Dr. Reddy's Laboratories Limited Earnings Summary — Q1 FY2027
Dr. Reddy's Reports Q1 Results Impacted by Lenalidomide Transition and Semaglutide Provision
Quarterly Business Intelligence
AI Quarterly Scorecard™
Computed deterministically from the last 10 reported quarters.
Quarterly Business Momentum
- Revenue grew 7.3% sequentially in Q1 FY2027.
- Revenue of ₹8,100 Cr is 5.5% lower year-on-year.
- Revenue has compounded at 5.9% annualised over the last 10 quarters.
- Net profit of ₹444 Cr is 68.7% below the same quarter last year.
- Profit growth is trailing revenue growth this quarter.
- Net profit has compounded at -38.2% annualised across the period.
- Operating margin stands at 10.6% in Q1 FY2027.
- Operating margin compressed by 1474 bps year-on-year.
- Over the last two years operating margin has contracted by 1706 bps.
- PBT margin is 6.8%.
- Expenses grew 13.1% against revenue growth of -5.5%.
- Operating profit of ₹860 Cr is 60.4% lower year-on-year.
- Operating leverage has been under pressure recently.
- 4 of the last 6 measured quarters delivered year-on-year revenue growth.
- Overall quarterly business momentum scores 43/100 (Moderate) on the latest 10 quarters.
- Business momentum has softened and warrants monitoring.
Quarterly Financials
Last 10 Reported Quarters • All figures in ₹ Crore • Margins in %
| Metric | Trend | Latest Q1 FY2027 | Q4 FY2026 | Q3 FY2026 | Q2 FY2026 | Q1 FY2026 | Q4 FY2025 | Q3 FY2025 | Q2 FY2025 | Q1 FY2025 | Q4 FY2024 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | Stable | 8,100 | 7,546 | 8,753 | 8,828 | 8,572 | 8,528 | 8,381 | 8,038 | 7,696 | 7,114 |
| Expenses | Improving | 7,240 | 7,164 | 6,866 | 6,818 | 6,399 | 6,531 | 6,108 | 5,962 | 5,566 | 5,283 |
| Operating Profit | Volatile | 860 | 383 | 1,888 | 2,010 | 2,174 | 1,998 | 2,273 | 2,077 | 2,130 | 1,831 |
| Operating Margin | Volatile | 10.6% | 5.1% | 21.6% | 22.8% | 25.4% | 23.4% | 27.1% | 25.8% | 27.7% | 25.7% |
| Other Income | Volatile | 356 | 480 | 271 | 330 | 291 | 528 | 154 | 314 | 193 | 201 |
| Interest | Improving | 126 | 106 | 94 | 91 | 83 | 66 | 82 | 76 | 60 | 59 |
| Depreciation | Improving | 537 | 557 | 521 | 505 | 476 | 455 | 471 | 397 | 381 | 368 |
| Profit Before Tax | Volatile | 553 | 200 | 1,543 | 1,745 | 1,905 | 2,005 | 1,874 | 1,917 | 1,883 | 1,605 |
| Tax | Volatile | 118 | -22 | 354 | 408 | 495 | 419 | 470 | 576 | 490 | 295 |
| Net Profit | Stable | 444 | 221 | 1,210 | 1,347 | 1,418 | 1,593 | 1,414 | 1,256 | 1,392 | 1,310 |
| Net Margin | Stable | 5.5% | 2.9% | 13.8% | 15.3% | 16.5% | 18.7% | 16.9% | 15.6% | 18.1% | 18.4% |
Key Takeaways
- Revenue declined 6% YoY primarily due to lower lenalidomide sales in North America, which fell 35% YoY to ₹22.0 billion.
- The quarter was significantly impacted by a ₹2,397 million provision related to semaglutide API quality issues (out-of-specification batches).
- Excluding the semaglutide impact, EBITDA margin would have been 15.4% instead of the reported 12.5%.
- India business grew 17% YoY, driven by new brand launches, price increases, and recently acquired portfolios.
- Emerging Markets segment showed strong growth of 31% YoY, totaling ₹18.3 billion, led by Russia and Rest of World markets.
- PSAI (Pharmaceutical Services and Active Ingredients) revenue increased 4% YoY with momentum in the services business.
- Research and Development (R&D) expenses were ₹5.8 billion (7.1% of revenue), a decrease of 8% YoY due to lower biosimilar spends.
- Operating margins were squeezed by higher personnel costs, adverse forex, and elevated freight costs due to the Middle East crisis.
Management Guidance
Management indicated Q1 was a transition period beyond lenalidomide revenues. Focus remains on operational excellence for the base business while building a future pipeline of peptides, biosimilars, and innovative assets for long-term growth.
Sentiment Shift
Stable
While the headline numbers show a sharp YoY decline due to the high base of lenalidomide and a specific API provision, the sequential (QoQ) recovery and strong double-digit growth in the branded base business suggest stabilized underlying performance.
Outlook
The company expects to continue navigating the post-lenalidomide revenue phase by leveraging growth in India and Emerging Markets while preparing for complex generic and biosimilar launches in regulated markets.
From the Annual Report (Key Quotes)
“Our Q1FY27 performance reflected the expected transition beyond lenalidomide revenues, along with an unexpected impact related to semaglutide API.”
“Our underlying base business continued to deliver healthy double-digit growth across all key geographies.”
“Focus remains on improving the health of our base business... while building our future pipeline of peptides, biosimilars, and innovative assets.”
Official Quarterly Documents
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This summary is AI-generated from Dr. Reddy's Laboratories Limited's latest quarterly filing and earnings call. For informational purposes only — not investment advice.