JP Morgan has maintained its ‘Underweight’ rating on Dr. Reddy’s Laboratories, assigning a target price of ₹1,060 per share, even as the company reported a 21.4% YoY rise in net profit to ₹1,587.3 crore, beating Street expectations.
While revenue rose 20.1% YoY to ₹8,506 crore (vs ₹8,404 crore est.) and margins expanded to 29.1%, JP Morgan flagged that core EBITDA missed expectations, weighed down by slow India growth and weaker gross margins. The brokerage expressed concern over limited visibility on future high-value product launches in the US, which it sees as critical for sustained momentum.
JP Morgan acknowledged the commercial potential of semaglutide, a key pipeline molecule, but added that intensifying competition may dilute its profitability impact. While the quarterly figures are strong on the surface, the brokerage believes execution risks and margin pressure keep the stock in a neutral-to-cautious zone.
