Citi has upgraded its recommendation on Dr Reddy’s Laboratories to “buy” from the previous “sell” rating it had on the stock since May 2023. It also raised its target price to ₹1,450 per share from its previous ₹1,040. This indicates an upside of 18.8% from its previous closing price.
The brokerage has raised its earnings per share (EPS) estimates for Dr. Reddy’s for the financial year 2027, 2028 and 2029 by 2%, 5% and 19%, respectively.
It expects the Abatacept biosimilar (US) and Semaglutide Canada in its portfolio to add $350 million to $400 million to the company’s topline over FY27-FY29.
Citi said the acceptance of Abatacept indicated the most challenging development and biosimilar hurdles were behind for the company in terms of the biological license application (BLA).
The brokerage sees the company’s Model North America revenue at $900 million, excluding Abatacept and Semaglutide.
Citi is also bullish on the company’s margins as it has estimated the same to rise from 14% in FY27 to 20% in FY29. It estimates a 150 basis point margin expansion from operating leverage and cost initiatives.
The brokerage added that the potential launch of Abatacept and Semaglutide could contribute 400 to 500 basis points.
Of the 42 analysts who have coverage on the Dr Reddy’s Laboratories stock, 17 have a “buy” rating, 10 have a “hold” rating and 15 have a “sell” rating.
Shares of Dr Reddy’s Laboratories gained 2.2% to hit an intraday high of ₹1,247.7 apiece on Tuesday. The stock was up 1.7% at ₹1,242.1 and has gained 8% in the past month but is down 0.4% this year, so far.
Also Read: Azad Engineering shares extend 2026 gains to 82% after Goldman Sachs thumbs-up