DRREDDY
Large CapDr. Reddy's Laboratories Limited
Pharma
Dr. Reddy's Laboratories Ltd. is an integrated pharmaceutical company based in Hyderabad, India, with a global presence. It develops and manufactures APIs, generics, biosimilars, and proprietary products, serving markets including North America, Europe, India, and Emerging Markets.
One read, four checks
75+ is strong, 60-74 is usable, 45-59 is mixed, and below 45 needs caution. These are research lenses, not buy/sell instructions.
Weak fundamentals, management trust is acceptable, price trend is neutral, and recent execution is weak.
Fundamental lens: valuation, quality, growth, balance sheet, and cash flow.
low confidence · 0/0 claims checked
Timing lens: price trend and sector relative strength.
Rolling lens: recent quarterly delivery, not the latest single-result score.
Quarter ended 31 Mar 2026
Bad · 0/100Rev -12% YoY · PAT -86% YoY · margin compression
| Metric | This quarter | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹7,546 Cr | -11.5% | -13.8% |
| EBITDA | ₹382 Cr | -80.9% | -79.8% |
| Operating margin | 5.0% | -1800 bps | -1700 bps |
| PAT | ₹221 Cr | -86.1% | -81.4% |
| PAT margin | 2.9% | -1568 bps | -1067 bps |
NDF means not disclosed in the current structured filing feed. It is intentionally not treated as zero.
Where growth can come from, and what can break the case
Q4FY26 reported revenues grew 12% YoY to ₹7,516 Cr, but EBITDA margin was 13% due to ₹795 Cr in specific items (lenalidomide SSA, CAR-T/Eftilagimod impairment, VAT provision). Excluding these, EBITDA margin was 19.5%. FY26 revenues grew 3% YoY to ₹33,593 Cr.
Headline Q4FY26 growth is misleading due to significant one-time adjustments. North America, a key market, saw a substantial decline (38% YoY) excluding lenalidomide SSA. While other geographies show growth, the materialization of R&D risks (CAR-T, Eftilagimod) and ongoing pricing pressure in some markets warrant caution.
Q4FY26 Revenue Split by Segment
Latest issuer-disclosed distribution across 2 reported categories.
New Product Launches
New product launches, particularly in Russia & RoW, India (innovation portfolio, new brands), and Europe, are driving growth.
Acquired NRT Business
Performance aided by acquired NRT business, with 95% of its value integrated as of March 2026, contributing to Europe's growth.
CDMO Business Traction
The CDMO business under Aurigene Pharmaceutical Services Limited continues to see good traction, contributing to PSAI's QoQ growth.
Favorable Forex
Favorable forex contributed to growth in Emerging Markets and Europe.
Acquired NRT Business Integration
Completed integration of 95% of acquired NRT business by value as of March 2026, contributing to revenue.
Favorable Forex
Favorable forex contributed to growth in Emerging Markets and Europe.
Lenalidomide Sales & SSA Impact
Lower lenalidomide sales and a one-time shelf stock adjustment (SSA) of ₹453 Cr significantly impacted North America revenues.
R&D Pipeline Impairment
Impairment of CAR-T & Eftilagimod Alfa (licensed) of ₹228 Cr, following discontinuation of Eftilagimod alfa trial by partner.
Provision for VAT Liability
A provision for VAT liability of ₹114 Cr in Q4FY26 impacted profitability.
Price Erosion
Price erosion was noted in Emerging Markets (RoW) and Europe, partially offsetting growth drivers.
R&D Pipeline Failure
Discontinuation of trial for licensed novel drug, Eftilagimod alfa, by partner following interim futility analysis, and discontinuation of certain CAR-T R&D programs.
Product-Specific Headwinds
North America performance was impacted by lower lenalidomide sales and product-specific headwinds, leading to significant revenue decline when adjusted.
Regulatory Compliance
Ongoing need to maintain quality and compliance, as evidenced by the USFDA 'VAI' classification for a formulations facility.
What management said, and what results must prove
Issuer guidance and extracted claims are tracked against later reported outcomes. Treat these as management statements, not IndiaPulse forecasts.
Both YoY and QoQ comparisons are relevant. YoY provides a view of annual performance and seasonal trends, while QoQ highlights sequential momentum, especially given the significant one-time adjustments impacting Q4FY26 results.
Domestic Formulations Growth (India)
India revenues grew 20% YoY and 2% QoQ in Q4FY26, outperforming the Indian Pharmaceutical Market (IPM) with DRL growth of 15.2% vs IPM's 11.6% (MQT Mar'26).
US/Export Growth (North America)
North America revenues were ₹1,756 Cr, up 51% YoY and 41% QoQ. However, excluding a ₹453 Cr lenalidomide shelf stock adjustment (SSA), revenues declined 38% YoY and 25% QoQ.
Launch Pipeline & Approvals
Secured approval for generic semaglutide injection in Canada and tablets in India. BLA for abatacept biosimilar (IV) accepted by USFDA. Launched 7 new products in North America (Q4FY26) and 49 in Emerging Markets.
USFDA Observations
Received 'VAI' classification by USFDA for FTO-SEZ PU-01 formulations facility (Srikakulam) following a GMP & PAI inspection.
Strengthen Core & Build Future Drivers
Management aims to strengthen core businesses and build future growth drivers in areas like Peptides, Biosimilars, Consumer Health, and Innovation.
Advance Key Pipeline Products
Focus on advancing key pipeline products such as Semaglutide and Abatacept.
Drive Efficiencies
Management intends to drive efficiencies through better operational leverage and enhance capabilities in People, Digital, and Processes.
