Dr Reddy's Laboratories on October 24 reported a 7 percent year-on-year rise in net profit to Rs 1,347.1 crore in Q2 FY26. This is lower than the Rs 1,450 crore net profit estimated by brokerages polled by Moneycontrol.
The generic drugmaker's second-quarter profit came below estimates, hurt by stiff competition for the generic version of blockbuster cancer drug Revlimid in its key North America market.
The pharmaceutical major's revenue from operations meanwhile rose nearly 10 percent YoY to Rs 8,828 crore in the July-September quarter of the financial year 2026, surpassing an estimate of around Rs 8,700 crore. It had earlier reported revenue from operations at Rs 8,038 crore for the corresponding quarter of the previous financial year.
"Growth in Q2 was driven by momentum in branded markets and steady contributions from the Nicotine Replacement Therapy (NRTJ portfolio, which helped offset the decline in U.S. Lenalidomide sales. We remain focused on strengthening our core business, advancing key pipeline assets, driving productivity and pursuing business development initiatives," said Dr Reddy's Laboratories Co-Chairman & MD G V Prasad.
India sales rose 13% YoY to ₹1578 crore, aided by price hikes, new launches, and volume growth. Europe revenues surged 138% YoY to ₹1376.2 crore, driven by the acquired NRT portfolio and new product launches. Emerging markets grew 14% YoY to ₹1654.8 crore, with Russia leading at ₹870 crore, up 28%.
North America remained a weak spot, with revenues falling 13% YoY to ₹3240.8 crore due to price erosion and lower Lenalidomide volumes. The company launched seven new products in the region and filed five ANDAs during the quarter.
Gross margin contracted 492 basis points YoY to 54.7%, while SG&A expenses rose 15% to ₹2643.6 crore, partly due to one-time VAT liabilities and charges related to pipeline discontinuation. R&D spend declined 15% YoY to ₹620.2 crore, reflecting reduced investment in biosimilars.
Dr. Reddy’s reported a net cash surplus of ₹2750.8 crore.
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