Nomura upgrades Dr Reddy's to Buy; sets target at Rs 1500 per share

In Q2, Dr Reddy's Laboratories reported a 15 percent fall in net profit at Rs 1,255 crore for the quarter ended September 30, 2024, weighed down by pricing pressure in a competitive North American market, their biggest by revenue.

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26 Aug, 2025 12:21

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Global brokerage Nomura has upgraded Dr Reddy's to a "Buy" from a "Neutral" call with a target price of Rs 1,500 per share. According to the note, the brokerage believes that the stock's relative underperformance indicates that concerns regarding the high contribution of Revlimid are already priced in. The stock opened flat at Rs 1,274.40 on December 19 at 9:15 am.

In H1 FY25, a significant portion of Dr. Reddy's growth was driven by various initiatives, including clinical trials for biosimilars, the report suggests adding that the company has also stepped up investments in manufacturing infrastructure to support future growth.

In FY2025, the pharma major's capital expenditure (CapEx) has more than doubled in FY25, reflecting the company's commitment to enhancing its operational capabilities, according to analysts at the brokerage. Additionally, Nomura notes that potential upside from GLP-1 and biosimilars is not fully factored into the FY2027 estimates, offering further growth potential.

In Q2, Dr Reddy's Laboratories reported a 15 percent fall in net profit at Rs 1,255 crore for the quarter ended September 30, 2024, weighed down by pricing pressure in a competitive North American market, their biggest by revenue. The company's revenue rose 17% to Rs 8,016 crore. Dr Reddy's largely attributed the sales growth in North America to a rise in volumes but said it was partly offset by price erosion.

The stock gained around 5 percent over the last one month. At close on December 18, the stock was trading flat at Rs 1275.