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Dr Reddy's Lab Share Price: Shares of Dr Reddy's Laboratories Limited rose on Monday's trading session after the company reported its financial results for the quarter ended in September (Q2FY26). The stock of Dr Reddy's Laboratories closed at Rs 1285, +1.40 or up by 0.11 per cent on NSE. The stock has given around 7.20 per cent gain to its investors in the past six months.

Dr Reddy's Laboratories reported mixed Q2 results, showing growth in top-line and net profit but weakness in operational efficiency.

Revenue increased 9.8 per cent year-on-year (YoY) to Rs 88,051 million, while profit after tax (PAT) rose 7.3 per cent YoY.

However, earnings before interest, taxes, depreciation, and amortisation (EBITDA) declined 3.2 per cent, while the EBITDA margin declined to 22.8 per cent from 25.8 per cent in the previous year.

The company said, "Growth was broad-based across key markets, except for North America Generics, which witnessed higher price erosion in select products and lower lenalidomide sales. The acquired Consumer Healthcare portfolio in Nicotine Replacement Therapy (NRT) also contributed positively to overall performance."

Commenting on the results, Co-Chairman & MD, G V Prasad said: "Growth in Q2 was driven by momentum in branded markets and steady contributions from the Nicotine Replacement Therapy (NRT) portfolio, which helped offset the decline in U.S. Lenalidomide sales. We remain focused on strengthening our core business, advancing key pipeline assets, driving productivity and pursuing business development initiatives."

a) India sales increased by 13 per cent to Rs 15,780 crore, up from Rs 13,971 crore.

b) Europe sales saw a significant rise of 138 per cent, reaching Rs 13,762 crore compared to Rs 5,781 crore in the previous year.

The company attributed the YoY growth in Europe to being largely driven by revenues from the acquired NRT portfolio, new product launches, an increase in volumes for existing products and favourable forex movement, partly offset by ongoing price erosion.

c) North America sales declined by 13 per cent to Rs 32,408 crore, down from Rs 37,281 crore.

The company said the decline was primarily due to increased price erosion in certain key products, including Lenalidomide, partly offset by favourable forex and contributions from new product launches.

d) Global generics sales grew by 10 per cent YoY, totalling Rs 78,498 crore.

Morgan Stanley has maintained an 'equalweight' rating on Dr Reddy's Lab, and has raised its target price to Rs 1,389 from Rs 1,298. The brokerage noted that the company's EBITDA has remained resilient despite weaker performance in the US market.

According to the brokerage, Dr Reddy's Lab growth drivers are increasingly shifting toward GLP-1 drugs and biosimilars, which are expected to support future performance.

The brokerage also highlighted that the company posted strong growth outside the US, particularly in India, Europe, and Emerging Markets (EM). Additionally, Dr Reddy's demonstrated solid cash flow and maintained stable EBITDA, indicating strong operational efficiency and financial health.

Macquarie has maintained a 'neutral' rating on Dr Reddy’s Lab, with a target price of Rs 1,190. The brokerage highlighted an EBITDA miss despite the company’s in-line revenue performance.

A key factor behind the miss is Gozempic (semaglutide), for which Dr Reddy’s Lab is awaiting approval from Health Canada. However, recent commentary indicates that a complete response letter (CRL) cannot be entirely ruled out, which could delay the drug's approval and impact future growth expectations.

The brokerage also noted that the company's initial biosimilar submission (bRituximab) to the US FDA has resulted in a CRL. Nevertheless, management remains confident in filing the intravenous (IV) version of bAbatacept by December 2025, with Bachupally biologics facility serving as the manufacturing source.

Goldman Sachs has maintained a 'neutral' rating on Dr Reddy's Lab, but has lowered its target price to Rs 1,225 from Rs 1,250.

Jefferies has maintained an 'underperform' rating on Dr Reddy's Lab, but has raised its target price to Rs 1,130 from Rs 1,100.

HSBC has maintained a 'buy' rating on Dr Reddy's Lab, but has slightly lowered its target price to Rs 1,430 from Rs 1,450.

Similarly, Nomura has also maintained a 'buy' rating on the stock, but has reduced its target price marginally to Rs 1,650 from Rs 1,660.

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