Shares of Dr Reddy’s Laboratories fell on Friday, April 24, after global brokerage Goldman Sachs downgraded the stock to ‘Sell’ from ‘Neutral’ and cut its target price to Rs 1,075, citing concerns over growth visibility and limited upside from key pipeline opportunities.
The stock was trading at Rs 1,307.70, down 1.75% in intraday trade, compared to its previous close of Rs 1,331.00.
Goldman Sachs noted that while there is a possibility of timely approval for generic Semaglutide in Canada, the opportunity may be short-lived. The brokerage highlighted that competition in the segment is expected to intensify faster than earlier anticipated, reducing the potential gains for early entrants.
The brokerage also flagged that Dr Reddy’s pipeline for high-value drugs remains limited, with Semaglutide seen as a short-term opportunity and the Abatacept biosimilar expected to contribute meaningfully only from FY29 and beyond.
Additionally, ongoing price erosion in key base products continues to remain a concern for the company’s core business performance. Reflecting these factors, Goldman Sachs has cut its FY26–FY28 earnings per share estimates by 8–26%, factoring in slower topline growth.
Meanwhile, the company clarified that it has not yet received the final approval (‘Notice of Compliance’) from Health Canada for its Semaglutide Injection. However, as part of the regulatory review process, it has received the Drug Identification Numbers (DINs) for the product on April 22, 2026. The company stated that it continues to engage with the regulator and remains committed to launching the product in the Canadian market upon approval.
Despite these developments, the downgrade and cautious outlook from the brokerage appear to have weighed on investor sentiment in today’s session.
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