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Informist, Thursday, May 8, 2025

By Anjana Therese Antony

MUMBAI – More short bets have been added to the options chain of Dr. Reddy's Laboratories amid worries about likely tariffs on pharmaceutical products imported in the US. Premiums on deep out-of-the-money call options of Dr. Reddy's declined while those on put strikes increased. Though the company is scheduled to release on-year growth in its earnings for the March quarter Friday, its shares closed 1.1% lower at INR 1,148 Thursday on the National Stock Exchange.

Shares of the company are in the sideways-to-negative trend and will remain under pressure below INR 1,200, Emkay Global Financial Services Ltd. said in its post-market note. The support for the stock is seen at INR 1,120-INR 1,040, the broking firm said. The stock has fallen 3% in the past seven days, but rose almost 4% in 30 days. Premiums on INR 1,140-INR 1,090 call options expiring May 29 fell 5-11%, while those on INR 950-INR 1,140 put contracts rose 46-57%. The highest addition of open interest was at INR 1,170 call and INR 1,050 put strikes. 

The pharma company's consolidated net profit is seen rising 11% on year to INR 14.5 billion and revenue is growing 17% to INR 83.4 billion, according to the average of estimates from 15 brokerages. While growth figures are expected to be positive, market participants will look for management comments on the likely impact of the US tariffs and its strategies to mitigate the impact. The US contributes over 45% of Dr. Reddy's total sales. 

Meanwhile, the overall equity market is expected to move in a small range Friday, though it fell after the Indian government said Pakistan had increased firing along the Line of Control across Northern and Western India late. The Nifty 50 closed 0.6% lower at 24273.80 points and the BSE Sensex ended 0.5% lower at 80334.81 points. Market experts continue to believe that the aggravated diplomatic relation between the two neighbouring countries to have little impact on the equity market in the near term and could lead to knee-jerk reactions. The market is expected to recover from any losses in relation to this due to the strong growth prospects of India. 

--Nifty 50 May closed at 24207.50, down 253.90 points; 66.30-point discount to the spot index

--Nifty 50 Jun closed at 24305.00, down 265.30 points; 31.20-point premium to the spot index

--Nifty 50 Jul closed at 24454.10, down 253.30 points; 180.30-point premium to the spot index

HDFC Bank, Reliance Industries, ICICI Bank, BSE, Tata Motors, State Bank of India, Asian Paints, Canara Bank, Bajaj Finance, Kotak Mahindra Bank, ITC, Axis Bank, Punjab National Bank, Bharti Airtel, Larsen & Toubro, Voltas, Infosys, Bharat Forge, and Titan Co. were the most active underlying stocks Thursday.  End

Edited by Deepshikha Bhardwaj

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