Sell Dr Reddys Laboratories; target of Rs 1120: Deven Choksey

Deven Choksey's research report on Dr Reddys Laboratories

For Q1FY26, the revenue increased by 11.4% YoY (+0.5% QoQ) to INR 85,721 Mn, below our estimates by 3.0%, led by weakness in North America, which was partially offset by higher momentum across Europe and the Emerging markets. Double-digit revenue growth was driven by growth across all geographies, except North America.

Outlook

We downgrade our rating from “ACCUMULATE” to “SELL” on the stock, driven by the decline in EBITDA margin led by consistent price erosions and weaker gross margins.

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