Dr Reddy’s shares see muted trend in 2026; key triggers and risks explained

Shares of Dr. Reddy’s Laboratories have remained under pressure this year. The stock has largely moved sideways and delivered negative returns so far in 2026. It was trading at Rs 1,222, up Rs 4.20 or 0.34 per cent in the latest session.

The broader trend remains weak. The stock is down about 4.30 per cent over the past one month. It has slipped 1.47 per cent in the last six months. Year-to-date, it is down around 2.51 per cent. This muted performance comes even as the company builds new growth drivers.

Positive triggers: new therapies, global expansion, stable core

One of the key positives is the company’s early entry into the generic GLP-1 segment. This is a fast-growing global market. The company has already received approvals for both injectable pens and oral tablets. This gives it an early advantage.

The opportunity pipeline is large. The company is planning to launch generic Semaglutide across nearly 86 countries. This can drive long-term revenue growth.

Core operations remain stable. The US market continues to contribute steady revenues. The India business is also holding up. The company is also expanding in biosimilars, which can support future growth.

Margins are expected to stay stable. Cost control measures are in place. Even if revenue growth is gradual, profitability may remain intact.

Negative triggers: pricing, delays, and competition

Pricing remains a concern. In India, the expected price of around Rs 1,100 for GLP-1 products is considered high. This could make it harder for a lot of people to buy them in a market where price is important. Fresh launches are not yet filling the gap fully. This may weigh on near-term growth.

Brokerages divided; wide target band

Street views remain split.

On the upside, some estimates suggest the stock can move towards Rs 1,600 if new launches scale up and margins remain strong.

On the downside, some estimates see the stock falling towards Rs 1,040 due to delays and competitive pressure.

This wide range reflects uncertainty around earnings visibility.

Expert view: technical recovery likely

Vikas Sethi, MD of Sethi Finmart Pvt. Ltd, told Zee Business that the stock is showing signs of stabilisation after a correction.

He said the stock has formed a base near Rs 1,180. It may move towards its 200-day moving average near Rs 1,260. A sustained move above this level can push the stock towards Rs 1,320 in the near term.

Q3 earnings

Pharma major Dr. Reddy’s Laboratories reported a mixed set of numbers for the third quarter of FY26.

Revenue stood at Rs 8,727 crore, up 4.4 per cent on a year-on-year basis. Growth remained steady, supported by key markets and new launches.

However, profitability came under pressure. EBITDA came in at Rs 2,049 crore, down 11 per cent year-on-year. Net profit declined 14 per cent to Rs 1,210 crore.

Gross margins narrowed to 53.6 per cent from 58.7 per cent in the year-ago period. This reflects cost pressures and product mix changes.

R&D spending remained elevated. The company spent Rs 614 crore on research, which is about 7 per cent of total revenue. It has guided that R&D intensity will stay in the 7–8 per cent range in the coming quarters.

The India business stood out. It reported 19 per cent year-on-year growth to Rs 1,603 crore. The growth was driven by new product launches and incremental revenues from its in-licensed CNS brand ‘Stugeron’.