Morgan Stanley has maintained its Equal-Weight rating on Dr. Reddy’s Laboratories, assigning a target price of ₹1,298 per share. The target indicates a modest upside from the current market price of ₹1,248.00.
The brokerage noted that Q1FY26 revenue grew 11% year-on-year, indicating healthy top-line momentum. However, gross margins declined, impacted by higher generic price erosion and lower operating leverage in the quarter.
While EBITDA was in line with estimates, net profit rose by just 2% YoY, reflecting limited bottom-line expansion despite revenue growth.
Morgan Stanley remains neutral on the stock, citing a balanced risk-reward outlook amid cost pressures and a competitive generic market environment.
Disclaimer: The brokerage views expressed above are those of Morgan Stanley. This article does not constitute investment advice. Readers are advised to consult their financial advisor before making any investment decisions.
