DRREDDY - Technical Analysis with Chart Patterns & Indicators
Back to ListTechnical Rating: 3.9
| Stock Code | DRREDDY | Market Cap | 1,07,478 Cr. | Current Price | 1,287 ₹ | High / Low | 1,380 ₹ |
| Stock P/E | 23.2 | Book Value | 378 ₹ | Dividend Yield | 0.62 % | ROCE | 25.8 % |
| ROE | 20.3 % | Face Value | 1.00 ₹ | DMA 50 | 1,273 ₹ | DMA 200 | 1,256 ₹ |
| Chg in FII Hold | -2.35 % | Chg in DII Hold | 2.45 % | PAT Qtr | 90.6 Cr. | PAT Prev Qtr | 387 Cr. |
| RSI | 52.6 | MACD | 9.30 | Volume | 8,63,104 | Avg Vol 1Wk | 13,76,252 |
| Low price | 1,020 ₹ | High price | 1,380 ₹ | PEG Ratio | 0.47 | Debt to equity | 0.13 |
| 52w Index | 74.2 % | Qtr Profit Var | -89.3 % | EPS | 55.6 ₹ | Industry PE | 27.6 |
📊 Chart & Trend Analysis: DRREDDY is trading at ₹1,287, slightly above its 50 DMA (₹1,273) and 200 DMA (₹1,256), indicating mild bullish momentum. RSI at 52.6 suggests neutral-to-positive strength. MACD at 9.30 confirms positive momentum. Bollinger Bands show price near the mid-range, with support around ₹1,256 and resistance near ₹1,380.
📈 Momentum Signals: Current volume (8.63 lakh) is lower than the 1-week average (13.76 lakh), showing reduced participation. RSI above 50 and positive MACD reinforce bullish bias, though weak volume suggests limited conviction.
💡 Entry Zone: Optimal entry around ₹1,260–1,280 (near support).
🚪 Exit Zone: Resistance seen at ₹1,380 (recent high). Profit booking advised near this level.
🔎 Trend Status: The stock is currently consolidating with mild bullish bias. A breakout above ₹1,380 would confirm upward momentum.
Positive
- Strong ROCE (25.8%) and ROE (20.3%) reflect efficient capital use.
- Low debt-to-equity ratio (0.13) ensures financial stability.
- EPS of ₹55.6 supports earnings visibility.
- DII holding increased (+2.45%), showing strong domestic institutional support.
- 52-week index gain of 74.2% highlights long-term strength.
Limitation
- Sequential PAT decline (₹90.6 Cr vs ₹387 Cr) indicates margin pressure.
- High P/E (23.2) compared to industry average (27.6) is reasonable, but PEG ratio (0.47) suggests limited growth relative to valuation.
- Volume participation is lower than average, showing reduced market interest.
Company Negative News
- Decline in FII holding (-2.35%) shows reduced foreign investor confidence.
- Sharp sequential profit decline highlights earnings volatility.
Company Positive News
- DII holding increased (+2.45%), reflecting strong domestic institutional support.
- Quarterly profit variation (+9.88% YoY) highlights resilience despite sequential decline.
Industry
- Industry P/E at 27.6 is slightly higher than DRREDDY’s P/E, suggesting fair valuation compared to peers.
- Pharmaceutical sector remains resilient, supported by global demand for generics, APIs, and specialty formulations.
Conclusion
⚖️ DRREDDY shows strong fundamentals (healthy ROE/ROCE, low debt, institutional support) but faces earnings volatility and weak volume participation. Short-term consolidation with mild bullish bias is evident. Entry near ₹1,260–1,280 offers margin of safety, while exits should be considered near ₹1,380. Long-term investors may hold for sector resilience, while traders should wait for confirmation above ₹1,380 before aggressive buying.
Would you like me to extend this into a peer benchmarking overlay (e.g., comparing DRREDDY with Sun Pharma, Cipla, and Divi’s Labs) to highlight relative strength and sector rotation opportunities?