100-Word Take | Dr Reddy's: Slipping on familiar ground

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26 Aug, 2025 12:21

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Ravi Ananthanarayanan

On February 15, Dr Reddy's Laboratories' shares fell by as much as 23%. The cause was apparently a Jefferies report on a US Food and Drug Administration plant inspection that found 11 observations, of which four were repeat offences. Remediation would take time and could require a re-inspection, said the Jefferies report. Approvals could also get delayed.

Later, investors took a less alarmist view and calmed down, with the shares closing down by 4.2 percent. While this episode will play out, the bigger concern is Dr Reddy's inability to keep its manufacturing plants compliant at all times. For investors, that’s not a comforting thought.