Dr Reddy’s Q2 FY27: Revenue dips, profit falls in 2026

What the latest filing says

Dr. Reddy’s Laboratories Limited reported unaudited results for the three and six months ended September 30, 2026, in a current report filed as a foreign issuer. The numbers point to a softer quarter compared with the same period last year, with both revenue and profit lower year-on-year. The update arrives as the company heads into an important board meeting cycle to consider and approve the quarter’s financial results. Separately, broker commentary through FY27 continues to focus on execution risks and the timing of recovery in specific products.

September 2026 quarter: revenue and profit comparison

For the quarter ended September 30, 2026, Dr. Reddy’s reported revenue of ₹8,670.8 crore (₹86,708 million). This compared with ₹8,805.1 crore (₹88,051 million) a year earlier, reflecting a modest decline on a year-on-year basis. Profit for the period came in at ₹913.4 crore (₹9,134 million), versus ₹1,426.8 crore (₹14,268 million) in the comparable quarter last year. The filing described these as unaudited results.

How this fits with Q1 FY27 reported performance

Earlier, on July 22, 2026, Dr. Reddy’s announced consolidated financial results for the quarter ended June 30, 2026 under IFRS. For Q1 FY27, the company reported revenue of ₹8,070.5 crore (₹80,705 million). It also disclosed a gross margin of 46.5% and EBITDA of ₹1,008.8 crore (₹10,088 million), with an EBITDA margin of 12.5% of revenues. Profit before tax in that quarter was ₹552.6 crore (₹5,526 million). Profit after tax attributable to equity holders was ₹443.5 crore (₹4,435 million), with diluted EPS of ₹5.32.

Semaglutide provision and operational timeline

The same Q1 FY27 disclosures referenced a semaglutide provision of ₹239.7 crore (₹2,397 million). In Motilal Oswal Financial Services’ (MOFSL) July 23, 2026 update, management commentary was cited stating that commercial supply is expected to resume by November 2026. This timeline remains a key operational marker because it affects when the semaglutide-related impact eases. The quarter ended September 2026 is being tracked by investors in that context, given the earlier provision and the need to restore normal supply.

b-Abatacept: regulatory clock and expected benefits

MOFSL’s note also highlighted that the USFDA goal date for b-Abatacept remains mid-December 2026. The broker expects commercial benefits from b-Abatacept from 4Q FY27 onward. This places part of the expected upside beyond the immediate quarters, which is why FY27 is described as a transition year in the broker’s framing. The market will likely focus on whether timelines remain intact as the goal date approaches and whether commentary around launch readiness becomes more specific.

Broker stance: Neutral rating and target price

In its July 23, 2026 1Q FY27 results update, MOFSL maintained a Neutral rating on Dr Reddy’s Labs. The broker characterised FY27 as a transition year, pointing to the time needed to resolve semaglutide API quality issues and to realise commercial benefits from b-Abatacept. MOFSL expects earnings to decline in FY27 before reviving from FY28, citing the high FY26 base, current valuation, and near-term execution uncertainty. The target price was set at ₹1,125, based on 20 times 12-month forward earnings. The provided material also listed a reference price of ₹1,183, a CMP of ₹1,224.5, and a stated downside of 4.90%.

Sales, EBITDA and PAT estimates shared by the broker

MOFSL published forecast estimates for FY27E and FY28E that investors often use as an anchor for expectations. For FY27E, the broker’s sales estimate was ₹34,650 crore (₹346.5 billion), EBITDA estimate was ₹5,560 crore (₹55.6 billion), and adjusted PAT estimate was ₹3,110 crore (₹31.1 billion). For FY28E, the sales estimate was ₹38,810 crore (₹388.1 billion), EBITDA estimate was ₹8,390 crore (₹83.9 billion), and adjusted PAT estimate was ₹5,010 crore (₹50.1 billion). These estimates were presented alongside a view that the commercial benefits from b-Abatacept may start contributing from late FY27.

Board meeting and earnings call on October 23, 2026

Dr Reddy’s Laboratories has scheduled a Board meeting on October 23, 2026 to consider and approve the unaudited standalone and consolidated financial results for the quarter ending September 30, 2026. The company also indicated an earnings call on October 23 at 7:30 pm, based on the shared schedule details. Separately, a BSE-linked intimation dated September 22, 2026 noted the board meeting schedule for the same purpose. Such events typically become a key point for management commentary on product timelines, provisions, and outlook, especially after a quarter where profit has fallen year-on-year.

Other published views and ratings around the stock

The supplied material also referenced a “Sell” view from MarketsMOJO, with the rating last updated on July 13, 2026, and commentary reflecting the stock’s position as of October 22, 2026. It cited a year-to-date decline of 9.21% and a 58.96% fall in profit before tax over the last four quarters, as described in that note. The same text stated a market capitalisation of INR 97,658 crore and reported net sales of 8,100 crore and net profit of 444 crore for June 2026. In addition, the material included a separate stock report summary that referenced “third quarter 2026” revenue of ₹87.3 billion and EPS of ₹14.53, alongside full-year 2026 revenue of ₹335.9 billion and net income of ₹42.9 billion.

Key numbers at a glance

What investors will track next

The immediate focus is on management’s commentary during the October 23 board meeting and the earnings call that follows. Timelines such as the expected resumption of commercial supply by November 2026 and the mid-December 2026 USFDA goal date for b-Abatacept remain central to near-term monitoring, as presented in the broker note. Investors will also compare the September quarter performance with the Q1 FY27 metrics that included the semaglutide provision and margins disclosed under IFRS. With broker estimates projecting a rebound from FY28, near-term updates on execution and approvals are likely to shape how those estimates are interpreted.

Conclusion

Dr Reddy’s September 2026 quarter showed a year-on-year decline in revenue to ₹8,670.8 crore and profit to ₹913.4 crore, based on the unaudited filing. Broker commentary continues to frame FY27 as a transition year, with attention on semaglutide supply normalisation and b-Abatacept’s regulatory timeline. The next formal update is scheduled for October 23, 2026, when the board considers the unaudited results and management addresses questions on the earnings call later that evening.