Dr Reddy’s Laboratories slid
as much as 3.7% on Friday after warning of a generic semaglutide
supply disruption, raising concerns over its edge in the highly
competitive diabetes market and prompting analysts to cut
earnings views.
The drugmaker’s stock was last trading 2.2% lower at ₹1,241.90, and was the top loser on the pharma index
, which was down 0.2%. It had lost 6% on Thursday
after the announcement.
The supply disruption has cast doubt on Dr Reddy’s ability to capitalise on its early lead in India’s semaglutide market, with brokerages warning that a prolonged delay could allow competitors to gain ground, weaken pricing power and slow earnings growth.
Dr Reddy’s expects supplies to resume in late October or
early November.
Analysts at Emkay Global said the setback weakened the
investment case for semaglutide and increased the risk of
further earnings downgrades, cutting its fiscal 2027 earnings
estimates for the company by about 7%.
Systematix downgraded the stock to “hold” from “buy”, saying
the disruption could erode Dr Reddy’s first-mover advantage and
allow rivals to enter the market earlier, potentially hurting
pricing power and market share gains.
The brokerage cut its fiscal 2028 semaglutide revenue
estimate to $100 million from $150 million and lowered its
target price to ₹1,398 from ₹1,475 .
The drugmaker wiped $678 million off its market value on
Thursday after it halted commercial supplies of semaglutide
injections following the detection of an unspecified impurity
during the scale-up of active pharmaceutical ingredient
production.