Dr. Reddy’s Laboratories (DRREDDY) investor relations material

Executive summary

• Achieved record annual revenues in FY26 with double-digit base business growth, despite headwinds from lenalidomide and one-time impacts such as shelf stock adjustments, impairments, VAT provisions, and labor law changes.

• Strategic focus on scaling base business, advancing pipeline (semaglutide, abatacept), and cost optimization, with strong performance in acquired NRT business and productivity initiatives.

• Significant progress in regulatory approvals and launches for semaglutide in Canada and India, and expansion of biosimilar and hormone therapy portfolios.

• Recognized for sustainability and corporate governance leadership, including EcoVadis Gold Medal and top rankings.

• Board recommended a final dividend of ₹8 per share for FY26, subject to shareholder approval.

Financial highlights

• FY26 consolidated revenues: ₹335.9 billion (up 3.2% YoY); Q4FY26: ₹75.2 billion (down 11.6% YoY, 13.9% QoQ); adjusted Q4 revenue: INR 7,969 crores ($849M), down 6% YoY and 9% QoQ.

• FY26 EBITDA: ₹76.6 billion (22.8% margin, down from 28.3% in FY25); Q4FY26 EBITDA: ₹9.8 billion (13.0% margin, down 60% YoY); adjusted EBITDA for Q4: INR 1,554 crores ($166M), margin 19.5%.

• FY26 net profit attributable to equity holders: ₹42.9 billion (12.8% margin, down 24% YoY); Q4FY26: ₹2.2 billion (2.9% margin, down 86% YoY).

• Gross margin for FY26: 52.8% (down 573 bps YoY); Q4FY26: 44.8% (down 1,074 bps YoY).

• Net cash surplus as of March 31, 2026: ₹32.7 billion.

Outlook and guidance

• Management expects base business to sustain double-digit growth in FY27, with margins projected to improve and remain above 50%, driven by new launches and cost improvements.

• Focus on strengthening core businesses, advancing pipeline products, and driving operational efficiencies, with continued investment in innovation, M&A, and sustainability.

• SG&A and R&D spends to remain at similar nominal levels, with R&D at 7-8% of revenue; effective tax rate expected at 24-25% for FY27.