Dr. Reddy's Laboratories Margin Trend — Quarter by Quarter

Dr. Reddy's Laboratories's EBITDA margin moved from 31.7% in Q1 FY24 to 5.0% in Q4 FY26 across 12 quarters. Management commentary below explains the cost and pricing drivers mentioned on calls.

EBITDA Margin by Quarter

Quarter	EBITDA Margin (%)	YoY Change
Q4 FY26	5.0%	—
Q3 FY26	22.0%	-401 bps
Q2 FY26	23.0%	-174 bps
Q1 FY26	26.7%	-149 bps
Q4 FY25	29.1%	+267 bps
Q3 FY25	27.5%	-176 bps
Q2 FY25	26.0%	-326 bps
Q1 FY25	28.2%	-357 bps
Q4 FY24	26.4%	+53 bps
Q3 FY24	29.3%	—
Q2 FY24	31.7%	—
Q1 FY24	31.7%	—

What management said about ebitda margin

Q4 FY26 · FY27 gross margin above 50%

Management expects gross margins to improve above 50% in FY27, driven by semaglutide launches and cost improvement programs.

Q4 FY26 · FY27 EBITDA margin near 25% with semaglutide

EBITDA margin is expected to approach 25% in FY27, aided by semaglutide sales, though may be slightly below.

Q3 FY26 · Global generics gross margin range 50%-55% post-lenalidomide

From Q4 FY26 onwards, without lenalidomide, global generics and PSAI gross margin expected in 50%-55% range.

Q2 FY26 · EBITDA margin to return to 25%+ in two years

Management maintains commitment to achieving 25%+ EBITDA margins within the next two years, driven by cost efficiencies and pipeline growth.

Q2 FY26 · PSAI gross margin to improve to 20-25%

CFO guided PSAI gross margin to be in the 20-25% range going forward, up from 18% in Q2.

Q1 FY26 · EBITDA margin aspiration of 25%+ for base business

Aims to maintain EBITDA margin north of 25% for the base business, with semaglutide expected to be accretive.

Q4 FY25 · EBITDA margin maintained at ~28% in FY26

Management guided for EBITDA margins to remain around 28% in FY2026, similar to FY2025 levels, through productivity measures and revenue growth.

Q3 FY25 · SG&A expenses to remain around 28% of sales

Management indicated SG&A as a percentage of sales will stay at current levels (~28%) going forward.

Q2 FY25 · SG&A spend to be 27.5%-28% of sales for FY25

Management expects SG&A as a percentage of sales to be in the range of 27.5%-28% for the full fiscal year.

Q1 FY25 · SG&A spend to be 27.5%-28% of sales for FY25

Management expects full-year SG&A as a percentage of sales to be in the range of 27.5% to 28%, despite Q1 being higher at 29.6%.

Q4 FY24 · First meaningful biosimilar launch in FY27

Internal biosimilar pipeline expected to yield first product launch in Europe and US in FY27, with profitability thereafter.

Q3 FY24 · SG&A investments to continue at elevated levels

SG&A spend will remain higher in absolute terms as investments in brands and pipeline products continue, with revenue growth expected to provide operating leverage.