Dr Reddys Lab Q4 PAT tumbles 86% YoY to Rs 221 cr

The weak performance was primarily impacted by a sharp decline in North America revenues due to lower sales of Lenalidomide and a one-time shelf stock adjustment (SSA) of Rs 450 crore related to the product. Favourable foreign exchange movements partially offset the decline.

Excluding the one-time SSA, consolidated revenues were at Rs 7,970 crore in Q4FY26, a decline of 6.3% YoY and 8.7% QoQ and Rs 34,050 billion in FY26, a growth of 4.6% YoY.

Profit before tax (PBT) dropped 90.04% YoY to Rs 199.7 crore in Q4 FY26.

EBITDA slipped 60.37% to Rs 980.7 crore in Q4 FY26 compared with Rs 2,474.9 crore in Q4 FY25. EBITDA margin contracted to 13% in Q4 FY26 as against 29.1% in Q4 FY25. Excluding the SSA impact, EBITDA margin stood at 19.5% in Q4 FY26.

Revenue from global generics tumbled 13% YoY to Rs 6,580 crore during the quarter.

In Q4 FY26, revenue from North America declined 51% YoY to Rs 1,760 crore, Decline was largely due to lower Lenalidomide sales and the one-time SSA. Excluding this one-off, revenues for the segment recorded a 38% YoY decline and a 25% sequential decline in Q4 FY26.

Revenue from India jumped 20% YoY to Rs 1,570 crore in Q4 FY26, driven by revenues from new brand launches, including products from its innovation portfolio, price increases, higher volumes and contributions from recently acquired portfolios.

Revenue from Europe region increased 14% YoY to Rs 1,450 crore during the quarter, while revenue from emerging markets jumped 29% YoY to Rs 1,810 crore in Q4 FY26, aided by new launches across markets and higher volumes, further supported by favourable forex.

R&D Expenses stood at Rs 550 crore during the quarter, registering de-growth of 25% YoY, and accounted for 7.3% of revenue. The decline was mainly due to lower development spending in biosimilars following the completion of major investments related to Abatacept. The company said R&D spending continues to focus on complex generics, peptides and biosimilars. Q4FY26 was also impacted by charges related to certain discontinued CAR-T assets, while FY26 included the one-time new Labour Codes provision.

On full year basis, the company's consolidate net profit tumbled 25.8% to Rs 4196 crore despite 3.24% jump in revenue from operations to Rs 33,700.2 crore in FY26 over FY25.

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 optimization. In parallel, we continue to build long-term franchises in biosimilars, consumer health and innovation to deliver sustainable value.'

Meanwhile, the company's board recommended a final dividend of Rs 8 per equity share of face value of Rs 1 each for the financial year 2025-26. The record date for the dividend has been fixed as 10 July 2026.

Hyderabad-based Dr. Reddy's Laboratories is a global pharmaceutical company. It offers a portfolio of products and services including APIs, generics, branded generics, biosimilars and OTC.

The scrip shed 0.76% to settle at Rs 1,270.10 on the BSE.

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