Dr. Reddy’s Laboratories had a strong performance in Q2FY25, exceeding expectations when adjusting for acquisition-related expenses and an impairment charge.

Sales in the US increased by 15.6% YoY to USD 445 million, driven by gRevlimid, which contributed around USD 145 million. The company also benefited from sales of Sanofi's vaccine portfolio in India and saw a robust 33.4% growth in Rest of the World markets.

ICICI Securities upgraded its rating on Dr. Reddy’s to HOLD after an 8% stock price correction following Q1FY25 results. The target price of INR 1,270 reflects a valuation of 26 times the FY26E core EPS of INR 47, along with an NPV of INR 66 for gRevlimid. The outlook for Dr. Reddy’s remains positive, with expected growth driven by the acquisition of the NRT business from Haleon, consolidation of Sanofi’s vaccine portfolio, and new product launches in key markets.