Dr Reddy's Labs shares jump 5% after Q3 earnings; target prices, domestic growth & more

Shares of Dr Reddy’s Laboratories surged 5 per cent in Thursday’s trade after the pharmaceutical major reported financials for the third quarter ended December 31, 2025. 

Shares of Dr Reddy’s Laboratories surged 4.82 per cent to hit Rs 1,211.20 on the BSE from its previous close of Rs 1,155.50. However, the stock is down 6 per cent over a one-year period.

The drug maker reported a 14 per cent decline in its consolidated net profit at Rs 1,209.8 crore for the quarter, down from Rs 1,413.3 crore in the corresponding quarter of the previous fiscal. The bottom line was impacted by higher selling, general, and administrative (SG&A) expenses and specific product headwinds in North America, the company said.

However, consolidated revenue from operations climbed 4.4 per cent to Rs 8,726.8 crore, up from Rs 8,358.6 crore in the year-ago period.

The company reported an EBITDA of Rs 2,049 crore, translating to a margin of 23.5 per cent.

While the US market posed challenges, Dr Reddy’s domestic business was a standout performer, delivering robust double-digit growth. The investor presentation highlighted that India revenue grew robustly by 19 per cent YoY to Rs 1,603 crore. 

Brokerage firm JM Financial maintained a ‘Buy’ rating on Dr Reddy’s stock with a target price of Rs 1,545, implying a potential upside from current levels. It noted that while the North American market faced erosion, the structural growth drivers remain intact. 

The JM Financial highlighted that the worst seems to be factored into current valuations and that strong growth in ex-US markets, along with a rich filing pipeline. provides medium-term earnings visibility.

Systematix has upgraded the stock to ‘Buy’ with a revised target price of Rs 1,381. While Choice Institutional Equities has maintained an ‘Add’ rating with a target price of Rs 1,315. Axis Direct retained a ‘Hold’ recommendation with a conservative target price of Rs 1,250. 

The European market also performed well, recording a 20 per cent YoY jump in revenue to Rs 1,448 crore, aided by new product launches and the momentum in its Nicotine Replacement Therapy (NRT) business. Similarly, emerging markets grew by a staggering 32 per cent YoY, with revenue from Russia alone surging 51 per cent, the company said.

Dr Reddy’s confirmed receiving marketing authorisation for the Semaglutide injection in India, with a launch expected in March. In the US, the company has filed a Biologics License Application (BLA) for the abatacept biosimilar, targeting approval by late 2026.

Additionally, the company announced a strategic collaboration with Immutep to commercialise the novel immunotherapy drug Eftilagimod Alfa in key emerging markets.