Dr Reddy's Labs Q3 earnings: Profit falls 14% to Rs 1,210 crore; revenue up 4%

Dr Reddy's Laboratories on Wednesday reported a 14 per cent decline in its consolidated net profit at Rs 1,209.8 crore for the third quarter ended December 31, 2025, weighed down by lower sales in its North American generics business and a one-time provision for employee benefits. The Hyderabad-based drug major had posted a net profit of Rs 1,413.3 crore in the corresponding quarter of the previous fiscal.

Despite the dip in bottom-line numbers, the company's top line showed resilience. Consolidated revenue from operations rose by 4.4 per cent to Rs 8,726.8 crore in the third quarter, compared to Rs 8,358.6 crore in the year-ago period. 

Commenting on the results, Co-Chairman and Managing Director, G V Prasad said, "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." 

On the operational front, the company's EBITDA stood at Rs 2,049.3 crore for the quarter, down 11 per cent from Rs 2,298.2 crore in the same period last year. The EBITDA margin contracted to 23.5 per cent from 27.5 per cent in Q3 FY25. 

A significant factor impacting the quarter's profitability was a one-time provision related to the new Labour Codes in India. The company recognised an incremental cost of Rs 117 crore towards employee benefits during the quarter. Excluding this one-off provision, the company stated that its gross margin would have been higher at 54.1 per cent, and EBITDA margin would have stood at 24.8 per cent.