DRREDDY - Technical Analysis with Chart Patterns & Indicators

Last Updated Time : 20 Dec 25, 03:54 pm

Technical Rating: 3.7

📊 Technical Analysis

• Chart Patterns: Price (1,280 ₹) is above both 50 DMA (1,257 ₹) and 200 DMA (1,252 ₹), showing bullish alignment.
• Moving Averages: Positive bias as price sustains above short-term and long-term averages.
• RSI: 59.0 → neutral to slightly bullish, not overbought yet.
• MACD: 8.51 → bullish crossover, confirming upward momentum.
• Bollinger Bands: Price near mid-to-upper band, suggesting consolidation with potential breakout.
• Volume Trends: Current volume (9.12 Lakh) is slightly below 1-week average (10.17 Lakh), showing moderate participation.

📈 Momentum & Signals

• Short-term Momentum: Bullish bias supported by MACD and RSI strength.
• Support Zones: 1,250 ₹ (near-term), 1,200 ₹ (strong support), 1,020 ₹ (52-week low).
• Resistance Zones: 1,300 ₹ (near-term), 1,350 ₹ (psychological), 1,406 ₹ (recent high).
• Optimal Entry: 1,250–1,270 ₹ range on dips.
• Optimal Exit: 1,350–1,400 ₹ range unless breakout above 1,406 ₹.
• Trend Status: Stock is consolidating with bullish bias; reversal possible if price sustains above 1,350 ₹.

✅ Positive

• Strong ROCE (25.8%) and ROE (20.3%) indicate efficient capital use.
• EPS of 64.7 ₹ supports valuation strength.
• DII holdings increased (+1.26%), showing domestic institutional confidence.
• PEG ratio (0.40) suggests favorable growth relative to valuation.

⚠️ Limitation

• Quarterly profit variation down by -79.4%, showing earnings pressure.
• FII holdings decreased (-0.64%), showing reduced foreign investor confidence.
• Dividend yield at 0.62% is modest.

📉 Company Negative News

• PAT dropped sharply from 2,961 Cr. to 387 Cr. in the latest quarter.
• Stock trading below 52-week high (1,406 ₹), reflecting limited momentum.

📈 Company Positive News

• Strong fundamentals with high ROCE and ROE.
• DII holdings increased, balancing FII outflows.
• PEG ratio indicates attractive growth potential.

🏭 Industry

• Industry PE at 30.6, higher than company PE (19.8), suggesting Dr. Reddy’s trades at a discount.
• Pharmaceutical sector remains resilient with global demand supporting long-term growth.

🔎 Conclusion

• Stock is consolidating with bullish bias supported by MACD and RSI strength.
• Best entry near 1,250–1,270 ₹; exit near 1,350–1,400 ₹ unless breakout above 1,406 ₹.
• Long-term investors benefit from strong fundamentals and attractive valuation, but should monitor earnings volatility.