Dr. Reddy's Laboratories Limited (DRREDDY)
₹1,233.00 +1.17% last close, 16 Oct
Q2 FY27 results
📅 Next results: 23 Oct 2026 (board meeting)Dr. Reddy's Laboratories Limited's board meets on 23 Oct 2026 to consider its Q2 FY27 results (July-September 2026).
In its latest reported quarter, Q1 FY27, Dr. Reddy's' revenue was ₹8,070 Cr (-5.6% year on year, +7.0% on the previous quarter), and net profit ₹435 Cr (-69.2% year on year); the operating margin was 4.7%.
| Q1 FY27 (₹ Cr) | Value | YoY vs Q1 FY26 | QoQ |
|---|---|---|---|
| Revenue | ₹8,070 | -5.6% | +7.0% |
| Operating profit | ₹378 | -78.3% | -0.9% |
| Net profit | ₹435 | -69.2% | +96.7% |
| EPS (₹) | 5.32 | -68.8% | +100.8% |
| Operating margin | 4.7% | — | — |
DRREDDY delivery percentage and open interest
NSE end-of-day data for
On Fri, 16 Oct 2026, 52.71% of the DRREDDY shares traded on NSE were taken to delivery, against the stock's own 20-session average of 55.94%. That is close to its usual level. In DRREDDY futures, open interest fell 1.36% while the futures price rose 0.81%: short covering (shorts closing out).
Delivery in the last 5 sessions: 45.8% · 50.8% · 55.4% · 53.0% · 52.7%
A description of what the exchange published, not a recommendation. Names such as "accumulation" or "long buildup" label a pattern in the numbers. How delivery is analysed
📢 Recent Corporate Announcements
The USFDA conducted a Pre-Approval Inspection (PAI) at Dr. Reddy's Laboratories' FTO-9 manufacturing facility in Visakhapatnam, Andhra Pradesh, from October 8 to October 9, 2026. Following the audit, the regulator issued a Form 483 with three observations. Dr. Reddy's stated it will address the observations within the stipulated timeline. Clearances from such inspections are crucial as the company has 85 filings pending US FDA approval.
- USFDA completed Pre-Approval Inspection (PAI) from October 8, 2026, to October 9, 2026
- Form 483 issued with 3 regulatory observations for the FTO-9 plant
- Inspection took place at the manufacturing facility in Visakhapatnam, Andhra Pradesh
- Company confirmed it will submit responses within the stipulated regulatory timeline
The USFDA conducted a Pre-Approval Inspection (PAI) at Dr. Reddy's Laboratories' FTO-11 manufacturing facility in Pydibhimavaram, Andhra Pradesh, from October 5 to October 7, 2026. Following the audit, the regulator issued a Form 483 with two observations. The company confirmed it will address these observations within the stipulated timeline. Clearances of PAIs are critical for pending product approvals in the US generic pipeline.
- USFDA conducted Pre-Approval Inspection (PAI) from October 5 to October 7, 2026
- Form 483 issued with 2 observations for the FTO-11 manufacturing unit
- Facility located in Pydibhimavaram, Andhra Pradesh
- Company stated it will submit its response within the stipulated regulatory timeline
Dr. Reddy's Laboratories Limited has scheduled its board meeting and earnings release for the quarter and six months ended September 30, 2026 (Q2FY27) on Friday, October 23, 2026. Following the result announcement, management will host an earnings conference call at 19:30 IST / 10:00 ET on the same day. Audio recordings and transcripts will subsequently be published on the company's website. This is a routine administrative calendar intimation.
- Q2FY27 financial results to be released on Friday, October 23, 2026
- Results cover the quarter and six months ended September 30, 2026
- Earnings call scheduled for October 23, 2026 at 19:30 PM IST / 10:00 AM ET
Dr. Reddy's Laboratories disclosed that its wholly owned step-down subsidiary, Dr. Reddy's Laboratories, Inc. (DRL Inc), received a final transcript from the US Internal Revenue Service (IRS) on October 2, 2026. The IRS levied a penalty of $32,350.20 due to a misclassification of the fiscal year reference during a tax payment. Management evaluated the penalty and confirmed there is no material impact on the company's financials, operations, or other activities.
