Dr Reddy's Laboratories Reports 69% YoY Decline in Q1 FY27 Profit Despite Strong India and Emerging Markets Growth; Shares Fall Over 2%

On Wednesday, Indian equity benchmark indices ended lower, with the benchmark Nifty 50 index declining 191.45 points, or 0.79 per cent, to close at 23,996.25. During the same session, Dr Reddy's Laboratories' share price fell 2.66 per cent to Rs 1,178. The decline in the stock came after the company announced its financial results for the quarter ended June 30, 2026.

Dr Reddy's Q1 FY27 Financial Performance

Dr Reddy's Laboratories reported consolidated revenue of Rs 8,070.5 crore in Q1 FY27, registering a 5.56 per cent YoY decline from Rs 8,545.2 crore in the corresponding quarter last year. Profit before Tax (PBT) declined 70.99 per cent YoY to Rs 552.6 crore from Rs 1,904.7 crore. Consolidated profit attributable to equity shareholders fell 68.72 per cent YoY to Rs 443.5 crore from Rs 1,417.8 crore in Q1 FY26. Diluted earnings per share (EPS) stood at Rs 5.32 compared with Rs 17.02 in the year-ago period.

The company stated that the quarterly performance was impacted by lower Lenalidomide revenues and a provision of Rs 239.7 crore towards inventory and related costs arising from an issue with the active pharmaceutical ingredient (API) used in certain semaglutide batches. Management added that the underlying base business continued to deliver healthy double-digit growth across key geographies despite these headwinds.

Segment Performance

The Global Generics business generated revenue of Rs 7,199.3 crore, down 5 per cent YoY, while Pharmaceutical Services and Active Ingredients (PSAI) revenue increased 4 per cent YoY to Rs 851.9 crore. North America revenue declined 35 per cent YoY due to lower Lenalidomide sales. However, Emerging Markets revenue grew 31 per cent YoY, India revenue increased 17 per cent YoY, and Europe revenue rose 13 per cent YoY, reflecting continued strength in the company's branded and international businesses.
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Key Business Highlights

During the quarter, Dr. Reddy's launched Bosutinib Tablets 400 mg in the United States with 180-day generic exclusivity, introduced generic semaglutide injections in Canada and semaglutide tablets in India, and launched Celevida GLP+ in partnership with Nestlé Health Science. The company also crossed Rs 100 crore in revenue from Toripalimab in India, signed an agreement with Innoviva Specialty Therapeutics for XACDURO, and received USFDA Fast Track designation for partnered ALS therapy COYA 302.

Balance Sheet and Financial Position

As of June 30, 2026, Dr Reddy's reported cash and cash equivalents along with other investments of Rs 9,150.8 crore, equity of Rs 38,673.5 crore, and loans and borrowings of Rs 7,195.2 crore. The company maintained a net cash surplus of Rs 3,056.8 crore with a net debt-to-equity ratio of negative 0.08, reflecting a strong balance sheet and healthy liquidity position.

About Dr Reddy's Laboratories

Dr Reddy's Laboratories Ltd is a global pharmaceutical company engaged in the development, manufacture, and commercialisation of generic medicines, biosimilars, active pharmaceutical ingredients (APIs), and proprietary products. The company operates across major international markets, including North America, Europe, India, and Emerging Markets, serving patients in more than 60 countries.

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Disclaimer: The article is for informational purposes only and not investment advice.