Dr. Reddy's Laboratories Ltd. announced a significant decline in its consolidated net profit for the fourth quarter of fiscal year 2026, which ended March 31. The pharmaceutical major's profit plummeted by 86% year-on-year to Rs 221 crore, a sharp contrast to the Rs 1,587 crore reported in the same period last year.
During Q4 FY26, the company's revenue from operations also saw a reduction, decreasing by 12% year-on-year to Rs 7,516 crore, down from Rs 8,506 crore in the corresponding quarter of the previous financial year. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) for the quarter stood at Rs 980 crore, reflecting a 60% year-on-year decline.
Key Factors Behind the Profit Drop
The substantial fall in profit was primarily attributed to several one-off charges and strategic decisions made during the quarter. Dr. Reddy's cited the discontinuation of certain research and development programs within its Chimeric Antigen Receptor T-cell (CAR-T) therapy portfolio. This decision, influenced by the current development status and recent clinical trial outcomes, resulted in a net loss of Rs 135 crore in the company's Global Generic segment.
Adding to these charges, the company recognized an additional impairment charge of Rs 91.4 crore related to the discontinuation of a late-stage lung cancer study. Further headwinds included a VAT liability provision of Rs 69.5 crore and costs amounting to Rs 117 crore associated with new Labour Codes implemented during the fiscal year.
Management's Perspective and Future Outlook
G V Prasad, Co-Chairman & MD of Dr. Reddy's, commented on the performance, stating, "Our performance this year reflects the impact of lower lenalidomide sales and several one-offs." He noted that the resilience of the company's branded businesses and favorable currency tailwinds helped partially mitigate these impacts.
Looking ahead, Prasad emphasized the company's commitment to strengthening its core business and improving margins through enhanced cost efficiencies and portfolio optimization. He also highlighted ongoing efforts to build long-term franchises in biosimilars, consumer health, and innovation to ensure sustainable value creation.
Dividend Announcement and Record Date
Alongside its financial results, Dr. Reddy's Board of Directors recommended a dividend of Rs 8 per equity share, representing 800% of the face value of Re 1 each, for the financial year ended March 31, 2026. This dividend recommendation is subject to shareholder approval.
The company has set July 10, 2026, as the record date for determining the eligibility of shareholders to receive this dividend.