Here's what brokerages expect from Dr Reddy's Labs ahead of Q1 show

Dr Reddy's Labs Q1 preview: The company's net profit is expected to come at ₹1,460 crore, marking around 4.9 per cent Y-o-Y increase, on average, as against ₹1,392.4 crore in Q1 FY25

Dr Reddy's Labs Q1 results preview: Pharmaceutical major Dr Reddy's Laboratories is expected to report steady year-on-year growth in the June 2025 quarter (Q1FY26), driven by strong performance in India, Russia, and the rest of the world. Revenue is projected to rise by on a yearly-basis, supported by steady contributions from key products like Revlimid and new domestic partnerships.  However, profit is likely to come under pressure due to increased R&D spending and operational costs. Margins may soften slightly, despite stable earnings before interest, tax, depreciation, and amortization (Ebitda) and flat revenue growth on a sequential basis.  The company is scheduled to announce its June quarter results on Wednesday, July 23, 2025.

 

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Dr Reddy's Labs Q1 results expectations 

According to brokerages tracked by Business Standard, Dr Reddy's net profit is expected to come at ₹1,460 crore, marking a moderate 4.9 per cent Y-o-Y increase, on average, as against ₹1,392.4 crore in the year-ago period (Q1 FY25). However, on a quarterly (Q-o-Q) basis, the company's bottom line is projected to decline by an average of around 8 per cent.

  The pharma major's revenue for the quarter under review is expected to increase 10.66 per cent to ₹8,517 crore, on average, as compared to ₹7,696.1 crore in the corresponding quarter of the previous fiscal. On a sequential basis, revenue is expected to remain flat compared to ₹8,528.4 crore in the March 2025 quarter.

 

Brokerages expected the company's earnings before interest, tax, depreciation and amortisation (Ebitda) to decrease 2.3 per cent to ₹2,080 crore in Q1FY25 compared to ₹2,130 crore in the year-ago period.   Check List of Q1 results today

Here's how analysts expect Dr Reddy's Labs to perform in Q1 FY26:

Kotak Institutional Equities

Analysts at Kotak Institutional Equities factor in $403 million North America sales for Dr Reddy's in the June 2025 quarter, baking in a marginally lower Q-o-Q contribution from gRevlimid due to pricing pressure. The brokerage expects the company's domestic sales to grow by 11 per cent Y-o-Y by 11 per cent in Q1FY26.   The brokerage expects the pharma major's revenue to increase by 10 per cent Y-o-Y and PAT is expected to grow by 6.1 per cent. However, on a quarterly basis, the revenue is expected to remain flat, while PAT may decline by 7.3 per cent.

   

"On a low base, we expect 18 per cent Y-o-Y growth in Russia. For Europe, we bake in 2 per cent Q-o-Q sales growth in Q1FY26. Within the rest of the world (ROW), and Pharmaceutical Services and Active Ingredients (PSAI segments), we factor in 12 per cent Y-o-Y and 9 per cent Y-o-Y growth, respectively," Kotak said in a note.

 

Overall, Dr Reddy's is expected to report sales growth of 10 per cent Y-o-Y and flat Q-o-Q in the June 2025 quarter.

 

"We bake in 170 bps qoq expansion in gross margin to 68.3 per cent (-340 bps Y-o-Y), for Dr Reddy's in Q1FY26, due to lower US sales. We expect consolidated Ebitda to decline 1 per cent Y-o-Y to ₹21 billion (+1 per cent Q-o-Q), with Ebitda margin expanding by 50 bps Q-o-Q to 24.8 per cent (-290 bps Y-o-Y)," the brokerage added.

Yes Securities

According to analysts at Yes Securities, Revlimid's trajectory would essentially determine US performance and expect modest growth, though still lower Y-o-Y, as peak Revlimid sales might be behind. 

 

"Gross margin had an element of one-off in Q4 to the extent of 300bps, which would reverse even as NRT consolidation implies margin would be below last year," the brokerage said in a note.

Phillip Capital

Analysts at Phillip Capital expect 13 per cent growth in revenue led by steady growth in US-based business sales, and strong  Revlimid, 15 per cent growth in India, on the back of licensing of Sanofi's vaccine portfolio and joint venture (JV) with Nestle Healthcare. 

 

It expects margins to correct 300 bps Y-o-Y mainly due to higher R&D spends and increased overheads despite rising Revlimid contribution, leading to a muted Ebitda performance. "Due to higher operating expenses and R&D spends, the resultant PAT is expected to decline by 4 per cent Y-o-Y," the brokerage said.