Dr Reddy’s Laboratories share price gains 3% post Q1 results: Should you buy or sell the pharma stock? | Stock Market News

Stock Market Today: Dr Reddy’s Laboratories share price hogged the limelight in trade on Thursday post Q1 results that were declared after the market hours a day ago.

Dr Reddy’s Laboratories’ share price gained almost 3% following the earnings announcement, wherein the pharma major posted a marginal increase in profit and a low double-digit rise in topline.

Dr Reddy’s Laboratories Q1 Results

Dr. Reddy’s Laboratories reported a 1.4% increase in consolidated net profit to ₹1,409 crore for Q1FY26, up from ₹1,392 crore in the same period the previous year. Revenue from operations increased by 11.3% to ₹8,545 crore from ₹7,672 crore. The beat, however, was on the operating performance, which analysts said was boosted by out-licensing income and lower R&D spend.

The earnings before interest, tax, depreciation, and amortisation, or EBITDA, stood at ₹2278.4 crore, up 5.5% compared to ₹2,160 crore in the year-ago quarter. However, on a sequential basis, the same came lower than ₹2475 crore in the previous quarter.

The North America sales stood at ₹3412.3 crore, down 11% year-on-year and 4% sequentially, though growth in Europe, India, and emerging markets supported overall revenues.

The much-expected decline in multiple myeloma treatment drug Revlimid generic sales in the US is showing the impact.

Dr Reddy’s Laboratories Q1 results—analysts’ views

Declining sales of blockbuster product Revlimid amid rising competition in the US are leading to caution among analysts, even though they are watchful of new product launches. Also, strong India and emerging markets growth remains a positive.

Jefferies India Pvt Ltd said that the impact of the generic Revlimid decline started to show up on Dr. Reddy’s Q1 results, which missed their estimates due to lower US sales impacted by the sequential decline in generic Revlimid sales and base business.

While other markets delivered in line with expectations, SG&A costs and R&D spending remained elevated, said Jefferies. It is the generic of the diabetes control drug Ozempic.

Approval in Canada in October 2025 and the US filing for Abatacept used to treat autoimmune diseases, by the end of the calendar year 2025, which, as per Jefferies, are the two important events to monitor. “We build timely launches and meaningful sales from both Ozempic & Abatacept but are cautious on execution risks in the future,” Jefferies said, assigning a target price of ₹1,100.

Analysts at Choice Broking also believe that Dr Reddy’s is currently in an investment phase, actively strengthening its product pipeline with key launches like GLP-1 and biosimilar products. These long-term growth initiatives, which are essential to offset the impact of Revlimid losses, along with continued pricing pressure in the US generics market, have led to higher SG&A expenses, as per analysts. Hence, their target price of ₹1274 indicates no major upside for the stock that was already trading at the ₹1284 level on Thursday.

Motilal Oswal Financial Services expects that the semaglutide opportunity for the Canadian market and other markets like India and Brazil would be able to offset the impact of a reduction in generic-Revlimid business from 3QFY26 onward. However, considering the strong contribution from generic-Revlimid in FY25, they also expect a 3% compounded decline in earnings over FY25-27. Hence, they maintain a neutral rating on the stock.

Disclaimer: The views and recommendations made above are those of individual analysts or brokerage companies and not of Mint. We advise investors to check with certified experts before making any investment decisions.