Citi has maintained its ‘Sell’ rating on Dr. Reddy’s Laboratories, with a target price of ₹1,110, even after the company posted a strong Q4 beat on net profit and revenue. The brokerage remains focused on underlying margin pressure and operational concerns.
Despite revenue climbing 20.1% YoY and profit jumping to ₹1,587 crore, Citi flagged that gross margins continued to decline, and noted that FY26 guidance appears ambitious given ongoing pricing pressures and slow India growth.
Citi expects the next quarter to benefit from peak generic Revlimid (gRevlimid) volumes, but said this will not be sustainable in the long term. While long-term opportunities in GLP-1 drugs and biosimilars remain attractive, Citi believes the near-term setup is less favourable and warrants caution.