- IRS levied a penalty of $32,350.20 on US subsidiary Dr. Reddy's Laboratories, Inc.
- Penalty arose from a misclassification of fiscal year reference during tax payment
- Final transcript was dated September 25, 2026, and received on October 2, 2026
- Company evaluated and confirmed zero material operational or financial impact
Dr. Reddy's Laboratories Limited has announced a Board of Directors meeting scheduled for Friday, October 23, 2026. The meeting will primarily consider and approve the unaudited standalone and consolidated financial results for the quarter ending September 30, 2026. Pursuant to SEBI insider trading regulations, the trading window for dealing in company securities will remain closed from September 24, 2026 to October 25, 2026 (both days inclusive).
- Board meeting scheduled for Friday, October 23, 2026
- Meeting agenda is to approve Q2 financial results for quarter ending September 30, 2026
- Trading window closed from September 24, 2026 to October 25, 2026 (both days inclusive)
Dr. Reddy's Laboratories has entered into an exclusive distribution and marketing agreement with Takeda Biopharmaceuticals India to commercialize Qdenga®, India's first CDSCO-approved dengue vaccine, in the private market. There are no upfront consideration or milestone payments involved under the agreement. The vaccine received approval in July 2026 for individuals aged 4 to 60 years and is slated for commercial launch in the first half of 2027. This pact bolsters Dr. Reddy's vaccine footprint in India as dengue incidence has risen 11-fold over the past two decades.
- Exclusive rights for promotion and distribution in India's private market across pediatric and adult segments
- Zero upfront consideration or milestone payments payable by Dr. Reddy's
- Vaccine rollout targeted for the first half of 2027 subject to local regulatory clearances
- Approved by CDSCO in July 2026 for individuals aged 4 to 60 years; over 32 million doses distributed globally across 43 countries
Dr. Reddy's Laboratories clarified to stock exchanges that reports regarding its voluntary licensing agreement with Gilead Sciences are correct. The agreement pertains to Gilead's investigational once-yearly lenacapavir intended for HIV prevention. The company stated that the event does not have an immediate material financial impact requiring Regulation 30 disclosure at this stage. Dr. Reddy's operates at a TTM revenue base of ₹28,704 Cr, positioning this partnership within its broader complex formulations and global access portfolio.
- Clarification submitted on September 18, 2026, responding to exchange queries from September 17, 2026
- Confirms voluntary license agreement with Gilead Sciences for investigational once-yearly lenacapavir for HIV prevention
- Company clarified that the matter does not constitute a material event requiring disclosure under Regulation 30
- Material impact on current financials stated as Not Applicable
The US FDA concluded a records assessment under Section 704(a)(4) at Dr. Reddy's API manufacturing facility in Jiutepec, Mexico, between July 17, 2026, and September 8, 2026. Following the audit, the regulator issued a Form FDA 2953 containing two observations. Dr. Reddy's stated that it will submit its response within the stipulated regulatory timeline. Compliance at its global API and formulation facilities remains critical as the company operates 32 plants globally.
- US FDA records assessment conducted between July 17, 2026 and September 8, 2026
- Assessment concluded with Form FDA 2953 containing 2 observations
- Inspection targeted API manufacturing facility Industrias Químicas Falcón de México in Morelos, Mexico
- Company to submit its response within the stipulated timeline
Dr. Reddy's Laboratories Limited has allotted 375 equity shares of face value Re. 1 each on September 10, 2026, pursuant to the exercise of options under its Employees ADR Stock Options Scheme, 2007. The shares were allotted at an exercise price of Re. 1 per share with nil premium. Following this allotment, the company's total paid-up equity share capital stands at Rs. 83,46,80,285 across 83,46,80,285 shares. The dilution represents an entirely negligible fraction of the company's existing equity base.
