Dr Reddy’s Share Price Target Set at Rs 1,240 as CLSA Retains Hold After Q1 Margin Miss on Semaglutide Issues
- July 23, 2026
- Posted by: Ankit Jaiswal
- Category: News
Dr Reddy’s CMP Rs 1,101 (23 Jul, down 6.92%). CLSA hold rating, target Rs 1,240. Q1 margin missed on semaglutide issues. 52W range Rs 1,101 to Rs 1,414.90.
The Dr Reddy’s share price target stands at Rs 1,240 from CLSA, which retained its hold rating even as the stock fell sharply after Dr Reddy’s Laboratories reported in-line revenue but a margin miss for the first quarter, driven by semaglutide supply issues and higher solvent and freight costs amid the West Asia conflict. Shares dropped nearly 7 percent to around Rs 1,101 on 23 July 2026, a level that touches the stock’s 52 week low and leaves it well below the CLSA target. The brokerage expects the semaglutide supply issues to stabilise by November 2026 and continues to guide for double digit US base business growth.
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Dr Reddy’s Laboratories Company Overview
| Parameter | Value |
|---|---|
| Dr Reddy’s Laboratories | NSE: DRREDDY |
| Sector | Pharmaceuticals |
| CMP (23 Jul 2026) | Rs 1,101 |
| 52 Week High | Rs 1,414.90 |
| 52 Week Low | Rs 1,101.00 |
| Market Cap | Rs 98,742 Cr |
| P/E Ratio | 31.02 |
| CLSA 12M Target | Rs 1,240 |
| Rating | Hold |
Dr Reddy’s Laboratories is one of India’s largest pharmaceutical companies with a significant presence in the US generics market, biosimilars and branded formulations. CLSA’s target of Rs 1,240 implies meaningful upside from the current price of around Rs 1,101, though the hold rating reflects near term caution on margins even as the brokerage sees a path to recovery later in the year.
Why CLSA Retained Its Hold Rating on Dr Reddy’s
CLSA pointed to five specific factors shaping its view on the stock following the Q1 results.
Q1 Revenue In Line but Margin Missed
Dr Reddy’s Q1 revenue came in broadly in line with estimates, but margins missed expectations due to semaglutide related supply issues along with higher solvent and freight costs stemming from the ongoing West Asia conflict.
Semaglutide Supply Issues Expected to Stabilise by November 2026
CLSA expects the semaglutide supply constraints that weighed on the quarter to stabilise by November 2026, which should support a gradual recovery in margins over the second half of the fiscal year.
Double Digit US Base Business Growth Guided
The company continues to guide for double digit growth in its US base business, with CLSA modelling roughly a 20 percent FY27 EBITDA margin once the semaglutide issues normalise.
US Tariffs on Generic Drugs Seen as Unlikely
CLSA believes US tariffs on generic pharmaceutical products are unlikely, removing one of the bigger overhangs that had weighed on Indian pharma exporters including Dr Reddy’s over the past year.
FY27 Estimates Cut, FY28-29 Forecasts Trimmed
Following the Q1 miss, CLSA cut its FY27 revenue and margin estimates for Dr Reddy’s and trimmed its FY28-29 forecasts, which is the direct driver behind the revised Rs 1,240 target.
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Short Term and 12 Month Price Outlook
Short Term Outlook 3 to 6 Months
Having touched its 52 week low of Rs 1,101 on results day, Dr Reddy’s could see continued volatility in the Rs 1,050 to Rs 1,200 range over the next three to six months as the market digests the extent of the semaglutide related disruption.
12 Month Analyst Target for 2026
The 12 month Dr Reddy’s share price target from CLSA of Rs 1,240 implies over 12 percent upside from the current price, reflecting confidence in a margin recovery once the semaglutide supply chain normalises later in the year.
Key Risks to the Target Price
Prolonged Semaglutide Supply Disruption
If semaglutide supply issues persist beyond November 2026, further downward revisions to earnings estimates and the target price cannot be ruled out.
Elevated Freight and Input Costs
A prolonged West Asia conflict could keep freight and solvent costs elevated for longer than currently anticipated, pressuring margins across the pharma export business.
US Regulatory and Pricing Pressure
Generic drug pricing pressure in the US market and FDA related compliance issues remain ongoing risks for Dr Reddy’s and peers across the broader Nifty Pharma index.
How to Track Dr Reddy’s Price and Rating Updates
Investors tracking analyst calls on Dr Reddy’s can check live price movement, rating changes and quarterly result updates on the Univest platform. Use the Univest Screener to compare Dr Reddy’s against other pharma stocks on valuation and earnings growth metrics. Setting alerts around the Rs 1,240 CLSA target and the Rs 1,101 52 week low can help investors react quickly to fresh brokerage commentary.
Download the Univest iOS App or Univest Android App to track Dr Reddy’s live price and get daily stock recommendations.
Conclusion
The Dr Reddy’s share price target of Rs 1,240 from CLSA reflects confidence in a gradual margin recovery once semaglutide supply issues stabilise, even though the stock has fallen to a fresh 52 week low following the Q1 miss. Long term investors may find the current valuation attractive relative to the target, though near term volatility is likely. As always, consult a SEBI-registered advisor before making investment decisions.
Disclaimer: Data and figures in this article are sourced from publicly available information. These may or may not be accurate. Please verify all data with the official NSE (nseindia.com) and BSE (bseindia.com) websites before making any investment decision. Investments in securities are subject to market risk. This content is for educational purposes only and is not investment advice by Univest (SEBI RA INH000013776).
FAQs on Dr Reddy’s Rating and Target Price
What target price has CLSA set for Dr Reddy’s?
Ans. CLSA has set a target price of Rs 1,240 for Dr Reddy’s Laboratories, along with a hold rating, after the company reported a Q1 margin miss tied to semaglutide supply issues.
Why did Dr Reddy’s share price fall sharply today?
Ans. Dr Reddy’s share price fell nearly 7 percent after the company reported a Q1 margin miss caused by semaglutide supply issues and higher solvent and freight costs amid the West Asia conflict.
When does CLSA expect semaglutide supply issues to stabilise?
Ans. CLSA expects the semaglutide supply issues affecting Dr Reddy’s to stabilise by November 2026, which should support a gradual margin recovery in the second half of the fiscal year.
What is the 52 week high and low for Dr Reddy’s?
Ans. Dr Reddy’s 52 week high is Rs 1,414.90 and its 52 week low is Rs 1,101, with the stock touching that low on 23 July 2026 after the Q1 results.
Are US tariffs a risk for Dr Reddy’s?
Ans. CLSA believes US tariffs on generic pharmaceutical products are unlikely, which removes one of the bigger overhangs for Dr Reddy’s and other Indian pharma exporters.
Is Dr Reddy’s a buy at the current price?
Ans. CLSA has a hold rating on Dr Reddy’s with a Rs 1,240 target, implying upside from current levels. Investors should consult a SEBI-registered advisor before making investment decisions.
Where can I track Dr Reddy’s live share price?
Ans. Investors can track Dr Reddy’s live share price, analyst ratings and quarterly results on the Univest platform, along with tools like the Univest Screener for peer comparison.
