Citi Slashes Dr Reddy's Target 28%, Cites Semaglutide Hurdles

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AuthorAarav Shah|Published at:
Citi Slashes Dr Reddy's Target 28%, Cites Semaglutide Hurdles
Overview

Brokerage Citi reiterated a 'sell' rating on Dr Reddy's Laboratories, setting a price target of ₹990 and flagging a potential 28% downside. The firm cited concerns over Dr Reddy's generic semaglutide opportunity, citing Novo Nordisk's aggressive dual-brand strategy to counter upcoming generic competition. Citi estimates significantly lower sales for the drugmaker's semaglutide filing, impacting future revenue projections.

Citi has reiterated a negative stance on Dr Reddy's Laboratories, maintaining its "sell" rating and setting a price target of ₹990 per share. This represents a potential downside of 27.6% from recent closing prices, marking the lowest target on the street for the Hyderabad-based pharmaceutical firm.

Regulatory Hurdles & Competitive Pressure

Brokerage notes indicate that Danish rival Novo Nordisk is employing a dual-brand strategy to preserve market share for its semaglutide products as generic competition approaches in 2026. Novo Nordisk secured Canadian approval in December 2025 for Poviztra and Plosbrio, which are equivalents to popular drugs Wegovy and Ozempic. The company is expected to launch these lower-priced branded versions, directly challenging upcoming generic entries.

This strategic move poses a significant headwind for Dr Reddy's. The Indian drugmaker received a complete response letter for its generic semaglutide filing in November 2025. Citi expressed caution regarding Dr Reddy's prospects in the semaglutide market, estimating sales of only $50 million for financial year 2027-2028, a figure well below broader market expectations.

Citi's Outlook and Market Reaction

Citi's price target of ₹990 places it as the most bearish analyst covering Dr Reddy's. The stock saw a decline on Thursday, trading 1.1% lower at ₹1,228.9, well off its 52-week high of ₹1,405.9.

Among the 40 analysts covering Dr Reddy's Laboratories, the sentiment is divided. Fourteen analysts recommend a "buy," while an equal number suggest a "sell." Twelve analysts currently rate the stock as a "hold."

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