Key Events This Week
23 Feb: Stock rallies 2.09% to Rs.1,307.00 amid positive market sentiment
24 Feb: Market correction impacts stock, down 0.58% to Rs.1,299.40
26 Feb: Technical momentum shifts signal stabilisation with a 0.94% gain to Rs.1,318.90
27 Feb: MarketsMOJO upgrades rating to Hold; stock closes lower at Rs.1,287.20 (-2.40%)
Monday, 23 February: Strong Start with 2.09% Gain
Dr Reddys Laboratories began the week on a positive note, rising 2.09% to close at Rs.1,307.00. This outperformance compared to the Sensex’s 0.39% gain was supported by robust buying interest, with volume reaching 62,343 shares. The stock’s strength was in line with a broader market rally, but also reflected early signs of technical momentum improvement that would become clearer later in the week.
Tuesday, 24 February: Market Correction Weighs on Stock
On 24 February, the stock retreated by 0.58% to Rs.1,299.40 amid a broader market sell-off where the Sensex fell 0.78%. The decline was accompanied by lower volume of 46,287 shares, indicating some profit-taking after Monday’s gains. This pullback was consistent with the mixed technical signals observed, as short-term moving averages remained mildly bearish despite underlying stabilisation.
Wednesday, 25 February: Recovery with Moderate Gains
The stock rebounded on 25 February, gaining 0.55% to Rs.1,306.60 on strong volume of 148,473 shares. This recovery coincided with a 0.41% rise in the Sensex, suggesting renewed investor confidence. The intraday price action reflected a tightening trading range, consistent with the sideways technical trend that was forming. This day’s performance helped set the stage for the technical upgrade announced later in the week.
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Thursday, 26 February: Technical Momentum Shifts Signal Stabilisation
The stock advanced 0.94% to Rs.1,318.90 on 26 February, supported by a volume of 40,833 shares. This day marked a significant technical shift as MarketsMOJO’s analysis highlighted a transition from a mildly bearish to a sideways trend. Weekly MACD and Bollinger Bands turned bullish, while RSI remained neutral, indicating a stabilising momentum. Despite daily moving averages still showing mild bearishness, the overall technical picture suggested a base formation that could support future gains.
Friday, 27 February: Upgrade to Hold Amid Mixed Signals
On the final trading day of the week, Dr Reddys Laboratories closed lower by 2.40% at Rs.1,287.20, with volume of 44,904 shares. This decline came despite the MarketsMOJO upgrade from Sell to Hold announced on 26 February, reflecting improved technical and valuation metrics. The downgrade in price was influenced by broader market weakness, with the Sensex falling 1.16%. The upgrade was driven by stabilising technical indicators, attractive valuation relative to peers, and solid long-term fundamentals, even as recent quarterly earnings showed some softness.
| Date | Stock Price | Day Change | Sensex | Day Change |
|---|---|---|---|---|
| 2026-02-23 | Rs.1,307.00 | +2.09% | 36,817.86 | +0.39% |
| 2026-02-24 | Rs.1,299.40 | -0.58% | 36,530.09 | -0.78% |
| 2026-02-25 | Rs.1,306.60 | +0.55% | 36,679.75 | +0.41% |
| 2026-02-26 | Rs.1,318.90 | +0.94% | 36,748.49 | +0.19% |
| 2026-02-27 | Rs.1,287.20 | -2.40% | 36,322.56 | -1.16% |
Key Takeaways
Technical Stabilisation: The week saw a clear shift in technical momentum from bearish to sideways, supported by bullish weekly MACD and Bollinger Bands. This suggests the stock is consolidating after recent volatility, potentially forming a base for future directional moves.
Valuation and Rating Upgrade: MarketsMOJO upgraded Dr Reddys Laboratories from Sell to Hold on 26 February, citing improved technical indicators and attractive valuation metrics such as a P/B ratio of 3.0 and a solid ROE of 15.78%. This upgrade reflects cautious optimism despite recent quarterly profit declines.
Mixed Financial Signals: While long-term sales and operating profit growth remain healthy, recent quarterly results showed a 16.2% drop in PAT and the lowest half-year ROCE in recent periods. The company’s low debt and strong institutional ownership provide a stabilising backdrop.
Relative Outperformance: Dr Reddys outperformed the Sensex over the week (+0.54% vs -0.96%) and over longer horizons, including a 16.73% return over one year versus the Sensex’s 10.25%. This relative strength underscores the stock’s resilience amid sector and market fluctuations.
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Conclusion
Dr Reddys Laboratories Ltd’s performance this week reflects a nuanced balance between stabilising technical momentum and mixed fundamental signals. The upgrade to a Hold rating by MarketsMOJO highlights improved valuation and technical outlook, even as recent quarterly earnings showed softness. The stock’s relative outperformance against the Sensex and strong institutional backing provide a supportive context for investors maintaining a cautious stance. While the short-term price action remains volatile, the technical indicators suggest a consolidation phase that could precede a clearer directional trend. Investors should monitor upcoming price and volume developments to assess whether this stabilisation leads to renewed strength or further correction.
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