v3.26.1
Employee benefits
 12 Months Ended
Mar. 31, 2026
Disclosure of defined benefit plans [abstract]  
Employee benefits
26.
Employee benefits
 
Total employee benefits expenses, including share-based payments, incurred during the years ended March 31, 2026, 2025 and 2024 amounted to Rs.59,909, Rs.55,800, and Rs.50,300, respectively.
 
A.
Impact of the New Labour Codes:
 
The Government of India has consolidated 29 existing labour legislations into a unified framework comprising four labour codes as follows: Code on Wages, 2019, Code on Social Security, 2020, Industrial Relations Code, 2020 and Occupational Safety, Health and Working Conditions Code 2020 (collectively referred to as the “New Labour Codes”). The New Labour Codes are effective from November 21, 2025 and introduce changes that include, among other things, setting a uniform definition of wages. The New Labour Codes have implications on employee benefits including gratuity, leave encashment, and other related obligations.
 
The Company has assessed the implications of the New Labour Codes and has recognized an incremental cost of Rs.1,170 towards employee benefits during the year ended March 31, 2026. The Company continues to monitor the developments pertaining to the implementation of the New Labour Codes, including related rules there to and the impact of these will be accounted in accordance with applicable accounting standards.
 
B.
Gratuity benefits provided by the parent company
 
In accordance with applicable Indian laws, the parent company has a defined benefit plan which provides for gratuity payments (the “Gratuity Plan”) and covers certain categories of employees in India. The Gratuity Plan provides a lump sum gratuity payment to eligible employees at retirement or termination of their employment. The amount of the payment is based on the respective employee’s last drawn salary and the years of employment with the Company. Effective September 1, 1999, the Company established the Dr. Reddy’s Laboratories Gratuity Fund (the “Gratuity Fund”) to fund the Gratuity Plan. Liabilities in respect of the Gratuity Plan are determined by an actuarial valuation, based upon which the Company makes contributions to the Gratuity Fund. Trustees administer the contributions made to the Gratuity Fund.
 
The components of gratuity cost recognized in the income statement for the years ended March 31, 2026, 2025 and 2024 consist of the following:
 
 
 
For the Year Ended March 31,
 
 
 
2026
 
 
2025
 
 
2024
 
Current service cost
 
Rs.
512
 
 
Rs.
432
 
 
Rs.
389
 
Interest on defined benefit liability
 
 
27
 
 
 
19
 
 
 
(7
)
Past service cost
 
 
901
 
 
 
-
 
 
 
-
 
Gratuity cost recognized in income statement
 
Rs.
1,440
 
 
Rs.
451
 
 
Rs.
382
 
 
Details of the employee benefits obligations and plan assets are provided below:
 
 
 
As of March 31,
 
 
 
2026
 
 
2025
 
P
r
e
s
e
nt v
a
l
ue of funded ob
l
i
g
a
t
i
ons
 
Rs.
4,965
 
 
Rs.
3,863
 
F
a
i
r
v
a
l
ue of p
l
a
n
a
ss
e
t
s
 
 
(4,981
)
 
 
(3,339
)
Net defined benefit liability r
e
c
og
n
i
z
e
d
 
Rs.
(16
)
 
Rs.
524
 
 
Details of changes in the present value of defined benefit obligations are as follows:
 
 
 
As of March 31,
 
 
 
2026
 
 
2025
 
D
e
f
i
n
e
d
b
e
n
e
f
i
t o
b
l
i
g
a
t
i
ons
a
t
t
he b
e
g
i
nn
i
ng of
t
he
y
e
a
r
 
Rs.
3,863
 
 
Rs.
3,404
 
Current s
e
r
v
i
c
e
c
o
s
t
 
 
512
 
 
 
432
 
In
t
e
r
e
s
t on defined obligations
 
 
256
 
 
 
225
 
Past service cost
 
 
901
 
 
 
-
 
Re-measurements due to:
 
 
 
 
 
 
 
 
   Actuarial loss/(gain) due to change in financial assumptions
 
 
(109
)
 
 
102
 
   Actuarial loss/(gain) due to demographic assumptions
 
 
92
 
 
 
(35
)
   Actuarial loss/(gain) due to experience changes
 
 
(63
)
 
 
72
 
B
e
n
e
f
it
s p
a
i
d
 
 
(484
)
 
 
(330
)
Liabilities transferred
(1)
 
 
(3
)
 
 
(7
)
D
e
f
i
n
e
d
b
e
n
e
f
i
t o
b
l
i
g
a
t
i
ons
a
t
t
he
e
nd
o
f
t
he y
e
a
r
 
Rs.
4,965
 
 
Rs.
3,863
 
 
(1)
Liabilities transferred:
·
During the year ended March 31, 2026, an amount of Rs.3 (rounded to the nearest million) represents the transfer of liabilities on account of transfer of employees between the parent company and its subsidiaries.
·
During the year ended March 31, 2025, an amount of Rs.7 (rounded to the nearest million) represents the transfer of liabilities on account of transfer of employees between the parent company and its subsidiaries.
 
