Dr. Reddy’s Q3FY25 Revenue Hits Record, Profit Up 2.5%

Hyderabad-based Dr. Reddy’s Laboratories (DRL) posted a 2.5% year-on-year (YoY) increase in consolidated net profit for Q3FY25, reaching ₹1,413 crore. The pharmaceutical giant also recorded its highest-ever quarterly revenue from operations, up 16% YoY to ₹8,358.6 crore, driven by strong performance in the European and emerging markets and contributions from its newly acquired nicotine replacement therapy (NRT) portfolio.  

Sequentially, the net profit rose by 13%, and revenue increased by 4% from ₹1,255.3 crore and ₹8,016.2 crore, respectively, in Q2FY25. DRL’s co-chairman and managing director, GV Prasad, credited this growth to the NRT portfolio, new launches, and operational efficiencies, emphasizing the company's commitment to improving healthcare through access, affordability, and innovation.  

Key Financial Highlights 

• NRT Portfolio Impact: Revenue growth excluding the NRT portfolio was 7.5% YoY, while the acquired NRT business contributed ₹605 crore to Q3 revenue.  
• EBITDA Performance: Earnings before interest, tax, depreciation, and amortization (EBITDA) grew by 8.9% YoY to ₹2,298 crore. However, the EBITDA margin declined to 27.5% in Q3FY25 from 29.3% in the previous year.  

Segment-wise Revenue Analysis  

1. Global Generics (GG): Revenue rose 17% YoY, supported by new product launches and increased sales volumes across key markets.  

2. Pharmaceutical Services and Active Ingredients (API): The segment posted a 5% YoY growth.  

3. European Markets: Revenue surged by 143% YoY to ₹1,209.6 crore, driven by the NRT portfolio, new launches, and robust base business.  

4. Emerging Markets: Revenue grew 12% YoY due to market share expansion and new product introductions, with Russia and Rest of World (RoW) regions being key contributors.  

5. North America: Revenue from the North American market, which accounts for 40% of DRL's total revenue, was flat, increasing marginally by 1% YoY to ₹3,383.4 crore. While there was volume growth, new launches, and favorable forex, price erosion offset these gains.  

Stock Performance  

Despite the strong financial performance, DRL’s shares closed 0.54% lower at ₹1,289.35 apiece on the Bombay Stock Exchange (BSE) on the day of the results announcement, which came after market hours.  

Conclusion  

Dr. Reddy’s Laboratories showcased solid growth in Q3FY25, fueled by its diversified portfolio, international expansion, and operational improvements. While challenges like price erosion in North America persist, the company's strategic acquisitions and market expansion position it well for sustained growth.