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

Executive summary

• Achieved record annual revenues in FY26, with double-digit base business growth, despite significant headwinds from lenalidomide and one-time impacts such as SSA, VAT provisions, and impairment charges.

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

• Launched generic semaglutide injection in India and Canada, and advanced biosimilar and hormone therapy portfolios.

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

• 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).

• 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

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

• Focus on strengthening core businesses, advancing pipeline products, and driving operational efficiencies.

• R&D spend expected at 7-8% of revenue, reflecting completion of major biosimilar investments.

• Effective tax rate guidance for FY27: 24-25%.

• SG&A spend to remain at FY26 levels in nominal terms, but decline as a percentage of sales.