Dr Reddy’s share price: Pharma major Dr Reddy’s Laboratories Ltd announced its Q4 results for the financial year 2025-26 on Tuesday (May 12). The company also declared a final dividend for its shareholders. The BSE 100 company reported a significant decline in its Q4 performance for FY26 compared to the same quarter in FY25.
Following its Q4 results, various brokerages such as Nuvama Research, MOSL, Emkay, Goldman Sachs and Morgan Stanley remain divided on this pharma stock. Here’s what you should know.
Dr Reddy’s share price: Morgan Stanley on Dr Reddy’s Laboratories
Morgan Stanley has maintained an “Equal-weight” rating on Dr Reddy’s Laboratories, while lowering the target price to Rs 1,215 from Rs 1,259 earlier. Here’s why:
- The company’s Q4 adjusted revenue and EBITDA miss estimates by 2% and 13%, respectively
- Semaglutide ramp-up slightly delayed, awaiting Brazil approval
- Management expects 6-7mn pen sales in CY26 and 40mn+ capacity in FY28
- US business stabilising post-GRevlimid with double-digit FY27 growth guidance
- Brokerage cuts FY27/FY28 EPS estimates by 3% and 3.5%, respectively
- Execution risks and a weak US generics backdrop keep the margin outlook subdued
- MS values DRL at 19x March 2028E P/E
Dr Reddy’s share price: Goldman Sachs on Dr Reddy’s Laboratories
Goldman Sachs has maintained a sell rating on Dr Reddy’s Laboratories, while lowering the target price to Rs 1,050 from Rs 1,075 earlier. Here’s why:
- The company’s Q4 revenue and EBITDA margin miss estimates amid lower lenalidomide sales
- One-time shelf stock adjustment impacts profitability
- Brokerage revises FY27-29 EPS estimates by -9% to +3%
- GS is concerned about the overall G.O. Zempic opportunity in Canada
- Near-to-medium-term pipeline for higher value products remains thin
- Key base business products are facing intense price erosion
Dr Reddy’s share price: Emkay on Dr Reddy’s Laboratories
Emkay has maintained a ‘reduce’ rating on Dr Reddy’s Laboratories, with a target price of Rs 1,200, implying a downside potential of around 5.5%. Here’s why:
- The company’s miss in EBITDA was primarily driven by lower gross margin
- US much weaker-than-expected
- Superlative domestic performance continues
- Semaglutide opportunity for Dr Reddy’s to be meaningful if the ex-Revlimid quarterly US base settles at $ 230- 240mn
- Expect continued margin pressures due to confirmed pricing issues in the US
- Cuts Mar-28E earnings by 5%
Dr Reddy’s share price: MOSL on Dr Reddy’s Laboratories
- Earnings miss; Revlimid erosion drags growth momentum
- Limited niche opportunities weigh on earnings growth visibility
- Lenalidomide normalisation continues to put pressure on growth and profitability
- Strong growth across India, the EU, and EM offset by a sharp dip in NA
- Cut earnings estimate by 25%/8% for FY27/FY28, factoring in:
- 1) reduced profitability post-competition in g-Revlimid
- 2) delay in semaglutide launches in certain markets like Brazil/Canada
- 3) pricing pressure in the generics portfolio
- 4) lower operating leverage
- Expect the earnings to further decline in FY27 due to a lower pace of niche launches
Dr Reddy’s share price: Nuvama on Dr Reddy’s Laboratories
The brokerage firm Nuvama Research has maintained a ‘buy’ rating on Dr Reddy’s Laboratories, with a revised target price of Rs 1,550, down from Rs 1,600 earlier. Here’s why:
- Weak quarter with the end of gRevlimid
- Margins were under pressure due to one-off items, including impairment charges
- Adjusted US to grow in double-digit
- Margin to inch up to 25%
- Nicotine Replacement Therapy business grew 16% YoY, much ahead of expectations
Revenue fell to Rs 7,516 crore in Q4 FY26 from Rs 8,506 crore in Q4 FY25, registering a YoY decline of 11.6 per cent.
Profit dropped sharply to Rs 220.5 crore from Rs 1,587 crore, a steep YoY decline of 86.1 per cent.
EBITDA decreased to Rs 980 crore from Rs 2,475 crore, down 60.4% year-on-year.
EBITDA Margin contracted sharply from 29.1 per cent to 13 per cent, a decline of 1,605.9 basis points.
Despite the weak quarterly performance, the company has recommended a final dividend of Rs 8 per share.
“Recommended a final dividend of INR 8/- per equity share of face value of Rs. 1/- each for the financial year 2025-26, subject to approval of shareholders at the ensuing Annual General Meeting,” the company said in its May 12 exchange filing.
The 42nd AGM of the company will be held on July 23, 2026.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
