1. Opening Hook
Just when markets were busy celebrating “India pharma resilience,” Dr. Reddy’s decided to serve a reality check—with a garnish of one-offs and US pricing pressure.
Yes, revenues grew. Yes, profits climbed. And yes, everyone politely ignored the margin compression elephant in the room.
Management sounded confident, slides were glossy, and “underlying performance” did a lot of heavy lifting. The base business did grow double-digits, but a few legacy blockbusters clearly didn’t get the memo.
This wasn’t a bad quarter. It also wasn’t a clean one. Somewhere between vaccines, biosimilars, and forex tailwinds, the truth sits—waiting patiently.
Read on. The interesting stuff shows up after the headlines. 😏
2. At a Glance
- Revenue ₹8,727 Cr – Up 4.4% YoY; steady growth, no fireworks.
- EBITDA ₹2,049 Cr – Up 11% YoY; margins quietly shrank.
- PAT ₹1,210 Cr – Up 14% YoY; accountants had a good quarter.
- EBITDA Margin 23.5% – Down YoY; pricing pressure says hello.
- Net Cash ₹3,069 Cr – Balance sheet flex remains undefeated.
3. Management’s Key Commentary
“Double-digit growth in base business, excluding Lenalidomide.”
(Translation: Please don’t ask what happened to Lenalidomide.) 😏
“Profitability remains steady despite product-specific
headwinds.”
(Margins slipped, but we prefer the word ‘steady’.)
“North America performance moderated due to pricing pressure.”
(US generics being US generics. Again.)
“Emerging markets delivered strong growth aided by forex.”
(When operations help, great. When currency helps, even better.)
“We filed BLA for abatacept biosimilar in the US.”
(Pipeline still alive, valuation stories still intact.)
“Semaglutide approvals strengthen our medium-term outlook.”
(GLP-1 optimism doing some serious emotional support.)
“We continue to invest in R&D while maintaining returns.”
(RoCE above 20%—so far, so good.)
4. Numbers Decoded
| Metric | Q3FY26 | YoY | What It Really Means |
|---|---|---|---|
| Revenue | ₹8,727 Cr | +4.4% | Slow but stable growth |
| EBITDA | ₹2,049 Cr | +11% | Costs creeping faster |
| EBITDA Margin | 23.5% | ↓ | Pricing pressure visible |
| PAT | ₹1,210 Cr | +14% | Below EBITDA magic |
| RoCE | 20.4% | Stable | Capital still working |
| Net Cash | ₹3,069 Cr | ↑ | Ammo for deals |
Margins slipped, cash stayed strong—classic Dr. Reddy’s quarter.
5. Analyst
