Dr. Reddy’s shares underperform in 2026: Insights on Q4 results and recent updates

Hyderabad-based multinational pharmaceutical stock Dr. Reddy’s Laboratories was back in focus of the stock market investors on April 15, after the Russian tax authority, Interdistrict Inspectorate of the Federal Tax Service of Russia, imposed a 9.27 million rubles (₹1.14 crore) penalty on the company.

The NSE filings from Tuesday, April 14, showed that the tax (VAT) charges imposed were upon re-classification of the firm’s marketing services as a taxable service subject to payment.

Although Dr. Reddy's shares have underperformed in 2026, the market experts predict that the pharma major is expected to recover in the financial year 2027-28. Looking at the near term, the company’s diabetes and weight loss drug rejection in Brazil and muted earnings expectations are set to weigh down Q4 results.

The pharma major is set to announce its fourth quarter results on Tuesday, May 12, 2026.

The recent business updates showed that last month, Dr. Reddy’s launched its first Drug Controller General of India (DCGI) approved Semaglutide injection ‘Obeda’ for Type 2 diabetes treatment in the domestic market, as the company aims to cater to over 101 million adults living with the condition in India.

Media reports suggest that on April 13, Brazil’s national health agency, ANVISA, rejected three registration requests of drugs, including one from Dr. Reddy’s containing active ingredients semaglutide and liraglutide.

Here's what Citibank predicts

Experts said that Dr. Reddy’s manufactured diabetes and weight loss drug, Embeltah, has now been denied registration by Brazil’s ANVISA as the medicine did not meet the necessary requirements under the laws.

According to Citibank analysts, the drug did not meet “all technical requirements to prove the efficacy, safety and quality of the product.”

The analysts also expect that this rejection is likely to prevent Dr. Reddy’s from participating in the initial wave of Semaglutide generic launches in Brazil, a market expected to face intense competition with 16 other applications pending before ANVISA.

“Furthermore, Apotex’s tentative approval in the US suggests it may gain a lead over Dr. Reddy’s in Canadian market,” said the analysts.

Dr. Reddy’s Q3 results

On January 21, Dr. Reddy’s announced its January to March quarter results, where the pharma major recorded a 15% fall in its net profit to ₹1,189 crore, compared to ₹1,403 crore in the same period a year ago, according to the consolidated financial statements.

The filings also showed that the company’s revenues rose 4.4% to ₹8,726 crore in the fourth quarter, compared to ₹8,358 crore in the same period a year ago.

Dr. Reddy’s earnings per share for the January to March quarter were at 14.53, compared to 16.96 at the same quarter of the previous financial year, according to the consolidated statements.

The consolidated financial data showed that although the revenues from the ‘Global Generics’ segment rose for the fourth quarter, the income from ‘pharmaceutical services and active ingredients’ and other income dropped on a year-on-year basis.

Dr. Reddy’s Q4 earnings estimates

Earlier this month, global investment giant Morgan Stanley cut the earnings estimates of Dr. Reddy’s to 10.7% for the financial year ended 2025-26, with the revenues from North America expected to drop 21% in the same period.

The analysts at Morgan Stanley also said that the generic version of Revlimid phase-out, along with the GLP-1 uncertainty impacting outlook, is expected to weigh down on the company's earnings.

“Margins expected at 21% to 22.6% over the financial year ending 2027-28, with recovery expected from FY28 led by semaglutide and biosimilars,” said the analysts in a note. They also highlighted that the earnings estimated for FY2027-28 are expected to be 5% to 6%.

Dr. Reddy’s share price snapshot

Dr. Reddy’s Laboratories shares closed 1.46% lower at ₹1,217.80 after Wednesday's market session, compared to the previous market close of ₹1,235.90 on Monday. The stock markets remained closed on Tuesday, April 14, due to a scheduled market holiday.

Shares of Dr. Reddy’s have delivered stock market investors more than 25% returns on their investment in five years and over the last three-year period, according to NSE data. The pharma company’s stock has risen 5.4% in the past year.

On a year-to-date basis, pharma stock Dr. Reddy’s has lost over 2% so far in 2026, and is down 5.7% in one month. The company’s shares were trading 2.19% higher over the last five market sessions, as of Wednesday’s afternoon trading hours.

Dr. Reddy’s shares surged to hit their 52-week high of ₹1,379.70 on June 12, 2025, while the 52-week low was at ₹1,129 on April 15, 2025, according to the exchange data. The company’s market capitalisation (M-Cap) was trading at over ₹1.01 lakh crore as of the market session on Wednesday, April 15, 2026.