Profits were below estimates of Rs 1,410 crore (ET Now Poll), hit by stiff competition for the generic version of hit cancer drug Revlimid in the key North American market.
EBITDA for the quarter rose 15% year-on-year to Rs 2,351 crore in the reporting quarter.
“The second quarter growth was driven by momentum in branded markets and steady contributions from the Nicotine Replacement Therapy (NRTJ) portfolio, which helped offset the decline in U.S. lenalidomide sales,” said GV Prasad, MD, Dr. Reddies.
North America: Price pressure slows growth
North America, which has the largest share of Dr. Reddy, remained under pressure this quarter. Revenue from the region declined 13% year-on-year and 5% sequentially to Rs 3,240 crore, mainly due to price erosion in key products such as Lenalidomide.
However, the decline was partially offset by new product launches and currency gains. During the quarter, the company launched seven new products in the US and filed five new ANDAs with the USFDA, bringing the total number of pending approvals to 75 as of September 30, 2025.
Europe: Strong momentum in acquisitions and launches
Europe delivered robust performance, with revenue up 138% year-on-year and 8% quarter-on-quarter to Rs 1,380 crore, helped by the acquisition of the nicotine replacement therapy (NRT) portfolio, new launches and higher volumes. Excluding the NRT activities, growth was 17% year-on-year. On a six-month basis, revenues rose 140% year-on-year to Rs 2,650 crore.
India: Continued double-digit growth
In India, revenues rose 13% year-on-year and 7% quarter-on-quarter to Rs 1,580 crore, supported by new product launches, improved pricing and higher demand for prescriptions. Dr. Reddy’s launched 11 new brands in the second quarter, taking the total to 16 in the first half of FY26.
Emerging markets: volume-driven growth
Emerging markets revenues grew 14% year-on-year and 18% sequentially to Rs 1,650 crore, driven by new product launches and strong volume growth across geographies. Favorable currency movements also contributed to sales growth.
PSAI and R&D
The Pharmaceutical Services and Active Ingredients (PSAI) segment recorded 12% YoY growth to Rs 940 crore, supported by new API launches and improved services revenues.
R&D expenditure for the quarter stood at Rs 620 crore, down 15% year-on-year, representing 7% of sales, compared to 9.1% a year ago. The decline was attributed to lower investments in biosimilars following the completion of the Abatacept financing, with continued focus on oncology, peptides, injectables and complex generics.
“We remain focused on strengthening our core businesses, advancing key pipeline assets, driving productivity and pursuing business development initiatives,” Prasad said.
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