Dr Reddy's Laboratories shares face significant headwinds after reporting an 86% year-on-year collapse in Q4 net profit to Rs 221 crore, down from Rs 1,587 crore previously. Revenue from operations also declined 12% to Rs 7,516 crore, driven by reduced Lenalidomide sales, price erosion in North America and Europe generics, and one-time impacts. Morgan Stanley maintained Equal-weight rating with a reduced target of Rs 1,215, implying 4% downside, citing execution risks and weak US generics backdrop. Goldman Sachs took a more bearish stance, maintaining its Sell rating and cutting target to Rs 1,050, signaling 17% downside potential. Both brokerages revised earnings estimates downward, reflecting concerns about margin sustainability and delayed semaglutide ramp-up pending Brazil approval.
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