Dr Reddy’s Laboratories shares extended losses on Wednesday, a day after the drugmaker reported quarterly net profit that missed analysts' estimates. The company's shares tanked as much as 3.66 percent to Rs 4,666.95 on the BSE before recovering some of those losses in late morning deals.

Dr Reddy's stock is on course to close lower for the third day in a row. At its intraday low, Dr Reddy's shares were down 10.32 percent on a year-to-date basis, and 16.86 percent lower than their 52-week high of Rs 5,613.65.

During market hours on Tuesday, Dr Reddy's had posted a 1.5 percent fall in net profit to Rs 570.8 crore for the first quarter of the current financial year on account of lower operating income.

Analysts in a CNBC-TV18 poll had estimated the pharmaceuticals company to post a net profit of Rs 700 crore over revenue of Rs 4,991.4 crore for the quarter ended June 30.

Revenue from operations, however, rose 11.4 percent to Rs 4,919.4 crore on a year-on-year basis. On the operational front, EBITDA decreased 12.3 percent to Rs 1,018.8 crore, while the EBITDA margin shrank by 560 bps to 20.7 percent from 26.3 percent.

Here’s what brokerages have to say about Dr Reddy's stock and Q1 performance:

Credit Suisse

The brokerage downgraded Dr Reddy's to 'neutral' from 'outperform', lowering its target price Rs 4,900 from Rs 5,200. The foreign brokerage said the company's Q1 performance was impacted by higher selling, general and administrative expense (SG&A) cost. The supply of the Sputnik V vaccine from Russia has been limited and the company will likely miss the golden period of vaccine supply shortage in India, it added.

Morgan Stanley

It maintained an 'overweight' rating on Dr Reddy's with a target of Rs 5,859. It expects new launches and operating leverage to drive a recovery in the margin for the company soon. The drug maker's new health-tech initiative can create value in the medium term.

Goldman Sachs

The brokerage has a 'neutral' rating on Dr Reddy's with a target of Rs 5,110. The US active pharmaceutical ingredients price erosion dents its margins, said the brokerage, which cut its FY22-24 EPS estimates by 6-13 percent.

Jefferies

It has a 'buy' rating on Dr Reddy's with a target price of Rs 5,761 against Rs 6,209 earlier. The brokerage said Dr Reddy's revenue, EBITDA and PAT missed its estimates, and the North America revenue came in flat with market share gains offsetting price erosion.

CLSA

"Dr Reddy’s results were below our estimates as a higher-than-expected return of costs pulled down operating margins. It reported strong sales in India and EMs, but API sales were weak. Despite higher SG&A/R&D costs, margin profile should improve in coming quarters due to limited competition in US launches and a stronger outlook for branded markets," said CLSA, which reiterated a 'buy' call on the stock and lowered its SoTP-based target price from Rs 6,210 to Rs 5,930.

"Factoring in the Q1 miss, higher SG&A, and slow vaccine rollout, we cut our FY22-24CL EPS by 3-10 percent," it added.

At 11:24 am, the stock traded 2.78 percent lower at Rs 4,709.85 on the bourse, underperforming the benchmark S&P BSE Sensex index, which was down 504.10 points or 0.96 percent at 52,074.66.