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Shares of Dr. Reddy’s Laboratories were trading sharply higher on Monday, with the stock up 5.41 per cent at ₹1,296 on the NSE as of 12.08 pm, after the pharma major posted a strong margin recovery in its second quarter results on Friday. The stock opened at ₹1,260, touched an intraday high of ₹1,299.50 and saw traded volumes of 58.04 lakh shares worth ₹735 crore. Buy orders outpaced sell orders 61:39, reflecting positive near-term sentiment.
The rally comes despite a mixed response from brokerages. Nomura and Citi remain the most bullish, with target prices of ₹1,730 and ₹1,510 respectively, citing the margin beat and upcoming catalysts in semaglutide and abatacept. HSBC has a buy with a ₹1,375 target. Jefferies upgraded its target sharply to ₹1,320 from ₹1,040 while maintaining a Hold, noting valuations limit further upside. JPMorgan upgraded to Neutral with a ₹1,270 target after the stock underperformed the Nifty Pharma Index by roughly 14 percentage points year-to-date. Kotak retains a Reduce with a revised target of ₹1,220, flagging full valuations and execution risks.
The common thread across analyst notes is a strong adjusted EBITDA margin recovery of around 19–19.5 per cent in Q2FY27, a meaningful sequential improvement, driven by favourable business mix, cost efficiencies and forex tailwinds. Revenue, however, came in below estimates. Management has guided for margins above 20 per cent in the second half of FY27.
Two near-term catalysts are closely watched: resumption of semaglutide commercial supplies, targeted for November 2026, and US FDA approval for abatacept IV, expected around December 2026. Analysts note abatacept alone accounts for over 10 per cent of FY28 earnings estimates, making its approval timeline a key variable.
Separately, the company on Tuesday disclosed DCGI approval for its immunotherapy Zytorvi (toripalimab) in advanced esophageal squamous cell carcinoma, its second approved indication in India.
Published on October 26, 2026
English (US) ·