CLSA has maintained its Underperform rating on Dr. Reddy’s Laboratories, assigning a target price of ₹1,120 per share, implying a 10% downside from the current market price of ₹1,248.00.
The brokerage stated that the company’s Q1 earnings were broadly in line with estimates. However, it remains cautious on the outlook for the US business, which is expected to remain flat or see low single-digit growth year-on-year. CLSA also flagged that gRevlimid sales—a key contributor to recent earnings momentum—are likely to start tapering from Q3FY26.
While this decline may be partly offset by the launch of Semaglutide (a diabetes and weight-loss drug) in markets like Canada and India, CLSA believes the overall earnings trajectory may moderate in the coming quarters.
The brokerage remains concerned about the limited near-term triggers and expects the stock to underperform relative to peers in the sector.
Disclaimer: The brokerage views expressed above are those of CLSA. This article does not constitute investment advice. Readers are advised to consult their financial advisor before making any investment decisions.
