-term and
Long-term Borrowings) (6,463)
Equity Investments (Included in Investments) 1,476
Net Cash Surplus 29,220
Equity 353,755
Net Debt/Equity (0.08)
Computation of RoCE
Particulars As on 30(th) Jun 2025
( )
Profit before Tax 19,047
Less:
Interest and Investment Income (Excluding forex
gain/loss) (1,028)
Earnings Before Interest and taxes [A] 18,019
Average Capital Employed [B] 328,294
Return on Capital Employed (A/B) (Ratio) 22.0%
Computation of Capital Employed:
Particulars As on
Jun 30, 2025 Mar 31, 2025
Property Plant and Equipment 102,784 97,761
Intangibles 95,597 96,803
Goodwill 11,975 11,810
Investment in Equity Accounted Associates 4,938 4,811
Other Current Assets 31,768 30,142
Other Investments 6,481 10,391
Other Non-Current Assets 939 972
Inventories 75,600 71,085
Trade Receivables 95,137 90,420
Derivative Financial Instruments 38 (729)
Less:
Other Liabilities 47,254 48,788
Provisions 6,789 6,324
Trade payables 37,457 35,523
Operating Capital Employed 333,757 322,831
Average Capital Employed 328,294
Computation of EBITDA
Refer page no. 3 & 4.
About Dr. Reddy's: Dr. Reddy's Laboratories Ltd. (BSE: 500124, NSE: DRREDDY, NYSE: RDY, NSEIFSC: DRREDDY) is a global pharmaceutical company headquartered in Hyderabad, India. Established in 1984, we are committed to providing access to affordable and innovative medicines. Driven by our purpose of 'Good Health Can't Wait', we offer a portfolio of products and services including APIs, generics, branded generics, biosimilars and OTC. Our major therapeutic areas of focus are gastrointestinal, cardiovascular, diabetology, oncology, pain management and dermatology. Our major markets include -- USA, India, Russia & CIS countries, China, Brazil, and Europe. As a company with a history of deep science that has led to several industry firsts, we continue to plan and invest in businesses of the future. As an early adopter of sustainability and ESG actions, we released our first Sustainability Report in 2004. Our current ESG goals aim to set the bar high in environmental stewardship; access and affordability for patients; diversity; and governance.
For more information, log on to: www.drreddys.com.
Disclaimer: This press release may include statements of future expectations and other forward-looking statements that are based on the management's current views and assumptions and involve known or unknown risks and uncertainties that could cause actual results, performance, or events to differ materially from those expressed or implied in such statements. In addition to statements which are forward-looking by reason of context, the words "may", "will", "should", "expects", "plans", "intends", "anticipates", "believes", "estimates", "predicts", "potential", or "continue" and similar expressions identify forward-looking statements. Actual results, performance or events may differ materially from those in such statements due to without limitation, (i) general economic conditions such as performance of financial markets, credit defaults , currency exchange rates , interest rates, persistency levels and frequency / severity of insured loss events (ii) mortality and morbidity levels and trends, (iii) changing levels of competition and general competitive factors, (iv) changes in laws and regulations and in the policies of central banks and/or governments, (v) the impact of acquisitions or reorganization , including related integration issues, and (vi) the susceptibility of our industry and the markets addressed by our, and our customers', products and services to economic downturns as a result of natural disasters, epidemics, pandemics or other widespread illness, including coronavirus (or COVID-19), and (vii) other risks and uncertainties identified in our public filings with the Securities and Exchange Commission, including those listed under the "Risk Factors" and "Forward-Looking Statements" sections of our Annual Report on Form 20-F for the year ended March 31, 2025 and our other filings with US SEC. The company assumes no obligation to update any information contained herein.
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CONTACT: INVESTOR RELATIONS
RICHA PERIWAL
richaperiwal@drreddys.com
AISHWARYA SITHARAM
aishwaryasitharam@drreddys.com
MEDIA RELATIONS
PRIYA K
priyak@drreddys.com
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July 23, 2025 13:46 ET (17:46 GMT)