Dr. Reddy's Laboratories Limited's Q1 2026 Comprehensive Earnings Conference Transcript
Dr. Reddy's Laboratories Limited, a leading pharmaceutical company, recently unveiled its Q1 FY26 earnings results on July 23, 2025. The earnings conference call, held at 10:00 AM ET, was attended by key executives including Erez Israeli, CEO, Mannam Venkatanarasimham, CFO, Richa Periwal, Head of Investor Relations and Analytics, and other members of the Management Council.
The company reported revenues of approximately ₹85.5 billion INR ($1.14 billion USD), marking an 11% year-over-year growth. However, the gross margin dipped by 350 basis points to 56.9%, primarily due to higher price erosion in the generics segment and reduced operating leverage, partially offset by a favourable product mix.
Selling, General & Administrative (SG&A) expenses rose by 13% year-over-year to ₹25.6 billion, driven by strategic investments in the consumer healthcare business, including ventures like NRT and the Nestle joint venture. Other SG&A costs remained largely stable, reflecting operational cost discipline. Research & Development expenditure was ₹6.2 billion, approximately 7.3% of revenue, slightly lower than the previous year’s first quarter percentage (8.1%).
Minor FDA Form 483 observations were noted but did not materially affect operations. The market expectations for earnings were around $0.19 per share and revenues close to ₹88.27 billion; the actual results were broadly in line with expectations.
Looking ahead, the company emphasized continuing strategic investments and innovation in complex generics and consumer healthcare while maintaining solid financials backed by a healthy balance sheet and strong free cash flow. The detailed transcript of the earnings call reveals a cautious but positive tone, focusing on managing pricing pressures, product mix optimization, and medium to long-term growth driven by R&D and market expansion efforts.
The full transcript of the conference call and more detailed financial metrics are available on the company's website. Notable participants in the call included Abdulkader Puranwala, Aman Vij, Amey Chalke, Bino Joseph Pathiparampil, Damayanti Kerai, Foram Prashant Parekh, Harith Mohammed Ahamed, Kunal Dhamesha, Madhav Marda, Fidelity Investments, Neha Manpuria, Saion Mukherjee, Shashank Krishnakumar, Shyam Srinivasan, Surya Narayan Patra, and Tushar Manudhane.
- In the Q1 FY26 earnings call, the executives discussed the company's plans to invest strategically, such as their ventures with NRT and the Nestle joint venture, which contributed to the rise in Selling, General & Administrative (SG&A) expenses.
- As the company continues to make strategic investments in complex generics and consumer healthcare, they also focus on maintaining strong financials, a point highlighted by the CEO during the conference call, where emphasis was placed on financial management backed by a healthy balance sheet and strong free cash flow.