- Allotment of 375 equity shares of Re. 1 each on September 10, 2026
- Issued under Dr. Reddy's Employees ADR Stock Option Scheme, 2007 at an exercise price of Re. 1 per share
- Total paid-up capital post-issue stands at Rs. 83,46,80,285 comprising 83,46,80,285 equity shares
- Shares rank pari passu with existing equity shares
Dr. Reddy's Laboratories Limited has announced its participation in two upcoming investor group meetings in September 2026. The first meeting is scheduled for September 17, 2026, organized by ICICI Securities as an in-person group meet in Hyderabad. The second meeting will be hosted virtually by Bank of America on September 24, 2026. These meetings are standard investor interactions under SEBI LODR Regulation 30, with no unpublished price-sensitive information typically shared.
- In-person group meeting organized by ICICI Securities on 17.09.2026 from 12:30 to 13:30 IST in Hyderabad
- Virtual group meeting organized by Bank of America on 24.09.2026 from 14:00 to 15:00 IST
- Filing submitted under Regulation 30 of SEBI LODR Regulations, 2015
Dr. Reddy's Laboratories has allotted 4,110 equity shares of face value Re. 1 each on August 26, 2026, upon the exercise of stock options under its Employees Stock Option Scheme, 2002. The shares were issued at an exercise price of Re. 1 per share with nil premium. Following this allotment, the company's total paid-up share capital increases marginally to Rs. 83.47 crore (83,46,79,910 equity shares). The dilution from this issuance is negligible relative to the existing base.
- Allotted 4,110 fully paid-up equity shares of Re. 1 face value on August 26, 2026
- Issued at an exercise price of Re. 1 per share with nil premium under the 2002 ESOP scheme
- Total paid-up share capital post-allotment stands at Rs. 83,46,79,910 across 83,46,79,910 shares
- Newly allotted shares rank pari passu with existing equity shares
Dr. Reddy's Laboratories announced that the United States Food & Drug Administration (USFDA) has concluded its GMP inspection of the company's API manufacturing facility in Mirfield, West Yorkshire, United Kingdom. The inspection, which was initially notified on September 8, 2025, has been classified as 'Voluntary Action Indicated' (VAI). The regulator concluded that the inspection is officially closed under 21 CFR 20.64(d)(3), removing regulatory compliance uncertainty for this plant.
- USFDA officially closed the GMP inspection under 21 CFR 20.64(d)(3) for the Mirfield, UK facility.
- Inspection classification determined as 'Voluntary Action Indicated' (VAI).
- Resolves regulatory inspection process initiated around September 8, 2025.
Dr. Reddy's Laboratories has announced that the US FDA has classified the inspection outcome of its API manufacturing facility in Mirfield, West Yorkshire, UK as 'Voluntary Action Indicated (VAI)'. The regulatory inspection, originally intimated on September 8, 2025, is now officially closed under 21 CFR 20.64(d)(3). A VAI classification indicates that while minor objectionable conditions were observed, no regulatory or administrative action is warranted, allowing normal operations and exports to continue.
- US FDA issues 'Voluntary Action Indicated (VAI)' status for Mirfield, UK API facility
- Inspection officially closed under 21 CFR 20.64(d)(3)
- Resolves regulatory inspection process initiated and disclosed on September 8, 2025
- Dr. Reddy's maintains 32 global manufacturing and R&D facilities
Dr. Reddy's Laboratories has announced that Mr. Deepak Sapra has resigned from his position as CEO, API and Services, and as a Senior Management Personnel of the company. His cessation will take effect from the close of business hours on November 12, 2026, to pursue outside opportunities. The announcement allows for an approximate 3-month transition window before his departure.
- Deepak Sapra resigned as CEO, API and Services and Senior Management Personnel.
- Cessation effective from the close of business hours on November 12, 2026.
- Reason cited for departure is to pursue opportunities outside the company.
