Dr. Reddy’s Laboratories (DRRD IN) – Q4FY26 Result Update – Weak quarter; Scale up in Sema will be key – Upgrade to ‘ACCUMULATE’
Published on 13 May 2026
Dr. Reddy’s (DRRD) Q4FY26 had several one offs including shelf stock adjustment of gRevlimid. Adjusted for this base business EBITDA were at INR12bn with ~15% OPM. This should pick up with Semaglutide launch across key markets along with moderation of overheads which will be key for margin recovery. Further timely launches like bAbatacept can accelerate profitability from H2FY28. Domestic and Russia sales continue to be on strong footing. We have scale up base business margins from the current level of 15-16% to ~21% in FY28E.
We upgrade stock from Reduce to Accumulate with revised TP of 1400/share (23x FY28E EPS).
