Dr. Reddy's Laboratories Limited — Q2 FY26 earnings call

Call held 28 Oct 2025

Management summary

TVS Motor delivered exceptional Q2 FY26 results, continuing its strong outperformance versus industry benchmarks. The company achieved record quarterly sales volumes while expanding margins through operational leverage and strategic positioning. Despite EV segment facing temporary magnet availability challenges, the company maintained growth momentum across all categories. New product launches including Apache RTX and upcoming Norton portfolio position the company well for premium segment expansion. Strong H1 performance sets positive foundation for remainder of FY26.

Highlights

  • Achieved highest ever quarterly sales in both ICE and EV segments with strong outperformance vs industry

  • Revenue grew 29% YoY to Rs 11,905 crores with sales volume growth of 23%

  • Operating EBITDA surged 40% YoY to Rs 1,509 crores with 100 bps margin expansion to 12.7%

  • Domestic ICE sales grew 21% vs industry growth of 8%, international grew 31% vs industry 26%

  • Total ICE sales growth of 23% significantly outpaced industry growth of 11%

  • 3-wheeler sales grew 41% to 53,000 units, EV 2-wheeler maintained growth at 7% despite magnet constraints

  • H1 FY26 revenue grew 25% with PBT up 36% and PAT up 36% YoY

  • Norton products scheduled for India launch by April 2026 with differentiated retail strategy

Key financials

2 periods

Headline

  • Operating Revenue
    ₹11,905 Cr
    YoY +29%
  • Operating EBITDA
    ₹1,509 Cr
    YoY +40%
  • EBITDA Margin
    12.7%
    YoY +100%
  • PBT
    ₹1,226 Cr
    YoY +37%
  • PAT
    ₹906 Cr
    YoY +37%
  • Sales Volume Growth
    23%

H1

  • Revenue
    ₹21,986 Cr
    YoY +25%
  • PBT
    ₹2,279 Cr
    YoY +36%
  • PAT
    ₹1,685 Cr
    YoY +36%

What they filed

Q4 FY26: revenue down 11.5%, net profit down 86.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ1 FY25Q2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26
Revenue7,696 8,038 8,381 8,528 8,572 +11%8,828 +10%8,753 +4%7,546 −12%
EBITDA2,130 2,076 2,273 1,998 2,174 +2%2,010 −3%1,888 −17%382 −81%
Net profit1,392 1,342 1,404 1,587 1,410 +1%1,337 −0%1,190 −15%221 −86%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Guidance & targets

Industry Growth

  • ICE Segment Growth Industry Growth · FY2026 · Medium confidence About 8%
    Overall, we are expecting about 8% growth in the ICE segment

    — K N Radhakrishnan

Product Launch

  • Norton India Launch Product Launch · Q1 FY2027 · High confidence April 2026
    We are planning to launch Norton products in India by April 2026

    — K N Radhakrishnan

EV Portfolio

  • TVS Orbiter Availability EV Portfolio · Q4 FY2026 · High confidence All India by start of Q4
    very confident that it will be available all India by start of Q4

    — K N Radhakrishnan

Market Performance

  • Outperform Industry Market Performance · Ongoing · High confidence Better than industry growth
    we are very confident about outperforming the industry, both in domestic and international markets

    — K N Radhakrishnan

Margins

  • EBITDA Improvement Margins · Going forward · High confidence Further improvement
    Company is pretty confident that we will continue to leverage scale benefits, better product mix and sustained effort on cost reduction, and this will enable us to further improve the EBITDA going forward

    — K N Radhakrishnan

Risks & concerns

  • Magnet availability constraints for EV production

    medium

    Magnet availability continued to pose challenges affecting EV 2-wheeler production in short to medium term

    Monitoring and managing

  • Market growth dependency on government policies

    low

    Growth outlook tied to GST benefits and government policy support, though recent changes are favorable

    Positive on recent changes

  • Fair value volatility in subsidiary investments

    low

    Small notional loss recognized on TVS Supply Chain shares due to market price movements

    Normal market-driven adjustments

Q&A highlights

2 direct
Impairment provisions and fair value assessment Direct
we do get a fair valuation of all the companies and only based on that, the consolidation happens

Clarifies valuation methodology and transparency in subsidiary assessments

Asked by Kumar Rakesh

International expansion strategy and market dynamics Direct
Africa is growing, the demand is growing, and we are witnessing increase on quarter-on-quarter sales. LatAm region is also growing

Provides insight into international growth drivers and market opportunities

Asked by Not specified

1 min read 4 chapters

Detailed narrative

Strong Outperformance Across All Segments

TVS Motor delivered exceptional Q2 performance with significant market share gains across all categories. Domestic ICE sales grew 21% versus industry 8%, international sales grew 31% versus industry 26%, and total ICE grew 23% versus industry 11%. The company achieved highest quarterly sales volumes in both ICE and EV segments, demonstrating the strength of its product portfolio and market execution capabilities.

Robust Financial Performance and Margin Expansion

Revenue growth of 29% coupled with strong operational leverage resulted in 40% EBITDA growth and 100 bps margin expansion to 12.7%. H1 FY26 showed consistent momentum with 25% revenue growth and 36% profit growth. The company's ability to scale efficiently while maintaining pricing discipline has resulted in sustained profitability improvements.

Strategic Product Portfolio and Norton Positioning

The company launched Apache RTX adventure rally tourer and celebrated 20 years of Apache brand with exclusive limited edition models. Norton unveiled its flagship Super Bike design at EICMA with plans for India launch by April 2026 and differentiated retail strategy. iQube crossed 700,000 units domestically, while newly launched TVS Orbiter will provide additional EV momentum.

Positive Outlook Driven by Policy Support

Management expressed confidence in Q3 growth driven by GST rate reduction benefits passed to customers. IMF's upward revision of India GDP forecast to 6.6%, above normal monsoon supporting rural demand, and 24% festive season industry growth provide strong foundation. Company expects to continue outperforming industry growth rates across domestic and international markets.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Healthcare earnings calls