DRREDDY Q3 FY26 earnings call.
A source-linked concall view: reported numbers, management language, guidance, commitments and risks that should carry forward.
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Revenue
₹8,753 Cr
verified against source
Revenue YoY
4.4%
reported change
EBITDA
₹2,049 Cr
latest reported figure
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Where this quarter sits.
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What the record says.
Dr. Reddy's Q3 FY26 consolidated revenue grew 4.4% YoY to ₹8,727 crore, driven by double-digit growth in base business excluding lenalidomide and favorable forex. Reported EBITDA margin of 23.5% included a one-time provision for new labor law codes; adjusted margin was 24.8%. PAT declined 14% YoY to ₹1,210 crore due to lower lenalidomide sales and pricing pressure in US/Europe generics. India business grew 19% YoY led by innovative products, while emerging markets rose 32%. Management expects semaglutide launch in India on March 21, 2026, and Canada approval by May 2026. Biosimilar abatacept BLA filed in US with approval expected end-2026. Risk: USFDA observations at Bachupally facility may delay rituximab and denosumab approvals.
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Guidance to track
- Management expects India business to sustain double-digit growth of 15% or more, with potential upside from semaglutide and further BD.
- From Q4 FY26 onwards, gross margin for global generics and PSA is expected in the 50-55% range.
- R&D spend is expected to remain in the 7-8% range, with continued investment in pipeline including biosimilars.
- Management aims to control discretionary costs so that cost growth is less than half of top-line growth.
Risks flagged
- USFDA issued a post-action letter for observations at the Bachupally biologics facility, potentially delaying rituximab and denosumab approvals.
- Management advised assuming zero lenalidomide revenue from Q4 FY26, which will impact overall revenue and margins.
- Management acknowledged that semaglutide pricing may be at the lower end of the $20-70 range due to competition, including Novo Nordisk's own generic.
- CRL for denosumab from Alvotech facility may push US approval to Q2 FY27 or later, impacting biosimilar revenue expectations.
Key quotes
- We are preparing for a launch even in Q4 and there is a scenarios like that and if not it will be in Q1 but let's say anytime between end of February to May we should expect a launch in Canada.
- You should assume that the old arrangement from Q4 is zero. Doesn't mean that will not sell but let's say just for another generic... it will help everybody.
- The growth in Russia is sustainable. Not always you'll see 21% growth every quarter but double digit healthy double digit in Russia is absolutely sustainable.
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