Neutral Dr Reddys Labs; target of Rs 1250: Motilal Oswal

Neutral

Motilal Oswal's research report on Dr Reddys Labs

Dr Reddy’s Labs (DRRD) delivered slightly better-than-expected revenue/EBITDA (3%/5% beat) in 2QFY26. Higher other income and a lower tax rate led to a 14% beat in PAT. Except for North America, other geographies reported healthy YoY/QoQ growth in revenue, driven by steady traction in base products and new introductions. North America sales continued to deteriorate for the second consecutive quarter due to increased competition in g-Revlimid and other select products. This affected the gross margin as well as the overall performance. DRRD is gearing up for the GLP1 opportunity through capacity build-up and implementing efforts to secure timely regulatory approvals across multiple geographies.

Outlook

We largely maintain our estimates for FY26/FY27/FY28. We value DRRD at 19x 12M forward earnings to arrive at a TP of INR1,250.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Dr Reddys Labs - 27102025 - moti