.png)
1 hour ago
6
Shares of Dr Reddy’s Laboratories hit a 52-week low of ₹1,101, down 7 per cent on Thursday as it reported a 69 per cent y-o-y decline in net profit to ₹443 crore for the quarter ended June 30, 2026.
The stock reaction followed a weak quarter marked by pressure on margins, gSema-related issues and higher solvent, freight and SG&A costs.
CLSA said Dr Reddy’s reported in-line revenue, but margins were below its estimate due to gSema issues and higher solvent and freight costs, with the latter driven by West Asia conflict. The brokerage expects gSema issues to stabilise in November 2026. It retained a hold rating with a target price of ₹1,240.
JP Morgan retained its underweight call with a target price of ₹1,100. The brokerage attributed the margin pressure to higher SG&A and freight costs and said weak core profitability persists despite the branded business contributing 52 per cent of revenues.
Jefferies retained its underperform call with a target price of ₹1,040, saying the first quarter missed estimates materially even after adjusting for a one-off provision. It said margins declined due to weak US performance, higher raw material costs and increased SG&A spending, although India, Russia and Europe recorded robust y-o-y growth. The brokerage expects better margins in the second half of FY27 and cut its FY27-29 estimates by 1-15 per cent due to delays in the Semaglutide launch in Canada.
Citi retained its sell call with a target price of ₹1,040, and BofA retained its accumulate recommendation with a target price of ₹1,480, compared with an earlier target of ₹1,500.
Morgan Stanley retained its equal-weight recommendation with a target price of ₹1,200, versus ₹1,215 earlier. It said timely resumption of Semaglutide supplies and Abatacept ramp-up are key to meeting FY28 estimates.
Domestic brokerages lower earnings estimates and target prices
Motilal Oswal maintained its neutral stance and set a target price of ₹1,125, reducing its earnings estimates by 2 per cent and 3 per cent after factoring in increased operating expenses due to West Asia conflict and moderate growth in the PSAI segment. It expects earnings to decline in FY27 and revive from FY28 onward, citing work-in-progress on resolving the Semaglutide-related regulatory issue, commercial benefits from b-Abatacept expected from Q4FY27 onward and a high FY26 base.
Elara Capital retained its reduce call and lowered its target price to ₹1,222 from ₹1,283. The brokerage cut its FY27E-29E core earnings estimates by 7-29 per cent. It said positive news around gAbatacept and a quick resolution of the Semaglutide API issues are key upside risks.
Published on July 23, 2026
English (US) ·