Jefferies has maintained its Underperform rating on Dr. Reddy’s Laboratories, lowering expectations with a target price of ₹1,100 per share. This implies a 12% downside from the current market price of ₹1,248.00.
The brokerage flagged that Q1FY26 earnings missed estimates, primarily due to lower US sales, which were impacted by a sequential decline in both the gRevlimid contribution and the base business. In contrast, performance in other markets was largely in line with expectations.
Jefferies also noted that SG&A expenses and R&D investments remained elevated during the quarter, weighing on profitability.
Looking ahead, the brokerage is closely watching two pipeline triggers:
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Approval of gOzempic in Canada
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U.S. filing for Abatacept
Jefferies has built in a timely launch and meaningful sales contribution from both products into its base case but remains cautious due to the near-term headwinds.
Disclaimer: The brokerage views expressed above are those of Jefferies. This article does not constitute investment advice. Readers are advised to consult their financial advisor before making any investment decisions.
