1. At a Glance
India’s pharmacy-on-speed-dial just dropped its Q1 FY26 script — revenue up 11%, PAT steady, and USFDA playing peek-a-boo with Form 483. With ₹85.5 billion in revenue and a P/E under 20, Dr. Reddy’s is still prescribing growth without overdosing on drama.
2. Introduction with Hook
Imagine a pharma company that’s part Rambo, part monk — shooting off 400+ generics into global markets while quietly dodging regulatory bullets. That’s Dr. Reddy’s for you. With ₹33,500+ Cr TTM revenue and ₹5,743 Cr PAT, it’s got the precision of a surgeon and the risk appetite of a Formula 1 driver with a lab coat.
- 11% revenue growth in Q1 FY26
- ROCE of 23% and cash flows strong enough to make mutual funds blush
Now, let’s dissect this pill.
3. Business Model (WTF Do They Even Do?)
Dr. Reddy’s is basically that student who not only does the assignment but also corrects the professor’s grammar. It makes:
- Generic drugs (cheap but effective — unlike your gym trainer’s diet advice)
- APIs (the secret sauces behind the pills)
- Biosimilars (big pharma’s bootlegged cousin)
- Custom pharma services (freelancing for drug R&D)
All this spread over markets like the US, Europe, Russia, and India. They’re less “local chemist,” more “global prescription overlord.”
4. Financials Overview
| FY25 (Rs Cr) | FY24 (Rs Cr) | Growth |
|---|---|---|
| Revenue | 32,644 | 28,011 |
| EBITDA | 8,547 | 7,933 |
| PAT | 5,725 | 5,578 |
| OPM (%) | 26% | 28% |
- Margins aren’t in ICU but did catch a cold
- PAT growth slowing: time to check dosage?
Quarterly Q1 FY26:
- Revenue: ₹8,572 Cr
- PAT: ₹1,410 Cr
- EPS: ₹16.99
- YoY growth: muted, like your boss during appraisal season
5. Valuation
Let’s diagnose this stock the Wall Street way:
- P/E: 18.4x (healthy, not hyped)
- EV/EBITDA: ~11.2x
Fair Value Range: ₹1,350 – ₹1,550
If you think buying it at 25x would be fun, you probably also think Crocin cures heartbreak.
6. What’s Cooking – News, Triggers, Drama
- USFDA Form 483: Middleburgh API facility got some love notes from regulators. But classified as “VAI” = Very Avoidable Issue
- New Launches: Still pushing molecules like it’s a street-corner startup
- Auditor Switch: Deloitte to be appointed from FY26-27. Bye-bye EY?
- Investor Call Notes: “Strong growth outlook, steady pipeline, and compliance focus” = investor Xanax
7. Balance Sheet
| Metric | FY25 (₹ Cr) |
|---|---|
| Equity Capital | 83 |
| Reserves | 33,466 |
| Borrowings | 4,677 |
| Fixed Assets | 18,226 |
| Investments | 4,051 |
| Total Assets | 48,023 |
- Net worth’s climbing like gym bros on creatine
- Debt up 3.5x YoY, but manageable — not Titanic-level yet
8. Cash Flow – Sab Number Game Hai
| Cash Flow | FY23 (₹ Cr) | FY24 (₹ Cr) | FY25 (₹ Cr) |
|---|---|---|---|
| Operating Activities | 5,888 | 4,543 | 4,643 |
| Investing Activities | -4,109 | -4,034 | -5,785 |
| Financing Activities | -2,686 | -376 | 1,891 |
| Net Cash Flow | -907 | 133 | 749 |
- Cash from ops: solid like old-school antibiotics
- Investing outflows: clearly spending like they’re building Pharma Hogwarts
9. Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| ROE | 18% |
| ROCE | 23% |
| OPM | 25% |
| D/E Ratio | 0.14 |
| EPS (TTM) | ₹68.07 |
| P/E | 18.4 |
ROCE and ROE together say: “Not flashy, but reliable like mom’s kadha during flu.”
10. P&L Breakdown – Show Me the Money
| FY | Revenue | EBITDA | PAT |
|---|---|---|---|
| FY23 | ₹24,670 Cr | ₹6,470 Cr | ₹4,507 Cr |
| FY24 | ₹28,011 Cr | ₹7,933 Cr | ₹5,578 Cr |
| FY25 | ₹32,644 Cr | ₹8,547 Cr | ₹5,725 Cr |
- Revenue is rising like gym subscription prices post-Jan
- PAT growth flattening = needs a vitamin shot
11. Peer Comparison
| Company | Rev (Cr) | PAT (Cr) | P/E | ROE (%) |
|---|---|---|---|---|
| Sun Pharma | 52,578 | 11,453 | 35.2 | 16.9 |
| Cipla | 27,547 | 5,142 | 23.1 | 17.8 |
| Dr. Reddy’s | 33,520 | 5,743 | 18.4 | 18.0 |
| Zydus Lifesc. | 23,241 | 4,643 | 20.8 | 21.2 |
| Torrent Pharma | 11,516 | 1,915 | 62.8 | 26.5 |
“Looks like the least drunk guest at a wedding full of finance bros.”
12. Miscellaneous – Shareholding, Promoters
| Category | Jun 2025 |
|---|---|
| Promoters | 26.64% |
| FIIs | 25.33% |
| DIIs | 26.73% |
| Public | 21.04% |
- Promoter stake: Flatlined
- DIIs returning with vengeance
- Retail love cooling off faster than chai in AC
13. EduInvesting Verdict™
Dr. Reddy’s is like the Amitabh Bachchan of pharma: aged, solid, delivers monologues (concall transcripts) and still gets respect. Q1 FY26 wasn’t blockbuster, but not a dud either. If you want insane growth, this isn’t your poison. But if you’re looking for consistent compounding with a dash of USFDA suspense — a decent pit stop.
Metadata:
Written by EduInvesting Team | July 23, 2025
Tags: Dr. Reddy’s Laboratories Ltd, Pharma, Earnings, EduInvesting Premium
