Shares of Dr Reddy's Laboratories gained over 1% on September 28 following Nomura's continued positive outlook. According to reports from Moneycontrol, the stock was trading at ₹1,213.60 on the NSE at 9:34 am, representing a 1.05% increase. Nomura maintained its 'Buy' rating and ₹1,740 target price, based on 24x one-year forward EPS of ₹72.60. The brokerage noted that the stock currently trades at 17.4x and 14.6x FY28F and FY29F EPS, respectively.
Nomura highlighted two critical upcoming milestones for Dr Reddy's biologics business. As reported by Moneycontrol, the brokerage expects USFDA clearance/EIR for the company's biologics plant in the near term, with the 90-day period ending on September 23, 2026. Additionally, the biosimilar Abatacept (intravenous) action date is scheduled for December 18, 2026, with management expressing hope for a positive outcome. The brokerage noted that management is hopeful of resolving the outstanding observations and obtaining site clearance for the biologics facility.
According to Nomura's analysis reported by Moneycontrol, the USFDA inspected both the old and new blocks at the manufacturing facility in June 2026. The old block inspection focused on remediation implementation, while the new block, intended for Abatacept production, was inspected for the first time. The brokerage noted that Rituximab was approved in August 2026 from the same site, suggesting the agency may not have serious concerns about the facility. This approval provides confidence that the regulatory response for the biologics plant will be favorable in the near term.
Regarding the Abatacept biosimilar, Nomura reported that the company has been engaging frequently with the USFDA, responding to information requests, with management believing the review is progressing well. As reported by Moneycontrol, if approved, the company has sufficient capacity for commercial requirements and no scale-up challenges are expected, as the process has been validated through multiple commercial-scale batches. The brokerage maintained its constructive outlook on biosimilars over the medium to long term, noting that large opportunities are emerging as biologics lose exclusivity and regulatory pathways become easier.
Nomura expressed continued optimism about the biosimilars sector, noting that large opportunities are emerging as biologics lose exclusivity and regulatory pathways become easier. According to the brokerage's assessment reported by Moneycontrol, while competitive intensity is expected to rise, it will remain below that of small-molecule generics. The brokerage maintained its 'Buy' rating and ₹1,740 target price, based on 24x one-year forward EPS of ₹72.60, reflecting confidence in the company's biologics pipeline and manufacturing capabilities.
