Dr Reddy Laboratories Q1 profit up 2%, posts best ever quarterly revenue

Hyderabad-based pharma major Dr Reddy Laboratories (DRL) on Wednesday reported a consolidated net profit of ₹1,417 crore in the first quarter of financial year 2026 (Q1FY26), a 2 per cent increase from ₹1,392 crore profit logged in the same quarter of previous year.

 

The company clocked its highest ever quarterly revenue at ₹8,545 crore, up by 11 per cent year-on-year (Y-o-Y) from ₹7,672 crore.

 

The increase in the profit and revenue was attributed to new product launches and the price hikes taken in the quarter.

 

Sequentially, the revenue was flat marking a marginal 0.4 per cent increase whereas the net profit fell by 11 per cent.

 

 

GV Prasad, co-chairman and managing director of DRL, said, “We delivered double-digit growth this quarter over the same period last year, reflecting our strength in branded markets and positive momentum in the Nicotine Replacement Therapy portfolio.”

 

The company maintained its 10th position in the Indian Pharma Market (IPM) during the quarter, supported by the launch of five new brands. It now aims to move up the rankings by focusing on brand additions and innovation-driven growth.

 

Dr. Reddy’s is planning a major global rollout of semaglutide starting in 2026, targeting 87 countries, including key markets like India, Brazil, Canada, and Turkey, depending on local patent expiries. In countries without active patents, launches will proceed earlier, while in India and Brazil, where the patent expires in March 2026, the company aims for Day 1 launches.

 

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Erez Israeli, chief executive officer of DRL, said, “The semaglutide launch is very important to us. It reflects our focus on business development, resource optimisation, and cost alignment for future growth. While there are execution risks, I am confident we’ll overcome them and continue our growth trajectory. As for innovation, our pipeline includes 26 peptide-based GLP-1 products, which are expected to be launched over the next decade.”

 

Despite ongoing litigation with Novo Nordisk in India regarding the validity of the semaglutide patent, Dr. Reddy’s does not anticipate any delays or disruptions to its commercialisation plans.

 

The company expects significant topline contribution from semaglutide, citing increasing global demand for GLP-1 therapies in both diabetes and weight management.

 

Priced lower than Novo’s offering (₹17,000 per month), Dr. Reddy’s plans to leverage its fully integrated manufacturing to ensure wider accessibility. Semaglutide is the first of 26 GLP-1 peptide-based drugs the company plans to launch globally over the next decade, with each product being rolled out based on regional IP clearance.

 

Dr. Reddy’s has guided for a capital expenditure of approximately ₹2,700 crore in FY26, with major investments directed towards expanding capacity for peptides and biosimilars, aligned with product-specific requirements.

 

Global Generics revenue stood at ₹8,060 crore, up 10 per cent Y-o-Y. The performance was supported by new launches and stable volumes across regions.

 

North America business stood at ₹3,412 crore, down 11 per cent Y-o-Y due to heightened price erosion in key products such as Lenalidomide. The pricing pressure on Lenalidomide is expected to intensify in the United States generics market. The company launched five new products and filed one ANDA with the USFDA during the quarter. As of June 2025, 73 filings are pending with the USFDA, including 70 ANDAs (43 Para IVs, 22 with potential First-to-File status) and 3 NDAs.

 

Europe revenues rose 142 per cent Y-o-Y to ₹1,274 crore, driven by the NRT acquisition. The NRT business contributed ₹670 crore. Germany reported ₹320 crore in sales up by 13 per cent Y-o-Y, the United Kingdom business stood at ₹170 crore up by 10 per cent Y-o-Y and the rest of Europe ₹120 crore up by 30 per cent Y-o-Y. Growth was led by new launches and forex gains, partly offset by price erosion. Thirteen new products were introduced in the region.

 

The emerging markets revenues were ₹1,404 crore, up 18 per cent Y-o-Y. Growth was driven by higher volumes, new product launches, and favourable forex. Russia contributed ₹710 crore up 28 per cent Y-o-Y supported by higher volumes and pricing.

 

The Commonwealth of Independent States and Romania contributed ₹200 crore up by 2 per cent Y-o-Y, while Rest of World (RoW) territories contributed ₹500 crore which was up by 13 per cent Y-o-Y. A total of 26 new products were launched across these markets.

 

The pharmaceutical services and active ingredients segment revenues stood at ₹818 crore, up 7 per cent Y-o-Y. Growth was supported by new API launches, favourable forex, and expansion in pharmaceutical services. The company filed 12 Drug Master Files (DMFs) globally during the quarter.

 

The results came after the market hours. The company’s stock increased by 0.58 per cent ending the day’s trade at ₹1247.5 apiece on BSE.