Revenue from contracts with customers and trade receivables

21.

Revenue from contracts with customers and trade receivables

Revenue from contracts with customers:

For the Year Ended March 31,

(1)

For the year ended March 31, 2026, consequent to resolution of a shelf stock adjustment claim arising from

reduction in

the

price of its generic product Lenalidomide in the United States, the Company recorded an amount of Rs.4,530 (U.S.$ 50) as a reduction of “Revenue from sale of goods” in the Company's Global Generics Segment.

(2)

For the year ended March 31, 2025, the license fees includes an amount of Rs.1,266 (U.S.$15) as a milestone payment receivable upon U.S. FDA approval of DFD 29, in accordance with the license and collaboration agreement dated June 29, 2021 with Journey Medical Corporation. This transaction pertains to the Company’s Others segment.

Refer to Note 5 (“Segment reporting”) of these consolidated financial statements for details on revenues by therapeutic area, and revenues by geography.

Deferred revenue:

Tabulated below is the reconciliation of deferred revenue for the years ended March 31, 2026 and 2025.

	For the Year Ended March 31,
	2026			2025
Balance as of April 1	Rs.	1,583		Rs.	1,567
Revenue recognized during the year		(653	)		(1,799	)
Milestone payment received during the year		1,766			1,815
Balance as of March 31	Rs.	2,696		Rs.	1,583
Current		260			421
Non-current		2,436			1,162

Significant gross to net adjustments relating to Company’s North America Generics business (amounts in U.S.$ millions):

A roll-forward for each major accrual for the Company’s North America Generics business for the fiscal years ended March 31, 2024, 2025 and 2026 is as follows:

Particulars	Chargebacks			Rebates			Medicaid			Refund Liability ( 2 )
	(All amounts in U.S.$)
Beginning Balance: April 1, 2023		247			87			13			35
Current provisions relating to sales during the year *		2,844			322			31			21
Provisions and adjustments relating to sales in prior years		-			-			-			-
Credits and payments**		(2,803	)		(307	)		(25	)		(21	)
Ending Balance: March 31, 2024		288			102			19			35

Beginning Balance: April 1, 2024		288			102			19			35
Current provisions relating to sales during the year (1)		2,720			253			23			34
Provisions and adjustments relating to sales in prior years *		-			-			-			-
Credits and payments**		(2,665	)		(252	)		(29	)		(27	)
Ending Balance: March 31, 2025		343			103			13			42

Beginning Balance: April 1, 2025		343			103			13			42
Current provisions relating to sales during the year (1)		2,439			226			24			38
Provisions and adjustments relating to sales in prior years *		-			-			-			-
Credits and payments**		(2,506	)		(237	)		(27	)		(33	)
Ending Balance: March 31, 2026		276			92			10			47

Currently, the Company does not separately track provisions and adjustments, in each case to the extent relating to prior years for chargebacks. However, the adjustments are expected to be non-material. The volumes used to calculate the closing balance of chargebacks represent approximately 1.0 to 1.4 months equivalent of sales, which corresponds to the pending chargeback claims yet to be processed.

Currently, the Company does not separately track the credits and payments, in each case to the extent relating to prior years for chargebacks, rebates, Medicaid payments or refund liability.

(1)

Chargebacks provisions and payments for the year ended March 31, 2025 and March 31, 2026 were each lower as compared to the years ended March 31, 2024 and March 31, 2025, primarily as a result of reduction in the invoice price to wholesalers for few of the Company’s major products. This was offset to some extent due to higher pricing rates per unit on chargebacks, on account of reductions in the contract prices through which the product is resold in the retail part of the supply chain for certain of the Company’s products.

The Company’s overall provision for refund liability as of March 31, 2026 relating to the Company’s North America Generics business was U.S.$47, compared to a liability of U.S.$42 as of March 31, 2025. The refund liability created for new product launches and volume growth, were off-set by the reductions in the contract prices and by product mix changes.

The estimates of “gross-to-net” adjustments for the Company’s operations in India and other countries outside of the United States relate mainly to refund liability in all such operations, and certain rebates to healthcare insurance providers are specific to the Company’s German operations. The pattern of such refund liability is generally consistent with the Company’s gross sales. In Germany, the rebates to healthcare insurance providers mentioned above are contractually fixed in nature and do not involve significant estimations by the Company.

For the Year Ended March 31,

Balance at the beginning of the year

Provision made during the year, net of reversals

Provision used during the year

Effect of changes in foreign exchange rates

Balance at the closing of the year

As mentioned in the accounting policies for refund liability set forth in Note 3

(

)

of these consolidated financial statements, the Company recognizes an asset (i.e., the right to the returned goods), for the products expected to be returned. The Company initially measures this asset at the former carrying amount of the inventory, less any expected costs to recover the goods, including any potential decreases in the value of the returned goods. Along with re-measuring the refund liability at the end of each reporting period, the Company updates the measurement of the asset recorded for any revisions to its expected level of returns, as well as any additional decreases in the value of the returned products.

As of March 31, 2026 and 2025, the Company had Rs.64 and Rs.51, respectively, as contract assets representing the right to returned goods.

Contract liabilities:

Advance from customers