- Notice provides a ~3-month transition period from the intimation date of August 13, 2026.
Dr. Reddy's Laboratories has announced the resignation of Mr. Deepak Sapra, the CEO of its API and Services division and a member of the Senior Management Personnel. Mr. Sapra will continue in his role until the close of business hours on November 12, 2026, providing a three-month transition period. This departure involves a key leader in a company with TTM revenue of ₹29,179 crore and a global footprint of 32 manufacturing and R&D plants. The company has not yet named a successor for this critical business vertical.
- Mr. Deepak Sapra to step down as CEO, API and Services, effective November 12, 2026
- The resignation is to pursue opportunities outside the company
- Dr. Reddy's reported TTM revenue of ₹29,179 crore and TTM PAT of ₹4,247 crore
- The company maintains a network of 32 manufacturing and R&D facilities globally
- Current operating profit margin (OPM) stands at 19.8% as of the latest TTM data
Financial Performance
Revenue Growth by Segment
Global Generics (GG) revenue grew 17% in FY2025 to INR 32,553.5 Cr, while PSAI (Pharmaceutical Services and Active Ingredients) margins were 27.1%. In Q2 FY2026, total revenue reached INR 8,805 Cr, a 10% YoY increase driven by broad-based growth and the acquired Consumer Healthcare business.
Geographic Revenue Split
Revenue is diversified across North America, India, Europe, and Emerging Markets. North America and Europe experienced price erosion in FY2025, while India and Emerging Markets were bolstered by the acquisition of the Stugeron brand (INR 100 Cr revenue size).
Profitability Margins
Gross Profit Margin stood at 54.7% in Q2 FY2026, down from 59.6% YoY due to price erosion and product mix changes. Profit After Tax (PAT) for Q2 FY2026 was INR 1,437 Cr (16.3% margin), representing a 14% YoY increase.
EBITDA Margin
EBITDA margin for Q2 FY2026 was 26.7% (INR 2,351 Cr), a 174 bps decline YoY. The underlying EBITDA margin, adjusting for a one-time VAT provision, was 27.5%. Management targets a return to 25% EBITDA margins by FY2027 despite the tapering of high-margin Lenalidomide sales.
Capital Expenditure
Annual capex is projected between INR 1,500 Cr and INR 2,000 Cr, primarily funded through internal accruals. Historical capex was utilized for plant expansions and strategic brand acquisitions like the Nestlé Consumer Healthcare business.
Credit Rating & Borrowing
Maintains an [ICRA]AA+ (Stable) rating. Financial profile is robust with an interest coverage ratio of 46.4x and a total debt/OPBDITA of 0.3x as of FY2024. Net cash surplus stood at INR 2,751 Cr ($310 million) in Q2 FY2026.
Operational Drivers
Raw Materials
Key inputs include Active Pharmaceutical Ingredients (APIs) and intermediates. Cost of Revenues reached INR 3,991 Cr in Q2 FY2026, a 23% YoY increase, reflecting higher volumes and the impact of acquired businesses.
Import Sources
Sourced globally to support 32 manufacturing and R&D facilities across 83 markets served. Specific country splits are not disclosed, but operations are exposed to global supply chain dynamics.
Capacity Expansion
Operates 32 manufacturing and R&D plants globally. Expansion is focused on complex generics, biosimilars, and capacity for the newly acquired Consumer Healthcare portfolio.
Raw Material Costs
Cost of revenues as a % of revenue increased to 45.3% in Q2 FY2026 from 40.4% YoY. Procurement strategies focus on internal API production (PSAI segment) to mitigate external price volatility.
Manufacturing Efficiency
Annualized RoCE stood at ~22% in Q2 FY2026, down from 28% in FY2025, reflecting the deployment of cash into lower-yielding immediate-term acquisitions.
Logistics & Distribution
Distribution spans 83 markets. Selling, General & Administrative (SG&A) expenses were INR 2,644 Cr in Q2 FY2026 (30% of revenue), up 15% YoY due to investments in the consumer healthcare business.
