Shares of Dr Reddy’s Laboratories declined 2.11% to Rs 1,303 on Friday, following cautious commentary from Goldman Sachs and Citigroup. Goldman Sachs downgraded the stock to “Sell” and cut its target price to Rs 1,075 from Rs 1,225, indicating potential downside. Concerns were raised about the anticipated opportunity linked to Ozempic, which Goldman Sachs believes may be smaller and shorter-lived than expected.
The brokerage noted limited visibility in Dr Reddy’s pipeline and a lack of significant high-value launches. Ongoing price erosion in the generics business continues to impact profitability. Citigroup maintained its “Sell” rating with a target price of Rs 1,070, reinforcing a cautious consensus.
Despite earlier gains from unverified generic semaglutide approval news, Citi argued the upside appears overstated due to competition. The brokerage estimates FY28 product revenues of around $50 million in a six-player market and revised FY27 revenue expectations to $80-100 million.
With both brokerages highlighting limited earnings visibility and stretched valuations, sentiment around Dr Reddy’s has turned cautious.
