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Informist, Thursday, Oct. 30, 2025

By Anjana Therese Antony

MUMBAI – The options chain of Dr. Reddy's Laboratories hinted at more downside for the stock amid worries about the non-compliance notice from Canada's health regulator for the company's semaglutide injection. Premiums on out-of-the-money call options tanked and those on put contracts rose, indicating further weakness in the stock price in the near term.

"In our opinion, this is a temporary setback, but we still believe that the relatively conservative estimates that we have built in for the opportunity in FY27 are still achievable," Elara Securities said in its report. The broking firm expects only limited players in the semaglutide market for some period of time due to the difficulties around regulatory approval of the product. It expects Dr. Reddy's to get final approval for the drug before March even though the company has not given a specific timeline for the same.

The notice from the Pharmaceutical Drugs Directorate, Canada, came at a time when the company was planning to launch the drug in the country. The drug has estimated annual sales of $1.6 billion in Canada, and the company was confident of achieving at least $300 million in revenue from semaglutide in the initial phase. A notice of non-compliance is issued when a drug fails to meet the regulatory requirements for approval. Dr. Reddy's is also preparing to launch semaglutide in Brazil and India by March, and in about 87 other international markets in a phased manner.

Shares of Dr. Reddy's closed almost 4% lower at INR 1,202.20 on the National Stock Exchange Thursday. The stock was the worst-hit Nifty 50 constituent. The company's market capitalisation fell by more than INR 400 billion to INR 1 trillion. Almost 9 million shares of the company changed hands on NSE Thursday, over three times the volume traded Wednesday.

In the options chain of Dr. Reddy's, the highest open interest addition was at INR 1,200 call and INR 1,100 put contracts. Premiums on call strikes INR 1,240-1,300 fell more than 60% and those on put options INR 1,200-INR 1,080 increased 66-88%. Traders also added short bets to the futures contracts of Dr. Reddy's. The November contract closed 4% lower at INR 1,201 and open interest rose almost 28% to 15.8 million.

--Nifty 50 November closed at 26037.40, down 201.30 points; 159.55-point premium to the spot index

--Nifty 50 December closed at 26216.70, down 194.50 points; 338.85-point premium to the spot index

--Nifty 50 January closed at 26381.60, down 195.80 points; 503.75-point premium to the spot index

Larsen & Toubro, Canara Bank, Bharat Heavy Electricals, Vodafone Idea, Aditya Birla Capital, Reliance Industries, Adani Green Energy, Dr. Reddy's, PB Fintech, State Bank of India, HDFC Bank, Cipla, and Union Bank of India were the most actively traded underlying stocks Thursday.  End

Edited by Ashish Shirke

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