The Hyderabad-based pharma major was the biggest loser on the bourses with trading volume rising nearly 10 times after a majority of the analysts slashed their price targets. The stock made an intraday low of ₹4,524.05 apiece in Thursday’s trading before closing at ₹4,532, down 6.9%.
“Revlimid sales drop leads to miss on estimates,” said Jefferies in a client note. “The US sales could remain volatile but the new product launch momentum remains strong across geographies.”
The US brokerage sees a 23% upside potential from current levels and remains the most optimistic on the stock even after lowering FY24 EPS by 5% owing to lower margins.
On Thursday, Dr Reddy’s reported an 890% year-on-year growth in consolidated net profit for the fourth quarter at ₹960.1 crore, while revenue (from operations) grew 15.28% to ₹5,843 crore.
JP Morgan sees the likelihood of a 17% downside with the brokerage too cutting its price target. Brokerage Nuvama downgraded the stock with a revised target price that translates into a potential 8% decline from current levels.
Of the 23 analysts who reviewed Dr Reddy’s fourth-quarter earnings, eight have a ‘buy’ or ‘outperform’ rating and 13 had ‘hold’ or ‘reduce’.
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