Dr Reddy’s shares surge 5% despite 14% fall in profit? Why brokerages are bullish

Dr Reddy’s share price: Shares of Dr Reddy’s Laboratories jumped 5 per cent in Thursday’s trade after the Hyderabad-based pharmaceutical major reported its third-quarter financials for the period ended December 31, 2025.

At around 10:55 AM, the stock was trading at Rs 1,217.20, up Rs 60.00 or 5.18 per cent. The share opened at Rs 1,195, touched a high of Rs 1,224.50 and a low of Rs 1,187.70. The company’s market capitalization stands at Rs 1.01 lakh crore, with a 52-week high of Rs 1,379.70 and a 52-week low of Rs 1,020.00.

Profit declines, revenue rises

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Dr Reddy’s reported a 14 per cent decline in consolidated net profit to Rs 1,209.8 crore for Q3 FY26, down from Rs 1,413.3 crore in the same quarter last year. The company cited higher selling, general and administrative (SG&A) expenses and product-specific challenges in North America as key reasons for the fall.

On the revenue front, consolidated sales rose 4.4 per cent to Rs 8,726.8 crore from Rs 8,358.6 crore a year ago. EBITDA for the quarter stood at Rs 2,049 crore, with a margin of 23.5 per cent, signaling stable operational efficiency despite cost pressures.

Domestic business drives growth

While the US market remained challenging, Dr Reddy’s domestic operations showed strong momentum. Revenue from India grew 19 per cent year-on-year to Rs 1,603 crore. The company highlighted robust demand across chronic and specialty therapies in India, which helped cushion weakness in international markets.

Dr Reddy’s share price target 2026

Brokerage sentiment remained mixed post-results:

CLSA upgraded the stock to Hold from Reduce, raising the target to Rs 1,210 from Rs 1,120.

Jefferies retained an Underperform rating, cutting the target to Rs 1,040 from Rs 1,100.

Goldman Sachs maintained Neutral, raising the target to Rs 1,225 from Rs 1,205.

Morgan Stanley kept Equalweight, lowering the target to Rs 1,285 from Rs 1,389.

Nomura retained Buy, raising the target to Rs 1,600 from Rs 1,580.