Dr Reddy's Expands Portfolio With Stugeron Buy SEBI Analysts Flag Cost Risks But See Medium-Term Gains

Shares of Dr. Reddy's Laboratories fell Thursday after the company completed a deal with Johnson & Johnson affiliate Janssen Pharmaceutica NV to acquire its anti-vertigo drug under the Stugeron brand for ₹445 crore ($50.5 million). 

The acquisition includes Stugeron FORTE and Stugeron PLUS, along with related assets across 18 markets in the Asia-Pacific and EMEA regions, with India and Vietnam as key markets.

Portfolio Expansion

Dr. Reddy's said the acquisition would strengthen its presence in brain and nervous system treatments while opening a new foothold in the anti-vertigo market. 

Stugeron, which contains cinnarizine, already leads its category in India and ranks second in the overall vertigo space.

SEBI-registered investment advisor Nidhi Saxena of Trade Bond said the deal faced some initial investor caution due to cost and integration risks, but she described it as strategically positive in the medium term, adding depth to Dr. Reddy's branded portfolio and expanding its Central Nervous System pipeline beyond generics.

Technical View

Saxena pegged resistance for the stock in the ₹1320–₹1340 zone, with a breakout potentially opening levels of ₹1360–1380 and a medium-term target of ₹1400–1450. Support lies at ₹1240–1260, with ₹1200 as a critical level to hold. 

She added that dips closer to ₹1240–₹1250 remain suitable for accumulation, while a confirmed breakout above ₹1340 would reinforce bullish momentum.

Meanwhile, SEBI-registered analyst Sunil Kotak noted that on the one-hour chart, the stock is trading in a retracement zone between ₹1270–₹1290, with upside resistance at ₹1320–₹1340. 

He described the bias as sideways and pointed out that the Relative Strength Index remains below 60, suggesting momentum is lacking.

Risks To Watch

Saxena cautioned that weakness in the U.S. generics business, higher integration costs, or regulatory challenges could drag the stock back toward ₹1200 or even ₹1140–₹ 1100 in a bearish scenario.

What Is The Retail Mood?

On Stocktwits, retail sentiment was 'bullish' amid 'normal' message volume.

Dr's stock has declined 5.4% so far in 2025.

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