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Dr Reddy Share Price Falls 8% After ₹2,395 Crore Tax Notice

Written by: Kusum KumariUpdated on: Apr 7, 2025, 11:25 PM IST
Dr Reddy’s shares dropped 8% to a 52-week low after a ₹2,395 crore tax notice. The company denies tax evasion and says operations remain unaffected.
Dr Reddy Share Price Falls 8% After ₹2,395 Crore Tax Notice
ShareShare on 1Share on 2Share on 3Share on 4Share on 5

Dr Reddy share price plunged 7.55% on April 7, hitting an intraday low of ₹1,025.90. The decline followed a show cause notice from the Income Tax (I-T) department regarding a tax reassessment.

Tax Notice Details

The I-T department issued a notice of ₹2,395.81 crore under Section 148A of the Income Tax Act. The notice, received on April 4, questions the company’s tax returns for the financial year 2019-20. The issue relates to the merger of Dr Reddy’s Holding Limited (DRHL) into Dr Reddy’s Laboratories Limited (DRL), which was approved by the National Company Law Tribunal (NCLT) on April 5, 2022.

Dr Reddy maintains that there is no tax evasion and is reviewing the notice before responding appropriately. The company also stated that this development will not significantly impact its financials or operations.

About Dr. Reddy’s

Founded in 1984 by Dr. Kallam Anji Reddy, Dr. Reddy’s is a Hyderabad-based pharmaceutical company. It manufactures and markets prescription drugs, over-the-counter medicines, and active pharmaceutical ingredients (APIs). The company operates in multiple markets, including the US, Europe, Latin America, and Asia.

Dr Reddy specialises in generics, branded generics, biosimilars, and innovative formulations across key therapeutic areas such as gastroenterology, cardiology, oncology, pain management, and dermatology.

Read More Metropolis Healthcare to Acquire Dehradun’s DAPIC for ₹35 Crore to Expand North India Presence

Market Capitalization & Trading Status

Dr Reddy’s has a market capitalisation of ₹91,093 crore and is part of the BSE 100 index. As of 11:13 AM, the stock was trading 1.63% lower at ₹1,091.70, while the BSE Sensex had dropped 3.74% to 72,544.62.

Conclusion

Despite the sharp decline, Dr Reddy maintains that the tax notice will not impact its business. Investors will watch for further developments as the company responds.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Published on: Apr 7, 2025, 11:57 AM IST

Kusum Kumari

Kusum Kumari is a Content Writer with 4 years of experience in simplifying financial market concepts. Currently crafting insightful content at Angel One, She specialise in breaking down complex topics into easy-to-understand pieces, blending expertise in market fundamentals and technical analysis.

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