Stock market today: S&P 500 closes at fresh record ahead of Nvidia earnings
Investing.com -- HSBC upgraded Dr Reddy’s Laboratories to Buy from Hold and raised its target price to INR 1445, citing expectations that sales of semaglutide, a generic version of Novo Nordisk’s blockbuster weight-loss and diabetes drug, will help drive a recovery in earnings growth from fiscal 2027.
HSBC’s new target for the U.S.-listed ADR is $16.90, up from $14.44.
The brokerage forecasts Dr Reddy’s semaglutide revenues at $280 million in 2027, contributing about 18% of the company’s earnings per share, with the bulk of those sales expected to come from the Canadian market.
In a bullish case, HSBC sees potential sales reaching $500 million.
Dr Reddy is preparing for a post-gRevlimid era. The company is expected to lose a major chunk of its earnings from generic Revlimid after January 2026, with investors concerns about what will fuel growth after that.
HSBC said semaglutide, along with other efforts in consumer health and biologics, offers a promising path forward.
While a court order in India has restricted semaglutide exports until the original brand’s local patent expires in March 2026, HSBC believes Dr Reddy’s will be among the first to launch in markets such as Canada, Brazil, and India shortly thereafter.
The note highlighted tight supply and strong demand for semaglutide in these markets, which could limit price erosion, a typical challenge for generic drugs.
HSBC now assumes an early FY27 launch across key geographies instead of only Canada in late FY26.
The firm cut FY26 EPS estimates by 5.1% due to declining Revlimid sales but raised FY27 and FY28 forecasts by 12–13% on semaglutide-led growth.