Dr. Reddy’s Share Price Rose 4%; Revenues Up 4.4% YoY in Q3FY26 Results

Dr. Reddy’s Laboratories Ltd announced its consolidated financial results for the quarter and nine months ended December 31, 2025. The company reported steady revenue growth despite pressure on profitability. Performance was supported by broad-based growth across most key markets and favourable foreign exchange movements, even as certain segments faced challenges.

Revenue and Market Performance

In Q3FY26, consolidated revenues stood at ₹87.3 billion, registering a year-on-year growth of 4.4%, though revenues declined marginally by 0.9% on a quarter-on-quarter basis. 

For the nine months ended FY26, revenues reached ₹260.8 billion, reflecting a healthy 8% year-on-year growth. Growth was observed across major geographies, except North America Generics, which declined primarily due to lower Lenalidomide sales.

The Global Generics segment continued to be a key growth driver. Q3FY26 Global Generics revenues were ₹79.1 billion, growing 7% year-on-year and 1% quarter-on-quarter. For 9MFY26, Global Generics revenues stood at ₹233.2 billion, up 9% year-on-year.

Profitability and Margins

Profit before tax for Q3FY26 came in at ₹15.4 billion, declining 18% year-on-year and 16% sequentially. PBT margin for the quarter stood at 17.7%, compared to 22.4% in Q3FY25. 

For the nine-month period, PBT declined 7% year-on-year to ₹52.8 billion, with margins at 20.3%. Adjusted for a one-time provision related to new Labour Codes, Q3FY26 PBT margin was healthier at 19%.

EBITDA for Q3FY26 was ₹20.5 billion, down 11% year-on-year and 13% quarter-on-quarter, with margins at 23.5%. For 9MFY26, EBITDA stood at ₹66.8 billion, reflecting a marginal 1% year-on-year decline. Excluding the one-off labour provision, Q3FY26 EBITDA margin was 24.8%.

Balance Sheet and Cash Flow Highlights

As of December 31, 2025, operating working capital stood at ₹41.4 billion. Capital expenditure during Q3FY26 was ₹6.7 billion, while free cash flow was ₹7 billion.

The company maintained a strong balance sheet with a net cash surplus of ₹30.7 billion and a negative net debt-to-equity ratio of (0.08). Annualised return on capital employed for Q3FY26 stood at 20.4%.

Commenting on the results, Co-Chairman & MD, G V Prasad said, "Our growth in Q3FY26 was supported by continued momentum in our branded businesses, aided by favourable Jorex, thus offsetting the impact of lower Lena!idomide sales. We continue to focus on disciplined execution of our strategic priorities of base business growth, pipeline advancement, operational efficiencies, and select inorganic opportunities, to create long-term value for our stakeholders."

Dr. Reddy’s Share Price Performance

On January 22, 2026, Dr. Reddy’s share price (NSE: DRREDDY) opened at ₹1,195.00, up from its previous close of ₹1,157.20. At 10:39 AM, the share price of Dr. Reddy’s was trading at ₹1,213.50, up by 4.87% on the NSE.

Also Read: Best Pharma Stocks in India in January 2026!

Conclusion

Dr. Reddy’s Laboratories delivered stable revenue growth in Q3FY26 despite headwinds in profitability. Margin pressures from higher costs and one-time provisions impacted earnings, but strong cash flows, a robust balance sheet, and diversified market presence continue to support the company’s long-term outlook.

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