Dr Reddy's shares crash 9% in 2 days; brokerages slash target prices after semaglutide supply disruption. What lies ahead?

Published 10 July 2026 · finance

The shares of Dr Reddy's Laboratories tumbled another 4% on Friday, extending their decline to more than 9% over two days after the company said

The shares of Dr Reddy's Laboratories tumbled another 4% on Friday, extending their decline to more than 9% over two days after the company said commercial supplies of its semaglutide product would be delayed due to a quality-related issue involving the active pharmaceutical ingredient (API) used in certain batches.The pharma company's shares fell to Rs 1,222 apiece, their lowest level in nearly three months, wiping out more than Rs 10,600 crore in market capitalisation over two sessions and taking its market value below Rs 1.02 lakh crore.Dr Reddy's Labs on Thursday announced that certain batches of semaglutide were found to be out of specification due to an issue associated with the active pharmaceutical ingredient (API) used in the product. It added that it is investigating the root cause and taking appropriate measures to ensure product quality.“Until the issue is resolved, commercial supplies of the product will be delayed for a certain period of time. There is no impact on patient safety or on the product's existing global regulatory filings. We remain committed to ensuring reliable global supplies of this important metabolic therapy,” the company said.Nuvama on Dr Reddy's Labs share priceNuvama maintained its ‘Buy’ rating on the shares of Dr Reddy's Labs, but reduced its target price to Rs 1,465 apiece from Rs 1,560 apiece.

The latest target price implies an upside potential of more than 15% from the stock’s previous closing price.The brokerage said that the latest development process-driven setback, although an extended halt can be a challenge to the company’s FY27 earnings. “We reckon this affects the near-term ramp-up, with supply to the CMO partner being halted until validation is complete. DRRD now expects to supply 6–7 million pens in FY27. While Abatacept approval remains on track for December 2026 and anchors our core thesis, the semaglutide API issue raises the risk to our estimates. Semaglutide’s contribution would now be missing in Q2 FY27,” it added.JM Financial on Dr Reddy's Labs share priceJM Financial maintained its ‘Buy’ rating on the shares of Dr Reddy's Labs, but cut its target price to Rs 1,561 apiece from Rs 1,596 apiece. The latest target price implies an upside potential of nearly 23% from the stock’s previous closing price.The domestic brokerage slashed its revenue, EBITDA and profit after tax estimates for FY27 by 7%, 16% and 18%, respectively. “We believe the company will be able to ramp up its operations to the previously guided levels by FY28.