CITI on DR Reddys ; Buy, TP Rs 1510

Delivered a strong beat, with adjusted EBITDA of Rs16.4bn, c40% above estimate, & margin improving c580bps QoQ to 19.1%. Ex-Europe, performance was strong across businesses, while mix improvement, operating leverage and cost efficiencies drove a sharp margin recovery. Management expects margin strength to sustain in 2H, supported by branded-market momentum and upcoming US launches, despite higher R&D spends and and normalization of exclusivity related gains in the US As per mgmt. semaglutide and abatacept timelines remain on track Raise FY27/28/29E EPS by 11%/7%/2%

DR. REDDY S LABORATORIES

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