Accumulate Dr Reddys Laboratories, tgt Rs 755: Angel

Angel Broking has maintained its accumulate rating on Dr Reddys Laboratories with a target price of Rs 755 in its July 21, 2008 research report. "For 1QFY2009, DRL registered a yoy growth in Net Sales of 24.9% to Rs 1481 crore (Rs 1186 crore) primarily aided by growth in the North American market, both in the Generic and API segment. This growth in Sales has come well ahead of our expectations. However, the same does not reflect in Net Profits, which declined 50.8% during the period."

"Overall, over FY2008-10E, DRL is expected to post a CAGR of 16.6% and 28.3% on the Sales and Net Profit front. Robust Sales growth along with improvement on the Operating front would drive the same. On valuation front, the stock is trading at 16.2x FY2009E and 15.7x FY2010E EPS, which is at discount to its peers and historical multiples. We maintain our Accumulate rating on the stock, with a target price of Rs 755," says Angel's research report.

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