Zacks Research Issues Optimistic Forecast for RDY Earnings

Key Points

• Zacks Research raised its Q3 2027 EPS estimate for Dr. Reddy’s Laboratories to $0.15 from $0.12 and projects Q4 2027 EPS of $0.06.
• The company’s latest quarterly results fell short of expectations, with EPS of $0.06 versus the $0.09 consensus, while revenue of $850.26 million was roughly in line with forecasts.
• Analyst sentiment remains cautious: Goldman Sachs, Weiss Ratings and Wall Street Zen recently downgraded the stock, giving RDY an average MarketBeat rating of “Reduce,” despite shares trading up 2.6%.

Dr. Reddy's Laboratories Ltd (NYSE:RDY - Free Report) - Investment analysts at Zacks Research boosted their Q3 2027 EPS estimates for shares of Dr. Reddy's Laboratories in a research note issued to investors on Monday, August 10th. Zacks Research analyst Team now expects that the company will earn $0.15 per share for the quarter, up from their previous estimate of $0.12. The consensus estimate for Dr. Reddy's Laboratories' current full-year earnings is $0.45 per share. Zacks Research also issued estimates for Dr. Reddy's Laboratories' Q4 2027 earnings at $0.06 EPS.

Dr. Reddy's Laboratories (NYSE:RDY - Get Free Report) last announced its quarterly earnings data on Thursday, July 23rd. The company reported $0.06 EPS for the quarter, missing the consensus estimate of $0.09 by ($0.03). Dr. Reddy's Laboratories had a net margin of 10.15% and a return on equity of 9.49%. The firm had revenue of $850.26 million for the quarter, compared to the consensus estimate of $850.56 million.

A number of other research analysts have also recently commented on the company. The Goldman Sachs Group cut Dr. Reddy's Laboratories from a "neutral" rating to a "sell" rating in a report on Thursday, April 23rd. Weiss Ratings lowered shares of Dr. Reddy's Laboratories from a "hold (c)" rating to a "hold (c-)" rating in a report on Thursday, July 23rd. Finally, Wall Street Zen cut shares of Dr. Reddy's Laboratories from a "hold" rating to a "sell" rating in a research report on Saturday, July 25th. Two investment analysts have rated the stock with a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat, the company presently has an average rating of "Reduce".

Dr. Reddy's Laboratories Trading Up 2.6%

Shares of RDY stock opened at $12.46 on Wednesday. The company has a debt-to-equity ratio of 0.03, a quick ratio of 1.39 and a current ratio of 1.90. The stock has a fifty day simple moving average of $13.13 and a two-hundred day simple moving average of $13.52. The firm has a market capitalization of $10.40 billion, a PE ratio of 28.33, a PEG ratio of 2.55 and a beta of 0.29. Dr. Reddy's Laboratories has a 52-week low of $11.36 and a 52-week high of $15.67.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently added to or reduced their stakes in the stock. Morgan Stanley lifted its stake in shares of Dr. Reddy's Laboratories by 41.2% in the 4th quarter. Morgan Stanley now owns 8,926,051 shares of the company's stock valued at $125,322,000 after purchasing an additional 2,603,897 shares during the last quarter. Aikya Investment Management Ltd boosted its holdings in shares of Dr. Reddy's Laboratories by 9.3% in the 4th quarter. Aikya Investment Management Ltd now owns 7,338,525 shares of the company's stock worth $103,033,000 after purchasing an additional 623,518 shares during the period. Marshall Wace LLP increased its position in shares of Dr. Reddy's Laboratories by 1,699.4% during the 4th quarter. Marshall Wace LLP now owns 516,256 shares of the company's stock valued at $7,248,000 after purchasing an additional 487,565 shares during the last quarter. Royal Bank of Canada increased its position in shares of Dr. Reddy's Laboratories by 4.6% during the 1st quarter. Royal Bank of Canada now owns 9,984,082 shares of the company's stock valued at $138,293,000 after purchasing an additional 434,805 shares during the last quarter. Finally, Bessemer Group Inc. raised its holdings in Dr. Reddy's Laboratories by 28.4% during the 1st quarter. Bessemer Group Inc. now owns 1,823,285 shares of the company's stock valued at $25,253,000 after buying an additional 403,219 shares during the period. Hedge funds and other institutional investors own 3.85% of the company's stock.

Dr. Reddy's Laboratories News Roundup

Here are the key news stories impacting Dr. Reddy's Laboratories this week:

• Positive Sentiment: Zacks continues to project positive earnings for Dr. Reddy’s, including EPS estimates of $0.43 for FY2027, $0.50 for FY2028 and $0.61 for FY2029. However, these estimates are below its previous forecasts.
• Neutral Sentiment: The analyst’s current full-year consensus reference remains $0.47 per share. The revisions focus mainly on future quarters and fiscal years rather than a new company announcement or operating update.
• Negative Sentiment: Zacks cut its FY2027 EPS forecast to $0.43 from $0.51 and its FY2028 forecast to $0.50 from $0.60. It also reduced FY2029 EPS to $0.61 from $0.66.
• Negative Sentiment: Quarterly estimates were lowered broadly: Q2 FY2027 EPS to $0.16 from $0.17; Q1 FY2028 to $0.11 from $0.17; Q2 FY2028 to $0.14 from $0.15; Q3 FY2028 to $0.13 from $0.15; Q4 FY2028 to $0.11 from $0.13; and Q1 FY2029 to $0.14 from $0.18.
• Negative Sentiment: The cuts suggest analysts see weaker earnings momentum than previously expected, which could limit valuation support for RDY. The outlook is also notable because the company’s latest reported quarterly EPS previously missed analysts’ expectations.

Dr. Reddy's Laboratories Company Profile

Dr. Reddy's Laboratories Ltd. is an India‐based multinational pharmaceutical company that develops, manufactures and markets a wide range of pharmaceutical products and services. Established in 1984 by the late Dr. Kallam Anji Reddy, the company has grown into a diversified healthcare enterprise offering generic and proprietary medicines, active pharmaceutical ingredients (APIs), biosimilars and custom research and manufacturing services (CRAMS). Its portfolio spans therapeutic areas such as oncology, cardiovascular care, dermatology, gastroenterology and pain management.

The company's core activities include the development and commercialization of cost‐effective generic treatments for branded drugs that have lost patent protection, along with in‐house research into innovative molecule development.

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