Dr. Reddy's Laboratories Limited has submitted to the Exchange, the financial results for the period ended Jun 30, 2025.
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Dr. Reddy's reported Q1 FY26 consolidated revenue of ₹85,452 million, up 11% year-on-year but flat sequentially, driven by strong growth in Europe (up 142% on NRT portfolio contribution) and Emerging Markets (up 18%), partly offset by an 11% decline in North America due to pricing pressure on Lenalidomide. Gross margin contracted to 56.9% from 60.4% a year ago (down 350 bps), and EBITDA margin fell to 26.7% from 28.2% on higher price erosion and reduced operating leverage. Profit after tax attributable to equity holders rose 2% YoY to ₹14,178 million, though it declined 11% sequentially. Diluted EPS stood at ₹17.02. The company remained net cash positive with ₹29,220 million in net cash surplus and a Net Debt to Equity ratio of (0.08), generated free cash flow of ₹4,514 million, and delivered RoCE of 22%. Auditors S.R. Batliboi & Associates issued an unmodified limited review report.
Mixed quarter for shareholders — topline growth was healthy and balance sheet remains strong, but margin compression from US generics pricing pressure signals near-term profitability headwinds, which management flagged could intensify on Lenalidomide in the US market.