Explained | Here’s why Dr Reddy’s Laboratories shares have recovered 3% from their day’s lows

Shares of Dr Reddy’s Laboratories Ltd. were trading over 3% off their day’s low around 11 am on Wednesday, February 25, after the company said the US Securities and Exchange Commission (SEC) said it has concluded its probe into alleged improper payments and it does not intend to recommend enforcement action at this time.Dr Reddy’s said the regulator has stated that it has now concluded its investigation into the anonymous allegations of improper payments to healthcare professionals in Ukraine and potentially other markets, possibly violating the US Foreign Corrupt Practices Act. The investigation was initiated in November, 2020.

The US SEC clarified that the communication does not constitute exoneration and does not preclude any future action.
Meanwhile, brokerage firm Citi has a ‘sell’ rating on Dr Reddy’s with a target price of ₹1,070 per share.

It said Novo Nordisk’s announcement of significant 35% and 50% reduction in Ozempic and Wegovy prices, respectively, in the US (starting from January 2027) is a negative read-through for the generic semaglutide uptake.It said the move clearly shows Novo Nordisk’s aggression when it comes to protecting and expanding volumes and the company may opt for similar price cuts in market such as Canada and Brazil, which can limit the uptake of pick up in generics.

Novo Nordisk is already pursuing a dual-brand strategy in these markets to retain its share for semaglutide, anticipating generic competition this year, Citi said.

The analyst is cautious on generic semaglutide potential or Dr Reddy’s and estimates for the product of $50 million for FY27/28 in Canada are significantly lower than Street expectations.

Dr Reddy’s shares were trading 0.6% up at ₹1,307.7 apiece around 11.20 am on Wednesday. The stock has gained 15.9% in the past year.

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