Dr Reddy’s Q1 FY27 Results: Net Profit Drops 8% to ₹1,290 Crore as US Revenues Decline

Drugmaker Dr. Reddy’s Laboratories reported an 8% drop in consolidated net profit for the June quarter of fiscal year 2026–27, as increased competition and ongoing price erosion in its primary North American market curtailed bottom-line growth.

US Market Drag

The company posted a consolidated net profit after tax of ₹1,290 crore for the quarter ended June 30, 2026, down from ₹1,392 crore recorded during the same period in the previous fiscal year. Consolidated revenue from operations slipped 0.3% year-on-year to ₹7,650 crore, compared with ₹7,672.7 crore in Q1 FY26. The minor decline in overall revenue was primarily driven by a contraction in North American generic sales amid heightened price competition for key molecules such as Revlimid (lenalidomide).

Operational earnings faced pressure during the quarter, with EBITDA margins narrowing as research and development expenses rose to support the company’s biosimilars and complex generics pipeline. R&D expenses stood at ₹610 crore, accounting for 8% of total quarterly revenues, as the firm expanded clinical trials for its proposed interchangeable biosimilar candidates.

The North American generics segment generated ₹3,120 crore in revenue, marking a 7% year-on-year decline from the year-ago quarter. In contrast, the domestic India consumer and prescription business showed resilience, growing 11% year-on-year to reach ₹1,480 crore, bolstered by recent joint venture expansions in consumer health and new brand launches.

The Pharmaceutical Services and Active Ingredients (PSAI) vertical brought in ₹810 crore, while emerging markets, including Russia and Latin America, contributed ₹1,240 crore to the top line during the three-month period.

Ahead of the earnings announcement, shares of Dr. Reddy’s Laboratories traded 1.2% lower at ₹1,208.90 on the National Stock Exchange.

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