Dr. Reddy’s Stock Surges 5% After Nomura Upgrade Dr. Reddy’s stock has been experiencing a positive surge today, with its price rising by 2.48% as of December 20, 2024. The stock closed at ₹1326 per share on the previous trading day and is currently trading at ₹1358.90, indicating a clear bullish trend in the market.

• Price Movement: Dr. Reddy’s stock opened at ₹1328.95 and closed at ₹1326 in the previous session. However, it saw a fluctuation between a high of ₹1368 and a low of ₹1318.35. This wide movement indicates strong volatility, which traders may find interesting. The stock’s recent performance is reflective of a positive outlook, especially considering that it is currently trading above the first resistance level of ₹1347.02.

 

• Resistance and Support Levels: For traders, monitoring resistance and support levels is crucial. The stock is hovering near the first resistance level of ₹1347.02. If it surpasses ₹1369.03, it could potentially signal further upward momentum. On the support side, levels at ₹1349.73 and ₹1348.68 are key points to watch, as the stock has recently moved within this range. If the stock dips towards these levels, they might provide an opportunity for potential buyers to enter, while selling near resistance could be a strategy for short-term traders.

 

• Volume and Market Activity: The trading volume for Dr. Reddy’s stock has surged dramatically by 6402.72% compared to the previous day. This surge in volume, combined with the price increase, typically signals a sustainable upward trend. High volume tends to validate the price move, making it less likely to reverse quickly. Investors should be cautious and assess if the volume continues to sustain the price rise, or if there’s any sign of reversal.

 

• Moving Averages: A quick glance at the stock’s moving averages also reveals insights into its short-term and long-term performance. The 5-day moving average is ₹1249.72, and the 50-day moving average stands at ₹1269.17, suggesting that the stock is currently trading well above its recent short-term averages, reinforcing the bullish trend. The long-term trend, as indicated by the 100-day and 300-day moving averages (₹1314.72 and ₹1275.57 respectively), also reflects a steady upward movement.

 

Dr. Reddy’s Stock Surges 5% After Nomura Upgrade In summary, Dr. Reddy’s stock is showing positive momentum, supported by strong volume and favorable technical indicators. Traders should continue to monitor the resistance levels, keeping an eye on any potential reversals, while longer-term investors may feel confident in the stock’s continued growth trajectory, especially given its bullish technical outlook.

 

Dr. Reddy’s Stock Surges 5% After Nomura Upgrade Dr. Reddy’s Laboratories saw a notable price surge on December 19, 2024, with its stock rising by 4.34%, reaching an intraday high of ₹1,330.45, in an otherwise weak market. By noon, the stock had settled at ₹1,323.15, up 3.77%. This increase followed a rating upgrade from Nomura, which raised its recommendation from ‘Neutral’ to ‘Buy’, citing Dr. Reddy’s strong long-term growth prospects and strategic investments in emerging markets and high-growth therapeutic areas.

Nomura’s analysts highlighted the company’s efforts in expanding into areas like GLP-1 APIs, biosimilars, and injectables. Despite the stock’s underperformance compared to the Nifty Pharma Index over the past several years, Nomura remains confident in Dr. Reddy’s ability to overcome short-term challenges and capitalize on future opportunities. The stock’s recent struggles stem from concerns about its heavy reliance on gRevlimid, whose contribution may decline after FY26, and rising overhead costs due to increased investments in R&D and manufacturing.

Nomura raised its target price for Dr. Reddy to ₹1,500, up from its previous estimate of ₹6,499 (adjusted for the stock’s 1:5 split). The firm also revised its earnings estimates for FY25 and FY26 downwards by 13% and 14%, respectively, due to the higher overheads. Despite these adjustments, Nomura’s upgrade reflects optimism about Dr. Reddy’s long-term potential, with a fair value range of ₹1,300–₹1,800, based on an improved valuation multiple and the expected growth from its investments in biosimilars, GLP-1, and emerging markets.

Key catalysts identified by Nomura include strong performance in India, limited competition in U.S. injectable launches, and emerging market opportunities like Canada’s GLP-1 market, estimated at $1–1.5 billion.

 

Dr. Reddy’s Stock Surges 5% After Nomura Upgrade Nomura has upgraded Dr. Reddy’s Laboratories to a “Buy” rating from “Neutral” and set a target price of ₹1,500 per share. The upgrade follows the stock’s recent relative underperformance, with Nomura noting that concerns about Dr. Reddy’s heavy reliance on Revlimid are already priced in. The stock opened at ₹1,274.40 on December 19, 2024.

Nomura highlights Dr. Reddy’s strategic investments in biosimilars, clinical trials, and manufacturing infrastructure, which have contributed to growth in the first half of FY25. The company’s capital expenditure (CapEx) has more than doubled in FY25, reflecting its commitment to enhancing operational capabilities. Furthermore, Nomura points out that potential growth from GLP-1 and biosimilars is not fully accounted for in FY2027 estimates, suggesting significant upside potential.

In its Q2 FY25 earnings, Dr. Reddy’s reported a 15% decline in net profit to ₹1,255 crore, primarily due to pricing pressures in the competitive North American market, its largest revenue segment. However, revenue rose 17% to ₹8,016 crore, driven by volume growth in North America, despite some price erosion.

The stock has gained about 5% over the past month, closing at ₹1,275 on December 18, 2024.