Summary :
Dr. Reddy’s shares surged nearly 5% despite the USFDA issuing seven observations after inspecting its Bachupally biologics plant. Investors remained optimistic as most observations were linked to the newer manufacturing block, while the older facility had largely addressed previous issues. Strong trading volumes, a healthy product pipeline, and positive market sentiment supported the stock's rally.
However, the scrip of Dr. Reddy’s Laboratories saw a gain of nearly 5% on Monday, June 29, even as it got seven remarks from the US Food and Drug Administration (USFDA) on its bio-manufacturing plant located at Bachupally in Hyderabad. It reached a 52-week high of Rs 1,414.90 in intraday trading, marking gains for six consecutive days, up over 11%. The stock was trading near Rs 1,383, up 2.33%.
USFDA Inspection and Observations
PLI was performed by USFDA from June 16 to June 25, 2026, at the Bachupally plant and was completed in the form of Form 483 with seven observations. This comes after other previous inspections at the same facility, which include nine observations in October 2023 and five observations in September 2025, indicating a history of inspection at this particular site.
The firm indicated that it will attend to the observations in the required time frame.
Two-Block Facility Structure at Bachupally
There are two separate manufacturing blocks in the Bachupally biologics facility. One of them is the old block, where biosimilar Rituximab, a monoclonal antibody used for treating blood cancer, is manufactured. The other is the new block, which is used for manufacturing biosimilar Abatacept, a biologic for controlling the immune system.
It was observed by the market participants that majority of the USFDA observations are associated with the new Abatacept block, whereas those of the old Rituximab block have mostly been sorted out.
Strong Volumes
Momentum in the share price has been good, backed by above-average trading volume. About 4 million stocks have been traded, with a trading value of approximately ₹543.76 crores, which is well above the average volume. Trading volume was 3 times above the average.
Corporate Updates and Pipeline Developments
Dr. Reddy’s has also announced a final dividend of ₹8 per share with a record date of July 10, 2026. Dr. Reddy’s has been scheduled to release its Q1FY26 earnings on July 22, 2026.
Moreover, the firm has rolled out Bosutinib tablets 400 mg in the US market, which is a generic version of Bosulif. The brand was sold in the US at around $253.8 million in the 12 months ended April 2026.
However, overall, strong pipeline expectations, heavy volume, and favorable brokers’ outlook have helped in rallying Dr. Reddy’s stock.
