DRREDDY - Technical Analysis with Chart Patterns & Indicators

Last Updated Time : 05 Nov 25, 7:43 am

Technical Rating: 2.9

📉 DRREDDY is currently in a reversing phase, with bearish momentum indicators and price action below key moving averages.

📊 Technical Overview

• Trend Status: Reversing — price has declined from ₹1,406 to ₹1,196, nearing its 52-week low of ₹1,020.
• Moving Averages: Price is below both 50 DMA (₹1,262) and 200 DMA (₹1,253), confirming short-term bearish sentiment.
• RSI (33.8): Near oversold territory, indicating weak momentum and potential for a technical bounce.
• MACD (-8.15): Negative crossover supports continued bearish pressure.
• Bollinger Bands: Price near lower band, suggesting volatility and possible short-term support.
• Volume: Slightly below average (43.3L vs 45.4L), indicating cautious participation.

📌 Entry & Exit Zones

• Support Zone: ₹1,150–₹1,180 — potential entry zone if reversal signals emerge.
• Resistance Zone: ₹1,250–₹1,270 — ideal for exit or partial profit booking.
• Breakout Level: ₹1,300+ — crossing this could signal trend recovery.

✅ Positive

• Strong ROCE (25.8%) and ROE (20.3%) reflect efficient capital use.
• Low debt-to-equity ratio (0.13) supports financial stability.
• EPS of ₹64.7 and reasonable PEG ratio (0.38) suggest value with growth potential.
• Positive DII holding change (+1.26%) shows domestic institutional confidence.

⚠️ Limitation

• Price trading below key moving averages with bearish MACD and weak RSI.
• Quarterly PAT dropped significantly from ₹2,961 Cr to ₹387 Cr, indicating earnings volatility.
• Low 52-week index (45.7%) and declining price action suggest underperformance.

📰 Company Negative News

• FII holding declined by 0.64%, reflecting reduced foreign investor confidence.
• Quarterly profit variation of -79.4% signals operational pressure.

🌟 Company Positive News

• Strong fundamentals and improving domestic institutional interest.
• Valuation remains attractive compared to industry average P/E (33.1).

🏭 Industry

• Operates in pharmaceuticals and generics, a sector driven by global healthcare demand and regulatory cycles.
• Industry P/E (33.1) is higher than the stock’s (18.5), indicating potential undervaluation.

🧾 Conclusion

• DRREDDY is technically weak in the short term with bearish indicators and declining price action.
• Entry near ₹1,150–₹1,180 only if reversal signs strengthen; watch for breakout above ₹1,300.
• Long-term investors may hold for fundamentals and valuation; short-term traders should remain cautious and monitor support levels.