RDY · Dr. Reddy's Laboratories Limited

Dr. Reddy's Laboratories reported a challenging Q4 FY26, with consolidated revenues declining 11.6% year-over-year to ₹75.2 billion, primarily due to a one-time shelf stock adjustment (SSA) of ₹4.5 billion related to lenalidomide in North America, as well as impairments of CAR-T assets and Eftilagimod Alfa totaling ₹2.3 billion, and VAT provisions of ₹1.1 billion. Excluding the SSA, revenues were ₹79.7 billion, down 6.3% YoY. Gross margin contracted sharply to 44.8% from 55.6% a year ago, reflecting the impact of these charges. EBITDA fell to ₹9.8 billion (13.0% margin) from ₹24.7 billion (29.1% margin) in Q4 FY25. Net profit attributable to equity holders plunged 86% to ₹2.2 billion. For the full fiscal year 2026, revenues grew 3.2% to ₹335.9 billion, but net profit declined 24% to ₹42.9 billion. The North America segment was the main drag, with Q4 revenues down 51% YoY due to lower lenalidomide sales and the SSA. In contrast, India and Emerging Markets posted strong growth of 20% and 29% respectively. Europe grew 14% YoY, boosted by the NRT portfolio. Management commentary highlighted resilience in branded businesses and currency tailwinds partially offsetting headwinds. The board recommended a final dividend of ₹8 per share and approved key governance changes, including the re-appointment of Dr. K P Krishnan and appointment of Mr. Srikanth Velamakanni as independent directors, and the appointment of Deloitte Haskins & Sells as statutory auditors.