Dr. Reddy's Laboratories has received a SELL recommendation from Emkay Global Financial, with a target price of Rs 1,070.

The company's adjusted PAT for Q2 FY25 met expectations, with EBITDA slightly exceeding forecasts due to strong sales in Russia and other emerging markets, alongside reduced selling, general, and administrative expenses.

However, there are concerns about the overall mix deterioration and a decline in gross margin within the global generics segment. Analysts predict that EBITDA margins will return to pre-gRevlimid levels of 20-21% by FY27, assuming gross margins stabilize at 52-53%. Despite unchanged earnings estimates, the firm remains cautious about the challenges in the generics sector and maintains its SELL stance on the stock.