Augment Growth via M&A/In-Licensing
The company plans to augment organic growth with M&A and In-Licensing activities.
Numbers and claims to verify in the next filings
| Checkpoint | Current evidence | What to verify next |
|---|---|---|
| North America Revenue (excl. Lenalidomide SSA) | ₹2,209 Cr (excl. SSA), declined 38% YoY, 25% QoQ in Q4FY26. | Sustained recovery and growth in the underlying North America business, independent of one-time product impacts. |
| EBITDA Margin (excl. specific items) | 19.5% in Q4FY26. | Consistency and improvement in adjusted EBITDA margin, indicating underlying operational efficiency and profitability. |
| R&D Pipeline Progress | BLA for abatacept biosimilar accepted by USFDA; generic semaglutide approved in Canada/India. | Successful approvals and commercialization of key pipeline products like abatacept and semaglutide, and new ANDA filings. |
| CDMO Business Traction | CDMO business under Aurigene continues to see good traction. | Continued growth and contribution from the CDMO segment to PSAI revenues. |
Verification checkpoints are IndiaPulse research interpretation, not investment advice.
Trend score and candlestick chart
54NeutralSMA20 +2.9% / mo
Technical chart
DRREDDYdaily · 3Y+4.7%Technical trend read
NeutralTrend is undirectional — long-term trend unclear. RSI 43.
- SMA20 rising (~1.4% over last month) — short-term momentum positive.
- RSI(14) at 43 — sideways, no extreme reading.
- MACD below signal but histogram contracting — bearish momentum easing.
- 8% off 52W high · 10% above 52W low.
Mechanical read from the price + indicator series above. Not a recommendation — technical setups can reverse without warning, especially around earnings and macro events.
Valuation, score drivers, trust methodology, financials, and peers
Use these sections after reviewing the decision summary, latest result, thesis, management accountability, and technical timing above.
Fundamental score breakdown
WATCHLISTWhy this score?
Top U-Score contributors and drags from the latest stored fundamentals.
Positive drivers
- Piotroski is strong at 8/9.
- Fair-value margin of safety is positive at 39.9%.
- Growth contributes 15/25 to the score.
Main drags
- Quality is weaker at 0/20; verify the latest quarterly trend.
- Valuation is weaker at 10/30; verify the latest quarterly trend.
- Cash flow is weaker at 4/10; verify the latest quarterly trend.
Healthcare valuation: PE/EVEBITDA with regulatory and pipeline checks
Healthcare valuation needs both earnings quality and regulatory/pipeline context.
Stored run vs live recompute
This shows the stored score trend when snapshots exist, and also compares the latest stored nightly score with a live recompute from current fundamentals and price.
Score history
12 stored score snapshots. Latest stored move: +0 points.
Factor attribution
Trust asks: does management behaviour match later outcomes? Higher is better, but confidence and evidence depth matter as much as the number.
Mixed Trust: Claim history is still being built. It ranks around the 38th percentile of the scored universe and 27th percentile within Pharma. Main check: results consistency is weak at 36/100.
Healthy Trust Lite: Promoter pledge is zero. Key concern: ROCE trend is -7.7%.
Usable, but needs evidence. Treat guidance with a margin of safety.
overall median 67 · Pharma: 27th pctile, median 70 · Large: 19th pctile, median 74
81 documents indexed, but claim history is not strong enough yet.
0 claims extracted · No contradicted claim yet
How to read this Trust Score
Mixed Trust · low confidenceRead Trust alongside U-Score, result consistency, and technical trend. A cheap stock with weak Trust needs a larger margin of safety; a high Trust score does not make an expensive stock attractive by itself.
Forensic breakdown
Read low sub-scores as due-diligence warnings, not automatic sell signals.
Trust positives
- ▸Promoter pledge is zero.
- ▸10 years of positive FCF.
- ▸3/4 latest quarters had positive YoY revenue growth.
Trust risks
- ▸ROCE trend is -7.7%.
- ▸Revenue CAGR is 11% but EPS CAGR is -3%.
- ▸1/4 latest quarters had positive YoY PAT growth.
- ▸1 of the latest 4 quarters had PAT decline worse than 25% YoY.
Trust Lite uses financial behaviour only. Prefer claim-tested Trust when enough concall claims have later outcomes.
Intrinsic value
Fundamentals
Valuation
- P/E
- 25.40
- P/B
- 2.81
- EV/EBITDA
- 14.00
- Market Cap
- 106470.00Cr
Profitability
- ROE
- 11.80%
- ROCE
- 13.60%
- ROA
- 7.15%
- Dividend Y
- 0.63%
Growth (CAGR)
- Revenue 5Y
- 12.00%
- EPS 5Y
- 17.00%
- Revenue 3Y
- 11.00%
- EPS 3Y
- -3.00%
Balance Sheet
- Debt/Equity
- 0.20
- Interest Coverage
- 17.26×
- Altman Z
- 5.25
- Book Value
- 454.00
Cash Flow
- FCF Yield
- —
- FCF Positive Y
- 10/5
- OCF
- 5674.00 Cr
- EPS TTM
- 50.27
Shareholding
- Promoter Hold
- 26.63%
- Promoter Pledge
- 0.00%
- Momentum 52W
- 55%
Financial History
Updated 9/6/2026
Revenue
₹ CrNet Profit
₹ CrReturn on Equity
%Peers
Business-comparable peers in Pharma — ranked by industry, sub-sector, theme-tag overlap, market cap, and U-Score similarity. Green cells mark the best available peer metric in this table.