Dr Reddy's Revives India Operations in FY26 with Portfolio, Productivity Overhaul

Dr. Reddy's Sharpens Focus on India Amidst Global Market Challenges

Dr. Reddy's, a leading pharmaceutical company, is making a concerted effort to strengthen its presence in the Indian market, driven by a mix of portfolio expansion, productivity gains, and targeted investments. After a period of underperformance, the company's domestic business has staged a notable turnaround over the past few quarters.

The India business has become a critical growth engine for Dr. Reddy's, contributing approximately Rs.6,200 crore to its FY26 revenue of Rs.33,593 crore, or roughly 18-19 percent of the total. India's domestic market offers stability, shielding the company from price erosion, exchange rate fluctuations, regulatory changes, and other supply chain issues that often impact overseas markets.

The recovery is evident in the numbers. Dr. Reddy's India business posted 20 percent year-on-year growth in Q4FY26, outpacing industry growth, driven by new product launches, price increases, and higher volumes. On a full-year basis, India revenue rose 16 percent, reflecting sustained momentum across branded prescription, generics, and newer segments.

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CFO M.V. Narasimham attributes the turnaround to a combination of internal execution and portfolio shifts. The company has revamped its commercial strategy, introducing leadership changes at the division level, tightening therapy focus, and increasing brand investments. Additionally, Dr. Reddy's has improved productivity rather than aggressively expanding its sales force, resulting in steady gains in per-representative productivity.

The company's focus on improving productivity has allowed it to scale revenues without materially increasing costs, enhancing operating leverage in a competitive market. However, Dr. Reddy's still faces a significant challenge in breaking into the top-5 of the Indian Pharmaceutical Market (IPM), with chronic therapies accounting for roughly one-fifth of its India revenue.

To address this imbalance, Dr. Reddy's is working to expand its chronic therapies portfolio through both organic launches and inorganic opportunities, such as brand acquisitions. The company is also exploring selective acquisitions to fill gaps in its domestic portfolio, strengthening its position in the market.

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The early payoff of these initiatives is visible in market positioning, with Dr. Reddy's improving its ranking in the Indian pharmaceutical market, moving from 10th to 9th position on a moving quarterly basis. Despite this progress, management remains cautious about the competitive intensity of the domestic market, emphasizing the importance of differentiation and execution.