Dr. Reddy’s Laboratories Reports Q4FY26 Results; PAT Crashes 86%, Announces ₹8 Dividend

The Indian equity markets traded lower on Tuesday, with the benchmark Nifty 50 index declining 1.83% to close at 23,379.55. Amid the broader weakness, Dr. Reddy’s Laboratories shares declined 0.77% to trade at Rs 1,270 ahead of its Q4FY26 results. Traded volume stood at 19.5 lakh shares compared to the 30-day average volume of 27.5 lakh shares.

The financial performance of Dr. Reddy's Laboratories for Q4FY26 and the full year FY26 has been released by the company. While annual revenues crossed Rs 33,593 crore, the quarter witnessed notable pressure on margins with gross profit declining sharply both on a YoY and QoQ basis.

Q4FY26 at a Glance

For the quarter ended March 31, 2026, revenues from operations stood at Rs 7,516 crore, down from Rs 8,506 crore in Q4FY25, a decline of around 12 per cent YoY. On a sequential basis, revenues also fell 14 per cent QoQ from Rs 8,727 crore in Q3FY26. Gross profit for Q4FY26 came in at Rs 3,369 crore, a sharp decline of 29 per cent YoY compared to Rs 4,726 crore in Q4FY25, and down 28 per cent QoQ from Rs 4,681 crore in Q3FY26. Gross profit margin contracted to 44.8 per cent in Q4FY26, significantly lower than 55.6 per cent in Q4FY25 and 53.6 per cent in Q3FY26.

Selling, General & Administrative (SG&A) expenses for the quarter were Rs 2,776 crore (36.9 per cent of revenues), up 15 per cent YoY from Rs 2,406 crore in Q4FY25. Profit Before Tax (PBT) for Q4FY26 stood at Rs 199 crore, down 90 per cent YoY from Rs 2,005 crore in Q4FY25, and down 87 per cent QoQ from Rs 1,543 crore in Q3FY26. PBT margin contracted sharply to 2.6 per cent from 23.6 per cent in Q4FY25.

After accounting for a tax benefit of Rs 21 crore (versus a tax expense of Rs 418 crore in Q4FY25), Profit for the Period was Rs 221 crore, down 86 per cent YoY from Rs 1,587 crore in Q4FY25, and down 81 per cent QoQ from Rs 1,190 crore in Q3FY26. Net profit margin stood at 2.9 per cent compared to 18.7 per cent in Q4FY25.

EBITDA Performance

EBITDA for Q4FY26 was Rs 981 crore, down significantly from Rs 2,475 crore in Q4FY25, translating to an EBITDA margin of 13.0 per cent versus 29.1 per cent in Q4FY25. On a sequential basis, EBITDA declined from Rs 2,049 crore in Q3FY26, where margin stood at 23.5 per cent. The sharp compression in EBITDA was driven by lower gross margins and elevated impairment charges during the quarter.

Segment-Wise Performance
Global Generics

Global Generics revenue for Q4FY26 stood at Rs 6,580 crore, down 13 per cent YoY from Rs 7,537 crore in Q4FY25, and down from Rs 7,911 crore in Q3FY26. On an annual basis, Global Generics revenue for FY26 was Rs 29,903 crore, up from Rs 28,955 crore in FY25. Gross profit from Global Generics for the quarter was Rs 3,181 crore, down from Rs 4,471 crore in Q4FY25, reflecting margin pressure from product mix and pricing dynamics.

Pharmaceutical Services and Active Ingredients (PSAI)

PSAI segment revenue for Q4FY26 was Rs 1,108 crore, down from Rs 1,168 crore in Q4FY25 on a YoY basis. For the full year FY26, PSAI revenues were Rs 4,204 crore against Rs 4,324 crore in FY25. Segment gross profit from PSAI came in at Rs 182 crore in Q4FY26, a sharp decline from Rs 252 crore in Q4FY25. For FY26, PSAI gross profit was Rs 598 crore compared to Rs 916 crore in FY25, reflecting continued pressure in the active ingredients business.

Full Year FY26 Performance

For the full financial year ended March 31, 2026, total revenues from operations were Rs 33,593 crore, against Rs 32,554 crore in FY25, an increase of approximately 3 per cent on an annual basis. Total gross profit for FY26 was Rs 17,726 crore, compared to Rs 19,043 crore in FY25, implying a contraction in gross margins for the year driven by Q4's weak performance.

Profit Before Tax for FY26 stood at Rs 5,482 crore, down from Rs 7,678 crore in FY25. Profit for the Period for FY26 was Rs 2,205 crore reported in Q4, with the full-year figure reflecting a significant drag from the final quarter.

Dividend Declaration

The Board of Directors has recommended a final dividend of Rs 8 per equity share, having a face value of Rs 1 each, for the financial year 2025-26, subject to approval of shareholders at the upcoming Annual General Meeting. Pursuant to Regulation 42 of SEBI Listing Regulations, the record date for determining the members eligible to receive the dividend has been fixed as July 10, 2026.

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