Shares of Dr Reddy's Laboratories rose over 3% in early trade on Tuesday after the company denied reports claiming it was undertaking a 25% reduction in workforce costs through large-scale layoffs.
In an exchange filing, the company said it “categorically denies” the claims made in a Business Standard report which suggested that senior executives, including those earning over Rs 1 crore per annum, had been asked to resign. The report also alleged that employees aged 50-55 in the research and development division were offered voluntary retirement.
Calling the report “factually incorrect,” Dr Reddy's said, “The company does not comment on market speculations, and there is currently no such event or information which requires a disclosure.”
The news report linked the alleged cost-cutting to margin pressures from Dr Reddy's generic version of Revlimid and underperformance in newer ventures such as nutraceuticals and digital therapeutics.
The company has been on an expansion path, ramping up hiring in recent years ahead of its joint venture with Nestlé and fresh product launches.
Dr. Reddy's Share Price Today
Dr. Reddy's stock rose as much as 3.45% during the day to Rs 1,147.80 apiece on the NSE. It was trading 2.92% higher at Rs 1141.90 apiece, compared to a 2% advance in the benchmark Nifty 50 as of 9:26 a.m.
It has fallen 4.80% in the last 12 months and 17.57% on a year-to-date basis. The relative strength index was at 50.20.
Fifteen out of the 40 analysts tracking the pharma company have a 'buy' rating on the stock, 11 recommend a 'hold' and 14 suggest a 'sell', according to Bloomberg data. The 12-month analysts' consensus target price on the stock is Rs 1338.36, implying an upside of 20.6%.
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