Dr Reddy's Labs Q3 Results: Profit dips 14% YoY to ₹1210 crore; revenue grows 4%

Dr Reddy's Labs Q3 Results: Dr Reddy's Laboratories (DRL) on Wednesday, January 21, posted a 14% decline in the consolidated net profit during the third quarter of the financial year 2025-26 (Q3FY26).

The pharma major, part of the Nifty 50 index, said its net profit stood at ₹1209.8 crore in Q3 FY26 as against ₹1413.3 crore in the same period a year ago. However, analysts, on average, had estimated profit to fall to ₹1070 crore, as per data compiled by LSEG, showed a Reuters report.

Its revenue from operations rose 4.4% to ₹8726.8 crore in the quarter under review compared with ₹8358.6 crore in Q3FY25.

On the operating front, Dr Reddy's Labs' EBITDA declined 10.8% YoY to ₹2049.3 crore. The gross margins moderated to 53.6% in Q3FY26 from 58.7% in Q3FY25 and 54.7% in Q2FY26, according to the press release.

Region-wise Revenue Breakdown

Growth was broad-based across key markets, except for North America Generics, which reported a decline primarily on account of lower Lenalidomide sales, the company said. Growth was further aided by favourable foreign exchange rate movements.

Overall, global generics revenue in Q3FY26 was at ₹1,791 crore, a growth of7% YoY and 1% sequentially. North America Generics, the biggest revenue contributor, saw a 12% decline in revenue while other regions like Europe, India and emerging markets reported 20%, 19% and 32% growth, respectively.

The Pharmaceutical Services and Active Ingredients (PSAI) segment reported a 2% YoY decline in revenue to ₹800 crore.

During the quarter, the company spent ₹610 crore on research and development, a decline of 8% YoY due to reduced development spends in Biosimilars, following completion of a large part of the investments related to Abatacept.

R&D spends remain focused on complex generics, biosimilars, peptides and novel biologics. The spending this quarter also included the one-time new Labour Codes provision. Excluding the one-off, R&D spend was lower at 6.8% of revenues for the quarter, the company said.

Commenting on the results, Co-Chairman & MD, G V Prasad said, "Our growth in Q3FY26 was supported by continued momentum in our branded businesses, aided by favourable Jorex, thus offsetting the impact of lower Lenalidomide sales. We continue to focus on disciplined execution of our strategic priorities of base business growth, pipeline advancement, operational efficiencies, and select inorganic opportunities, to create long-term value for our stakeholders."

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