RDY Shorts Build Ahead of Friday Print

Dr. Reddy's Laboratories heads into its May 15 results with short sellers quietly adding exposure — even as the stock bounced back Wednesday.

The most notable pre-earnings signal is the pace of short building. Estimated short interest climbed 14% over the past week to roughly 15.7 million shares. That followed a brief dip in late April before a renewed push higher from May 7. Days to cover now run at 8.6 — meaning it would take more than a week of average volume for shorts to fully unwind. The ORTEX short score has edged up to 55.3, a two-week high, confirming the gradual tightening of bearish conviction. Borrow costs remain subdued at 0.52%, suggesting this is orderly positioning rather than a frenzied squeeze setup.

Options are telling a more mixed story. The put/call ratio eased sharply on Wednesday to 0.64 — well below the prior four sessions, which all printed above 1.1. That recent defensive run pushed the PCR well above its 20-day average of 0.32 before Wednesday's reversal. The result is a z-score that is elevated but not extreme at 0.73, pointing to cautious rather than panicked hedging. Price action adds to the ambiguity: the stock gained 4.3% on Wednesday to close at $12.99, partially recovering a 3.5% weekly decline through Tuesday.

The analyst picture for the NYSE-listed ADR carries one credible recent data point. HSBC upgraded to Buy and raised its target to $16.90 in June 2025 — implying roughly 30% upside from Wednesday's close. That is the only actionable call within a reasonable window; other firm data referenced in the record relates to the India-listed shares and is not directly comparable to the ADR price. Institutionally, ownership is broadly supportive, with BlackRock adding 375,000 shares through April and several Indian asset managers also building positions in the most recent reporting period.

The print will test whether Dr. Reddy's can deliver earnings momentum consistent with its 21x trailing P/E — a multiple that has compressed about 1.9 points over the past month — while justifying the short buildup that has accelerated noticeably in the week ahead of the release.