Strategic Growth
Expected Growth Rate
13-15%
Growth Strategy
Growth is driven by a 'triple-play' strategy: strengthening the core generics business, advancing a complex pipeline (Semaglutide, Abatacept), and aggressive M&A. Recent deals include the Nestlé Consumer Healthcare acquisition and the Stugeron brand for INR 420 Cr ($50M).
Products & Services
Generic medicines (Lenalidomide capsules), APIs, Biosimilars (Semaglutide), and Consumer Healthcare products (NRT business, Stugeron).
Brand Portfolio
Stugeron, Revlimid (generic version: Lenalidomide).
New Products/Services
Launched Lenacapavir for HIV prevention in LMICs. 85 filings are pending US FDA approval, including 17 expected First-to-File (FTF) statuses which provide 180-day exclusivity and higher revenue potential.
Market Expansion
Expanding presence in India and Emerging Markets through brand acquisitions. The Stugeron acquisition targets the India and Emerging Markets vertigo treatment segment.
Market Share & Ranking
Established as one of the leading Indian pharmaceutical companies with a presence in 83 markets.
Strategic Alliances
Partnered with Unitaid, Clinton Health Access Initiative, and Wits RHI for HIV tools. Collaborating with Nestlé for the Nutraceuticals subsidiary (49% ownership by Nestlé India).
External Factors
Industry Trends
The industry is shifting toward complex generics and biosimilars (e.g., Semaglutide) as simple generics face 10-15% annual price erosion. Dr. Reddy's is positioning itself through 17 potential FTF filings to capture high-value windows.
Competitive Landscape
Faces intense competition in the US generics market from other Indian and global players, leading to price erosion in select products.
Competitive Moat
Moat is built on R&D scale (7-9% of revenue) and a massive filing pipeline (85 pending approvals). This is sustainable due to a net cash position of INR 2,751 Cr, allowing for continuous reinvestment without debt pressure.
Macro Economic Sensitivity
Vulnerable to global healthcare policy changes and inflation in raw material costs which increased cost of revenues by 23% YoY in Q2 FY2026.
Consumer Behavior
Increasing demand for affordable HIV prevention (Lenacapavir) and weight management (Semaglutide) is shaping the R&D pipeline.
Geopolitical Risks
Operations in 83 markets expose the company to trade barriers and regulatory scrutiny from the US FDA, US SEC, and US DoJ.
Regulatory & Governance
Industry Regulations
Subject to US FDA, US SEC, and US DoJ scrutiny. Successfully resolved past non-compliances, but ongoing maintenance of high manufacturing standards is critical to avoid import bans.
Environmental Compliance
Targeting carbon neutrality in Scope 1 and 2 by 2030. Achieved water positivity and 42% renewable power usage as of FY2023.
Taxation Policy Impact
Effective tax rate was 22.2% in Q2 FY2026 (INR 408 Cr). FY2025 tax expense was INR 1,953.9 Cr (25.4% of PBT).
Legal Contingencies
Faces ongoing investigations and product litigations. An impairment charge of INR 66 Cr was taken in Q2 FY2026, including INR 54 Cr for the Middleburgh facility following the discontinuation of the Conjugated Estrogen pipeline product.
Risk Analysis
Key Uncertainties
Adverse outcomes from ongoing lawsuits or US FDA inspections could significantly impact liquidity and market access. Tapering of Lenalidomide revenue poses a margin risk (potential drop below 25% EBITDA).
Geographic Concentration Risk
Significant revenue dependency on North America, where price erosion is a persistent threat to the 62% GG gross margins.
Technology Obsolescence Risk
Mitigated by investing 7-9% of revenue into R&D for biosimilars and complex generics to replace aging generic portfolios.
Credit & Counterparty Risk
Receivables quality is high, supported by a strong liquidity position and INR 6,133 Cr in cash and liquid investments as of March 2024.
