Dr Reddy's Q2 net profit falls to Rs 913 crore on US sales dip

What happened

Pharmaceutical major Dr Reddy's Laboratories reported a 36% decline in consolidated net profit to Rs 913.4 crore for the second quarter ended September 2026, down from Rs 1,426.8 crore in the same period last year. Total revenue from operations slipped 1.5% year-on-year to Rs 8,671 crore.

The profit decline was primarily driven by lower North American sales of generic lenalidomide, a key cancer drug. Despite these overseas headwinds, the Hyderabad-based manufacturer demonstrated strong underlying stability, propelled by expanding domestic operations and key regulatory milestones in India.

Regional performance and revenue breakdown

Global generics revenue slipped 1% to Rs 7,792.7 crore. North American sales fell 23% to Rs 2,489 crore due to generic price erosion and reduced volumes of lenalidomide.

In contrast, Dr Reddy's posted strong gains across domestic and developing markets. Indian business revenue surged 17% year-on-year to Rs 1,850.8 crore, driven by consistent market demand and portfolio expansions. Emerging markets also saw rapid growth, rising 24% to Rs 2,059.5 crore.

| Region / Segment | Q2 FY27 Revenue | Year-on-Year Growth || North America | Rs 2,489.0 crore | -23% || Emerging Markets | Rs 2,059.5 crore | +24% || India | Rs 1,850.8 crore | +17% || Europe | Rs 1,393.5 crore | +1% || PSAI | Rs 831.0 crore | -12% |

Earnings before interest, taxes, depreciation and amortisation (EBITDA) stood at Rs 1,783 crore, down 24.2% year-on-year, yielding an EBITDA margin of 20.6%.

Strategic milestones and future outlook

During the quarter, Dr Reddy's expanded its healthcare portfolio through notable partnerships and domestic product approvals. The firm secured approval from India's Central Drugs Standard Control Organisation (CDSCO) for intravenous abatacept, marking the country's first biosimilar approval for the treatment. It also launched its nivolumab biosimilar in India and partnered with Takeda for the dengue vaccine QDENGA.

Internationally, the company expanded a collaboration with Gilead Sciences for lenacapavir, an investigational HIV prevention drug, covering 120 countries, and earned US Food and Drug Administration clearance for its rituximab biosimilar.

Chief Executive Officer Erez Israeli said commercial relaunch of generic semaglutide in Canada is expected in November following temporary supply disruptions, with plans to expand sales across nine additional international markets. Co-Chairman and Managing Director G V Prasad said the business delivered double-digit base growth and remains committed to investing in long-term strategic platforms.