Dr Reddy's share price spurts 4% post Q2 earnings; analysts upgrade rating

Analysts at Systematix Institutional Research and Elara Securities upgraded rating on Dr Reddy's Laboratories stock from 'Hold' to 'Buy' and 'Reduce' to 'Accumulate', respectively.

 

Dr Reddy's Laboratories share price today

Share price of Dr Reddy's Laboratories spurted 3.8 per cent to an intraday high of ₹1,275.80 on the NSE in Monday's trading session even as the pharma major reported a 36 per cent year-on-year decline in Q2 net profit. The stock hit a 52-week low of ₹1,101 on July 23, 2026, and a 52-week high of ₹1,414.90 on June 29, 2026. The stock is trading higher for the second straight month. At 10 AM, Dr Reddy's quoted 3.2 per cent higher at ₹1,269 on a trading volume of 33.46 lakh shares on the NSE. Meanwhile, the Nifty 50 index was up 0.1 per cent at 22,628. CHECK Stock Market LIVE Updates 

Dr Reddy's Laboratories Q2 earnings

 Dr Reddy's Laboratories on Friday after market hours reported a 36 per cent YoY dip in consolidated net profit at ₹925 crore for Q2FY27. The company's revenue dipped .5 per cent YoY to ₹8,670.8 crore primarily due to lower lenalidomide sales in North America, according to the pharma major. However, on a sequential basis consolidated net profit grew 109 per cent quarter-on-quarter (QoQ), and revenue recorded a 7.4 per cent QoQ growth. Earnings before interest, taxes, depreciation and amortisation (Ebitda) margin was 20.6 per cent, while capital expenditure stood at ₹186 crore. The company's gross margin stood at 52.1 per cent during the quarter, within its guided range of 50-55 per cent. In North America, revenue fell 23 per cent YoY to ₹2,489 crore on lower lenalidomide sales, even as the base business grew 12.4 per cent. READ MORE

 Brokerages upgrade Dr Reddy's stock post Q2 results

 Analysts at Elara Securities reckon that Dr Reddy's Q2FY27 revenue came in 4 per cent below its estimate, but the EBITDA margin expanded more than anticipated. The company's US revenue was in line with its estimate. The brokerage models an EBITDA margin in the range of 17.0-18.5 per cent for the rest of FY27E and FY28E. They expect the domestic business to grow at a similar pace for the rest of the year and then taper off into the low double digits. Elara Securities raised its FY27-29 core earnings estimates by 1-6 per cent. The brokerage lifted its target price on the stock to ₹1,338 from ₹1,222 based on 23x (from 28x FY28E) FY29E core earnings plus cash per share. It upgraded the rating on the stock to 'Accumulate' from 'Reduce'. Similarly, analysts at Systematix Institutional Research see a favourable risk reward for the stock at current levels, hence upgraded Dr Reddy's from 'Hold' to 'Buy' "Potential successful approval of biosimilar Abatacept on its TAD (December 22, 2026) and launch of Qdenga vaccine (Dengue vaccine – in licensed from Takeda) can bring about meaningful acceleration in earnings. We factor in initial QDENGA sales in FY28E and raise our valuation multiple to 24x from 22x FY28E EPS (60.9), upgrading DRRD to BUY from HOLD, with a revised target price of ₹1,461," said the brokerage in a note. Meanwhile, analysts at Choice Institutional Equities retained an 'Add' rating on Dr Reddy's for a target price of ₹1,380. Analysts flag that while the management reiterated its confidence of sustaining EBITDA margin above 20 per cent, they believe a meaningful margin expansion will hinge on the successful execution of these growth drivers and project an EBITDA Margin of 18 per cent for FY27E and 21.5 per cent for FY28E. Disclaimer: Views and outlook in this report belong to the brokerages and analysts cited. They do not reflect the views of Business Standard. Readers are advised to exercise discretion.