DRREDDY · Healthcare
Dr. Reddy's Laboratories Ltd. reported revenue of ₹7,546 cr for January to March 2026, −11.5% on the year and −13.8% on the quarter. Over the last four quarters revenue comes to ₹33,699 cr, +3.2% on the four before.
Operating profit (EBITDA) was ₹382 cr, a margin of 5.1%, −1,837 bps on the year and −1,651 bps on the quarter. It is the narrowest margin of the last 8 quarters (range 5.1% to 27.7%). Operating costs grew +9.7%, faster than revenue at −11.5%, so operating profit grew less than sales.
Net profit was ₹221 cr, −86.1% on the year and −81.4% on the quarter, with earnings per share of ₹2.65. Profit before other income, one-offs and tax fell 119.0%, so 33 points of the headline growth came from outside the core business. The tax rate was −11% against an average of 24% over the previous 8 quarters, which lifted profit this quarter. Profit over the last four quarters totals ₹4,158 cr, −27.4% on the four before.
On earnings per share of ₹50.28 over the last four quarters, the stock at ₹1,229.70 trades at 24.5 times trailing earnings.
Written from the quarterly statements. The filing read adds the balance sheet and cash flow filed with this quarter, the auditor's review, segment results, one-off items line by line and what management said on the call.
Half or more of pre-tax profit came from other income. What is it, and does it repeat?
Other income was 240% of profit before tax, against 26% a year earlier.
Source: Quarterly statements
Operating margin fell sharply on the year. Pricing, input costs, or mix?
EBITDA margin 5.1%, −1,837 bps on the year (−1,651 bps on the quarter).
Source: Quarterly statements
A tax credit added to profit this quarter. Deferred tax recognised, or a reversal?
Profit before tax ₹200 cr; tax −₹22.0 cr, a credit.
Source: Quarterly statements
Finance cost rose fast and now takes a large bite of operating profit. New borrowing, or a higher rate?
Finance cost ₹106 cr, +60.6% on the year; 28% of EBITDA.
Source: Quarterly statements
Could not run on this quarter: Exceptional items that recur, Cash behind the profit, Receivables against sales, Inventory against sales, Borrowing while holding cash, Auditor's review or audit report, IPO money used as stated, Related-party transactions, Exits, postponements, restatements, Promoter pledges and allotments, Earlier promises against delivery, When the results were filed. Most need the filing read (balance sheet, cash flow, auditor, disclosures).
Net profit a year ago, each driver's change, and net profit now. Blue added profit, red took it away.
This quarter's filing carries a balance sheet and a cash flow statement. The cash, receivables and borrowing checks run once the filing read is in.
| Q2 FY24 | Q3 FY24 | Q4 FY24 | Q1 FY25 | Q2 FY25 | Q3 FY25 | Q4 FY25 | Q1 FY26 | Q2 FY26 | Q3 FY26 | Q4 FY26 | Q1 FY27 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | ₹6,903 cr | ₹7,237 cr | ₹7,114 cr | ₹7,696 cr | ₹8,038 cr | ₹8,381 cr | ₹8,528 cr | ₹8,572 cr | ₹8,828 cr | ₹8,753 cr | ₹7,546 cr | ₹8,100 cr |
| YoY | — | — | — | +14% | +16% | +16% | +20% | +11% | +10% | +4% | −12% | −6% |
| EBITDA margin | 29.1% | 28.0% | 25.7% | 27.7% | 25.8% | 27.1% | 23.4% | 25.4% | 22.8% | 21.6% | 5.1% | 10.6% |
| Other income, % of PBT | 17% | 12% | 13% | 10% | 16% | 8% | 26% | 15% | 19% | 18% | 240% | 64% |
| Exceptional items | — | — | — | — | — | — | — | — | — | — | — | — |
| Tax rate | 23% | 24% | 18% | 26% | 30% | 25% | 21% | 26% | 23% | 23% | −11% | 21% |
| Net profit | ₹1,482 cr | ₹1,381 cr | ₹1,310 cr | ₹1,392 cr | ₹1,342 cr | ₹1,404 cr | ₹1,587 cr | ₹1,410 cr | ₹1,337 cr | ₹1,190 cr | ₹221 cr | ₹436 cr |
| YoY | — | — | — | −1% | −9% | +2% | +21% | +1% | −0% | −15% | −86% | −69% |
| Core profit YoY | — | — | — | +1% | +0% | +7% | +5% | −4% | −12% | −26% | −119% | −88% |
| EPS | ₹17.77 | ₹16.56 | ₹15.70 | ₹16.69 | ₹15.05 | ₹16.94 | ₹19.09 | ₹16.99 | ₹16.14 | ₹14.50 | ₹2.65 | ₹5.32 |
| Flags | · | · | · | ✓ | 1 | ✓ | 1 | ✓ | 1 | 1 | 4 | 2 |
Each quarter is read with the same rules. Balance-sheet and cash checks run on half-year and annual quarters; filing-read checks run where a read exists.
Dr. Reddy's Laboratories Ltd. reported revenue of ₹7,546 cr (−11.5% on the year) and net profit of ₹221 cr (−86.1% on the year) for January to March 2026.
Profit before other income, exceptional items and tax moved −119.0% on the year, against −86.1% for reported profit.
4 checks raised a question: Half or more of pre-tax profit came from other income. What is it, and does it repeat?
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