Dr. Reddy's Laboratories Ltd. share price target

Although the company continues to strengthen its presence through new launches, portfolio expansion, and biosimilar development, persistent pricing pressure in the U.S. generics business and adverse product mix are expected to remain key headwinds to its overall profitability.

We maintain our HOLD recommendation on the stock.

About the stock: Dr Reddy's (DRL) business encompasses generic formulations sales across US, Europe, RoW markets and branded generics in India and Russia CIS. The business also comprises of API sales under the head PSAI. The company...

Dr. Reddy’s Laboratories’ (DRL) Q2FY26 revenue was slightly ahead of our expectations, though EBITDA and profit were in line. Revenue growth of 9.8% YoY was boosted by consolidation (65-70%) of the acquired NRT portfolio (~8% of sales) and acquisition of other branded products.

The 2QFY26 margin performance of Dr Reddy’s was marginally weaker than our expectations (in line with street estimates; adjusted for one-offs), with the gross margin (GM) decline being sharper than our expectations (at 55%, GM logged at its lowest since the launch of gRevlimid) and largely a consequence of lower-than-expected gRevlimid sales.

Dr Reddy’s Labs (DRRD) delivered slightly better-than-expected revenue/EBITDA (3%/5% beat) in 2QFY26. Higher other income and a lower tax rate led to a 14% beat in PAT.

Dr. Reddy’s Laboratories Ltd. has entered into a definitive agreement with Janssen Pharmaceutica NV, an affiliate of Johnson & Johnson, to acquire the STUGERON® brand along with its leading local brands STUGERON® FORTE and STUGERON® PLUS.

Revenue: For Q1FY26, the revenue increased by 11.4% YoY (+0.5% QoQ) to INR 85,721 Mn, below our estimates by 3.0%, led by weakness in North America, which was partially offset by higher momentum across Europe and the Emerging markets.

Dr. Reddy's (DRRD) Q1FY26 EBITDA adjusted for licensing income was in line with our estimate. The base business margins and US sales ex of gRevlimid continued to remain weak. We have scale up base business margins from the current level of 15-16% to +21-22% in FY27E. Our FY26 and FY27E EPS broadly remain unchanged. DRRD have been investing cash flow from gRevlimid to build pipeline across peptides, biosimilars and GLP products; benefits of that may take some time. Further thin US pipeline in near term and competition in...

We maintain our HOLD recommendation on with a target price of Rs 1,360/share, implying an upside potential of 9% from the CMP.

Dr Reddy’s Labs (DRRD) reported sales in line with our estimates in 1QFY26, while EBITDA/PAT came in higher than expected, primarily led by higher outlicensing income and lower R&D expenses.

*over or under performance to benchmark index Dr. Reddy's Laboratories (Dr. Reddy's) is an Indian pharmaceuticals company that manufactures and markets more than 190 medications, 180+ active pharmaceutical...

Dr. Reddy's (DRRD) Q4FY25 EBITDA was below our estimate. The base business margins and US sales ex of gRevlimid continued to remain weak. We have scale up base business margins from current level of 16% to +20% in FY27E. Our FY27E EPS stands cut by 4-5%. DRRD have been investing cash flow from gRevlimid to build pipeline across peptides, biosimilars and GLP products; benefits of that may take some time. Further thin US pipeline in near term and...

North America sales missed our estimates and reported US$ 395mn in 3QFY25 vs US$ 445mn in 2QFY25 impacted by gRevlimid

We maintain our BUY recommendation on the stock.

Adjusted for the milestone payment received from Journey Medical Corp, 3QFY25 EBITDA for Dr Reddy’s was below street/our estimates. The PAT miss was higher on account of lower other income.

DRRD delivered in-line sales (adj. for NRT acquisition and milestone income) and marginally better operational performance in 3QFy25. Revenue/EBITDA YoY growth was moderate due to lower off-take of g-Revlimid and PSAI business, which was offset to some extent by healthy performance in the Russia market

Revenue/EBITDA earnings above our and street estimates. APAT ~46% above estimates. Estimates adjusted for JV and impairment cost

Dr. Reddy’s Laboratories’ (DRL) Q2FY25 performance, adjusted for acquisition-related expenses (INR 561mn) and impairment charge of gNuvaring (INR 924mn), was ahead of our expectations