Dr Reddy reports two FDA observations: Citi targets Dr Reddy stock at INR 1,450

Published on 10/12/2026 at 09:56 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWS

Revenue fell 5.60 percent to INR 80.71 billion in April-June 2026. Citi sees INR 1,450 for Dr Reddy stock, up from INR 1,040 on September 29, 2026.

Key points in brief

Dr Reddy received two US FDA Form 483 observations after an October 5-7, 2026 inspection.
Citi raised its target to INR 1,450 from INR 1,040 and upgraded the stock to Buy on September 29, 2026.
Revenue fell 5.60 percent to INR 80.71 billion in the April-June 2026 quarter, while net profit was INR 4.43 billion.
The company is scheduled to report results for the quarter and six months ended September 30, 2026, on October 23, 2026.

Dr Reddy, INE089A01023, Illustration mit AI erstellt.

Dr Reddy's Laboratories received two US FDA observations at its FTO-11 manufacturing facility after an inspection from October 5 to October 7, 2026, while Citi had raised its target for Dr Reddy stock to INR 1,450 from INR 1,040 on September 29, 2026. BusinessToday reported the inspection details, while CNBC TV18 reported the rating change.

Three events shape the stock

On June 30, 2026, Dr Reddy's reported revenue of INR 80.71 billion for the April-June quarter, down 5.60 percent from INR 85.45 billion in the year-earlier quarter. Consolidated net profit was INR 4.43 billion, compared with INR 14.18 billion previously, with inventory and related costs linked to semaglutide supply disruptions weighing on earnings, according to BusinessToday.

On September 29, 2026, CNBC TV18 said Citi upgraded Dr Reddy's to Buy from Sell and lifted its target to INR 1,450 from INR 1,040. The brokerage also raised its earnings-per-share estimates for fiscal years 2027, 2028 and 2029 by 2.00 percent, 5.00 percent and 19.00 percent.

On October 5, 2026, the US FDA began the FTO-11 pre-approval inspection, which ended on October 7 with two Form 483 observations. The Economic Times reported that the company said it would address the observations within the stipulated timeline.

What comes next for earnings?

Dr Reddy's is scheduled to announce results for the quarter and six months ended September 30, 2026, on October 23, 2026, after a board meeting. The earnings call is scheduled for the same date, giving investors a defined checkpoint after the weak April-June profit comparison and the manufacturing inspection.

Why the regulatory detail matters

The two observations are a concrete compliance issue, but the disclosed count is lower than the seven observations recorded during the facility's previous inspection in July 2025, according to Sahi. For the stock, the next measurable test is whether the company converts its planned remediation into an uninterrupted pipeline while restoring profitability after the semaglutide-related charge.

Dr Reddy's next dated checkpoint

The October 23, 2026 results will connect the regulatory update with the next reported operating period. Revenue of INR 80.71 billion and net profit of INR 4.43 billion in the April-June quarter provide the latest quantified baseline for that comparison.