Hyderabad-based pharmaceutical major Dr Reddys Laboratories Ltd has posted a robust performance for the second quarter of FY26 on October 24, 2025, underscoring steady growth across core markets despite pricing pressures in North America.
The company reported a consolidated net profit of ₹1,437.2 crore, marking a 14% year-on-year (YoY) increase from ₹1,255.3 crore in the same period last year. Sequentially, profit remained largely unchanged. Revenue from operations stood at ₹8,805.1 crore, up 9.8% YoY, compared to ₹8,016.2 crore in Q2 FY25, driven by broad-based growth across India, Europe, and emerging markets.
Earnings before interest, tax, depreciation, and amortisation (EBITDA) came in at ₹2,351.1 crore, reflecting a 3% YoY growth, with an EBITDA margin of 26.7%. The company’s earnings per share (EPS) for the quarter stood at ₹17.26.
Segment-Wise Performance Highlights
Dr Reddy’s reported mixed regional trends during the quarter, reflecting resilience in key markets and challenges in others.
- North America: ₹3,240 crore, down 13% YoY, primarily due to pricing pressure and lower Lenalidomide sales.
- Europe: ₹1,380 crore, up 138% YoY, supported by strong performance from the Nicotine Replacement Therapy (NRT) portfolio. Excluding NRT, growth was still a healthy 17% YoY.
- India: ₹1,580 crore, up 13% YoY, driven by price increases, new brand launches, and higher sales volumes.
- Emerging Markets: ₹1,650 crore, up 14% YoY, with robust contributions from Russia and CIS regions.
The Pharmaceutical Services and Active Ingredients (PSAI) division reported revenues of ₹940 crore, a 12% YoY increase, aided by higher API sales and favourable foreign exchange movement.
Operational and Financial Strength
During the quarter, Dr Reddy’s launched seven new products and filed five new ANDAs with the USFDA, taking total pending approvals to 75 filings, including 73 ANDAs and two NDAs.
The company maintained a healthy balance sheet with a net cash surplus of ₹2,750 crore and a net debt-to-equity ratio of -0.08 as of 30 September 2025. Free cash flow for the quarter stood at ₹580 crore, following acquisition-related payouts, while capital expenditure amounted to ₹510 crore.
Dr Reddy’s also reported an annualised return on capital employed (RoCE) of 21.9%, reflecting strong operational efficiency and prudent financial management.
Outlook
Looking ahead, the company aims to continue expanding its global footprint, focusing on innovation-led growth, cost optimisation, and leveraging its strong consumer healthcare portfolio for long-term value creation.
Conclusion
Dr Reddy’s Laboratories’ Q2 FY26 results highlight the company’s ability to sustain growth amid challenging global market conditions. With revenue nearing ₹8,800 crore and profit rising by 14%, the quarter underscores the strength of its diversified portfolio and operational discipline. Strategic focus on branded markets, R&D investments, and productivity enhancement positions Dr Reddy’s for continued growth in the evolving global pharmaceutical landscape.
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