 
 
Details of changes in the fair value of plan assets are as follows:
 
 
 
As of March 31,
 
 
 
2
026
 
 
2
025
 
Fair value of plan assets at the beginning of the year
 
Rs.
3,339
 
 
Rs.
3,064
 
Employer contributions
 
 
1,844
 
 
 
362
 
Interest on plan assets
 
 
229
 
 
 
206
 
Re-measurements due to:
 
 
 
 
 
 
 
 
   Return on plan assets excluding interest on plan assets
 
 
54
 
 
 
37
 
Benefits paid
 
 
(484
)
 
 
(330
)
Assets transferred
(1)
 
 
(1
)
 
 
-
 
Plan assets at the end of the year
 
Rs.
4,981
 
 
Rs.
3,339
 

(1)
 Assets transferred:
·
During the year ended March 31, 2026, an amount of Rs.1 represents the transfer of plan assets on account of the transfer of employees between the parent company and its subsidiaries.
·
During the year ended March 31, 2025, an amount of Rs.0 represents the transfer of plan assets on account of the transfer of employees between the parent company and its subsidiaries.
 
Sensitivity Analysis:
 
 
 
As of
March 31, 2026
 
 
Defined benefit obligation without effect of projected salary growth
 
 
3,212
 
Add: Effect of salary growth
 
 
1,753
 
Defined benefit obligation with projected salary growth
 
 
4,965
 
Defined benefit obligation, using salary growth rate plus 50 basis points
 
 
5,121
 
Defined benefit obligation, using salary growth rate minus 50 basis points
 
 
4,816
 
Defined benefit obligation, using discount rate minus 50 basis points
 
 
5,123
 
Defined benefit obligation, using discount rate plus 50 basis points
 
 
4,815
 
 
 
Summary of the actuarial assumptions:
The actuarial assumptions used in accounting for the Gratuity plan are as follows:
 
 
 
For the Year Ended March 31,
 
 
 
2026
 
 
2025
 
 
2024
 
Discount rate
 
 
6.90
%
 
 
6.65
%
 
 
7.15
%
Rate of compensation increase
 
 
8.00
%
 
 
8.10
%
 
 
8.10
%
 
Disaggregation of plan assets:
The Gratuity Plan’s weighted-average asset allocation as of March 31, 2026 and 2025, by asset category, was as follows:
 
 
 
As of March 31,
 
 
 
2026
 
 
2025
 
Funds managed by insurers
 
 
100
%
 
 
100
%
 
The expected future cash flows in respect of gratuity as of March 31, 2026 were as follows:
 
Expected contribution
 
Amount
 
During the year ended March 31, 2027 (estimated)
 
Rs.
-
 
 
 
 
 
 
Expected future benefit payments
 
 
 
 
March 31, 2028
 
 
743
 
March 31, 2029
 
 
709
 
March 31, 2030
 
 
633
 
March 31, 2031
 
 
570
 
Thereafter
 
 
5,682
 
 
The weighted average duration to the payment of these cash flows at the year ended March 31, 2026 is 6.19 years (March 31, 2025 : 5.40 years)
 
 
 
 
Provident fund benefits
 
Certain categories of employees of the Company receive benefits from a provident fund, a defined contribution plan. Both the employee and employer each make monthly contributions to a government administered fund equal to 12% of the covered employee’s qualifying salary. The Company has no further obligations under the plan beyond its monthly contributions. The Company contributed Rs.1,594, Rs.1,464 and Rs.1,316 to the provident fund plan during the years ended March 31, 2026, 2025 and 2024, respectively.
 
Superannuation benefits
 
Certain categories of employees of the Company participate in superannuation, a defined contribution plan administered by the Life Insurance Corporation of India. The Company makes monthly contributions based on a specified percentage of each covered employee’s salary. The Company has no further obligations under the plan beyond its monthly contributions. The Company contributed Rs.142, Rs.151, and Rs.133 to the superannuation plan during the years ended March 31, 2026, 2025 and 2024, respectively.
 
Other contribution plans
 
In the United States, the Company sponsors a defined contribution 401(k) retirement savings plan for all eligible employees who meet minimum age and service requirements. The Company contributed Rs.163, Rs.241 and Rs.225 to the 401(k) retirement savings plan during the years ended March 31, 2026, 2025 and 2024, respectively. The Company has no further obligations under the plan beyond its monthly matching contributions.
 
In the United Kingdom, certain social security benefits (such as pension, unemployment and disability) are funded by employers and employees through mandatory National Insurance contributions. The contribution amounts are determined based upon the employee’s salary. The Company has no further obligations under the plan beyond its monthly contributions. The Company contributed Rs.194, Rs.293 and Rs.251 to the National Insurance during the years ended March 31, 2026, 2025 and 2024, respectively.
 
Compensated absences
 
The Company provides for accumulation of compensated absences by certain categories of its employees. These employees can carry forward a portion of the unutilized compensated absences and utilize them in future periods or receive cash in lieu thereof as per the Company’s policy. The Company records a liability for compensated absences in the period in which the employee renders the services that increases this entitlement. The total liability recorded by the Company towards this obligation was Rs.1,018 and Rs.939 as of March 31, 2026 and 2025, respectively.