Dr Reddy’s Labs stock emerges as top NIFTY50 gainer, shares climb for third consecutive session

After gaining as much as 4% in a weak market day on December 19 following the US Fed chair’s comments on rate cuts in 2025, Dr Reddy’s Labs’ stock is once again in focus with emerging as the top gainer on the NIFTY50 on December 20. The stock surged by more than 3% on Friday, rising for the third consecutive session and marking a 9% growth.

The stock is trading 1.49% up at ₹1,345.30 apiece on the NSE at 3:40 pm on Friday, December 20.

Recent favourable ratings from the experts pushed Dr Reddy’s Labs stock, and the pharma sector overall showed an outperforming trend in the plunging market. Media reports noted that analysts attributed this to a strategic move at a time of uncertainty.

About Dr Reddy’s Labs

Founded in 1984, Dr Reddy's Laboratories is a Hyderabad-based pharmaceutical company. It produces over 190 medications and several active pharmaceutical ingredients (APIs) for drug manufacture, diagnostic kits, critical care and biotechnology. It sells a wide range of products including generic drugs, over-the-counter drugs, vaccines, diagnostics, biologics and dietary supplements. The company operates in domestic and international markets including the USA, India, Russia, China and Europe.

In the second quarter of the current fiscal year, the company posted a 9.5% drop in its consolidated net profit to ₹1,342 crore as compared to the ₹1,482 crore figure in the same period last year. For the July-September quarter of FY25, the company reported a 16.5% increase in its total revenue from operations to ₹8,016 crore, growing from ₹6,880.2 crore reported in the year-ago period.

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) during the reporting quarter grew by 3.5% to ₹2,054.5 crore, compared to ₹1,985.8 crore in the previous year. However, the EBITDA margin lowered to 25.6% from 29% in the July-September quarter of FY24.

US Fed meeting announcement

The US Federal Reserve said in its most recent policy announcement that it is only eyeing two rate cuts in 2025, disappointing investors, as estimates were suggesting four rate cuts for the upcoming year.

The two-day US Federal Reserve policy meeting ended on Wednesday, December 18, followed by US Fed Chair Jerome Powell’s press conference at 12:30 AM IST on Thursday. While the Fed announced a 25 bps cut in its benchmark interest rate to 4.25% - 4.5%, as per market expectations, the Fed chair's comments on the number of rate cuts in 2025 caused a commotion in the market.

After Powell addressed the press, the NASDAQ 100 slumped by 3.6% and the S&P 500 fell below the 6,000 level after the announcement. This is the worst fall for the S&P 500 index on a US Fed policy decision day since 2001. The Dow Jones Industrial Average also dropped by over 1,100 points during intraday trade on Wednesday, extending losses to the 10th consecutive session, its longest losing streak since 1974. The Indian rupee dropped 12 paise to an all-time low of 85.06 against the US dollar and the domestic markets were trading 1% lower after the announcement.

With the falling markets, Nifty Pharma was the only gaining sector. The index was trading up by 1.5% Thursday.