Suryaa Business Desk: Surya Market & Pharma Bureau, Hyderabad/Mumbai: The second quarter (Q2) financial results announced by leading pharmaceutical giant Dr. Reddy's Laboratories... Surya Market & Pharma Bureau, Hyderabad/Mumbai: After the second quarter (Q2) financial results announced by leading pharmaceutical giant Dr. Reddy's Laboratories, leading research and brokerage houses expressed a positive view on the company's performance. Despite sluggish sales of lenalidomide in the US market, brokerages cited the strong recovery seen in gross and EBITA margins on a quarter-over-quarter (QoQ) basis as a key growth catalyst for the company. Analysts are clear that improved product mix, new product innovations as well as progress in the biosimilars segment provide more upside potential for the company's stock in the future.

Q2 Results – Margins recover strongly: Compared to the previous quarter, the company's net profit more than doubled to Rs 925 crore, while the EBITA margin rebounded to 20.6 percent. The gross margin also increased by 562 basis points to reach 52.1 percent which surprised the market circles. Leaving aside the impact of lenalidomide, the company's core business has withstood international pressures, posting year-on-year growth of 17 percent in India and 24 percent in emerging markets. Ratings & Target Prices of Various Brokerages: HSBC: Reaffirmed 'Buy' rating and set a target price of Rs.1,375 on the shares of Dr. Reddy's. New drug launches and improved product mix in the US supported margins, it said.

Resumption of semaglutide commercial supplies by November 2026 and FDA approval of abatacept in December 2026 are expected to be key catalysts for the company's future market share. This suggests a potential upside of around 12 per cent from the current price.Kotak Securities: Revised its target price to Rs1,220 from Rs1,125, expressing optimism on the company's performance.Citi: Raised the target price from Rs1,100 to Rs1,150, citing uncertainty over the size of semaglutide opportunities in markets such as Canada, despite Q2 margins beating expectations. It has also raised its EPS estimates for the coming financial years to 4 percent. Investor Guidance: At the current market price, the stock is trading near key support zones, analysts suggest that the biosimilars pipeline and non-lenalidomide growth in the US market should provide attractive returns for long-term investors.