Dr Reddy’s Shares Tumble as Semaglutide Supply Disruption Raises Growth Concerns
Dr Reddy’s Laboratories recorded its worst weekly stock performance in three years after announcing disruptions in the supply of its generic semaglutide drug. The company said production of new batches had been halted due to an impurity issue in the active ingredient, with supplies expected to remain unavailable in India and disrupted in Canada until at least late October.
The announcement triggered a wave of downgrades from analysts, with several brokerages cutting their price targets and lowering earnings estimates. Investors fear the delay could weaken the company’s pricing power, slow earnings growth, and reduce its ability to capture market share in the rapidly expanding diabetes treatment market. The stock fell 9.3% during the week, making it one of the biggest losers on the Nifty 50.
Analysts also warned that the setback could erase Dr Reddy’s first-mover advantage in the generic semaglutide segment, allowing rivals such as Zydus Lifesciences and Sun Pharmaceutical Industries to strengthen their positions. The timing of production recovery and demand after supplies resume will be closely watched as competition intensifies in India and overseas markets.
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