DRREDDY - Swing Trade Analysis with AI Signals

Last Updated Time : 20 Dec 25, 07:01 am

Swing Trade Rating: 3.6

📊 DRREDDY shows moderate-to-strong potential for swing trading. Current price (₹1,280) is above both 50 DMA (₹1,257) and 200 DMA (₹1,252), reflecting short-term bullish support. RSI at 59.0 indicates neutral-to-positive momentum, while MACD (8.51) confirms mild bullish trend. Fundamentals are strong with ROCE (25.8%) and ROE (20.3%), supported by low debt (0.13). Valuation is attractive with a P/E of 19.8 compared to industry average of 30.6. Optimal entry would be near ₹1,250–₹1,270 on dips. If already holding, exit near ₹1,380–₹1,400 resistance unless momentum strengthens further.

✅ Positive

• 📈 Strong ROCE (25.8%) and ROE (20.3%) show efficient capital use
• 📉 Low debt-to-equity (0.13) ensures financial stability
• 📊 EPS at ₹64.7 supports valuation strength
• 📈 Dividend yield at 0.62% adds investor appeal
• 📊 DII holding increased (+1.26%), showing domestic investor confidence

⚠️ Limitation

• 📉 Quarterly PAT dropped sharply from ₹2,961 Cr. to ₹387 Cr. (-79.4%)
• 📊 RSI at 59.0 indicates limited upside momentum
• ⚠️ FII holding decreased (-0.64%)

🚨 Company Negative News

• 📉 Significant decline in quarterly profit (-79.4%)
• ⚠️ Short-term earnings volatility may impact sentiment

🌟 Company Positive News

• 📈 Attractive valuation with P/E (19.8) below industry average (30.6)
• 📊 Strong fundamentals with high ROCE and ROE
• 📈 Domestic institutional investors increasing stake

🏭 Industry

• 📊 Industry P/E at 30.6, higher than company’s 19.8, suggesting undervaluation
• 📈 Pharma sector has long-term growth potential with global demand tailwinds

📌 Conclusion

⚖️ DRREDDY is a fair swing trade candidate with strong fundamentals and attractive valuation, though short-term earnings weakness is a concern. Entry is favorable near ₹1,250–₹1,270 on dips. For existing holders, exit near ₹1,380–₹1,400 resistance is advisable unless RSI and MACD show stronger recovery.

I can also highlight DRREDDY’s short-term support and resistance zones in a simple chart to make entry and exit levels easier to track.