Synopsis: The share of this pharmaceutical company gained nearly 5 percent after positive investor sentiment following the completion of a US FDA inspection at its Hyderabad facility.
The share of this India-based pharmaceutical company, a leading player offering a portfolio of products and services including APIs, CPS, generics, biosimilars, and differentiated formulations, came into focus after USFDA approval and others.
With a market capitalization of Rs 1,17,936 crore, Dr Reddy’s Laboratories Ltd’s shares on Monday made a day high of Rs 1,414.40 per share, up by 4.7 percent from its previous day’s close price of Rs 1.350 per share. The share of this company gave a return of 10 percent over the last 1 year. Factors that might be fueling investor sentiments
Shares gain despite US FDA observations
The shares of Dr. Reddy’s Laboratories gained in trade after investor sentiment improved despite the company receiving seven observations from the US Food and Drug Administration (US FDA). The market appeared to take comfort from the fact that the inspection concluded without a warning letter or import alert, while the company stated it would address the observations within the prescribed timeline.
US FDA completes Hyderabad facility inspection
The US FDA completed a Pre-License Inspection (PLI) at the company’s biologics manufacturing facility in Bachupally, Hyderabad, between June 16 and June 25, 2026. Following the inspection, the regulator issued a Form 483 with seven observations. The company said it will respond to the observations within the stipulated timeline. The latest inspection follows earlier inspections at the same facility in 2023 and 2025.
Nomura reiterates ‘Buy’ call
Brokerage firm Nomura has maintained its ‘Buy’ rating on Dr. Reddy’s Laboratories with a target price of Rs 1,740, implying an upside potential of around 27 percent from the current levels. The brokerage said the latest US FDA inspection resulted in seven Form 483 observations.
Inspection history and facility details
Nomura noted that this was the third consecutive inspection at the facility, following inspections in October 2023 and September 2025, which resulted in nine and five Form 483 observations, respectively. The Hyderabad site comprises two manufacturing blocks, including an older block from which the biosimilar rituximab was filed and a newer block developed for the biosimilar abatacept. According to the company, most of the latest observations relate to the new block.
Approval outlook remains intact
The brokerage believes this indicates that the long-standing contamination concerns at the older block may have been largely addressed. It added that the company remains confident of resolving the latest observations and continues to expect approval and commercial launch of its biosimilar products in Q4 FY27 (January to March 2028). Nomura said it is awaiting the detailed Form 483 observations for further assessment.
About the Company
Dr. Reddy’s Laboratories Ltd is a leading India-based pharmaceutical company that offers a portfolio of products and services, including Active Pharmaceutical Ingredients (APIs), Custom Pharmaceutical Services (CPS), generics, biosimilars and differentiated formulations.
Financial Highlights: The revenue from operations decreased by 12 percent to Rs 7,546 crore in Q4 FY26 from Rs 8,528 crore in Q4 FY25, and EBIDT decreased by 81 percent to Rs 382 crore in Q4 FY26 from Rs 1,998 crore in Q4 FY25. This was accompanied by a net profit decrease of 86 percent to Rs 221 crore in Q4 FY26 from Rs 1,587 crore in Q4 FY25, resulting in an EPS decrease of 86 percent to Rs 2.65 per share in Q4 FY26 from Rs 19.09 per share in Q4 FY25.
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