Dr Reddy’s Shares Rally Post Results: Charts Hint At Swing Trade Opportunity, SEBI RA Bullish Above This Support Zone

Dr Reddy’s shares rose over 2% on Thursday after the company reported a steady quarter, aided by stable margins and strong execution in Europe and India. 

SEBI-registered analyst Rajneesh Sharma added that its technical charts are flashing signs of a potential bounce, presenting a potentially attractive zone for swing traders and longer-term investors. He flagged ₹1,199 as the zone to monitor. 

Earnings Snapshot 

Q1 revenue grew 11% to ₹8,545 crore year-on-year (YoY), supported by branded markets and new launches. EBITDA stood at ₹2,278 crore, while Profit after tax (PAT) was ₹1,418 crore, representing a 16.5% margin but showing a slight quarter-on-quarter (QoQ) decline due to higher taxation and forex-related costs. 

Free cash flow was robust at ₹451 crore, alongside a net cash surplus of ₹2,922 crore.

What worked for Dr Reddy’s?

 The India segment posted revenues of ₹1,471 crore, supported by new brand launches, price increases, and market share gains, maintaining a 10th rank in the Indian Pharmaceutical Market (IPM). 

Emerging Markets revenues rose 18% YoY to ₹1,404 crore, with Russia (+28%) and Rest of World (+13%) contributing via volume and forex. Europe surged 142% YoY to ₹1,274 crore, while North America fell 11% to ₹3,412 crore.

Additionally, the company partnered with Alvotech for a Keytruda biosimilar (pembrolizumab) and launched 26 new products across global markets. 

Technical Trends

On its weekly chart, the stock is showing signs of a potential reversal, supported by momentum and price structure, Sharma noted. 

Dr Reddy’s is respecting a broadening ascending channel and testing the ₹1,199–₹1,215 support zone, a confluence of horizontal and trendline support. A previous failed breakout near ₹1,400 resulted in a double-top formation and a subsequent pullback.

The Relative Strength Index (RSI) shows a bullish divergence, currently at 53.66, which indicates a pivot toward bullish momentum. 

Key levels to watch include ₹1,199 – ₹1,215 (immediate support), with intermediate resistance at ₹1,299 – ₹1,305 and overhead resistance at ₹1,400. Long-term support is seen at ₹1,150 (lower channel). 

Sharma advised that short-term traders could anticipate a bounce, while positional players may watch for retest of ₹1,300 and higher levels in coming weeks if support holds. 

Dr Reddy’s shares have fallen 9% year-to-date (YTD).

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