Nov 13, 2017 04:15 PM IST | Source:

Buy Dr.Reddy’s Laboratories; target of Rs 3450: Dolat Capital

Dolat Capital is bullish on Dr.Reddy’s Laboratories has recommended buy rating on the stock with a target price of Rs 3450 in its research report dated October 31, 2017.

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Dolat Capital's research report on Dr.Reddy’s Laboratories

As per our expectations, earnings started picking up from Q2FY18 onwards. Revenues came in line with our expectations however, better margins aided earnings. If the key approvals come by expected timelines, DRL can show robust earnings in H2FY18E. A lot depends on timely approvals and pricing scenario for key assets in US. We remain optimistic as the management has indicated closer TAD dates for gCopaxone 20mg (10th Nov17), which could lead to sooner gCopaxone 40mg(Mar18). They also highlighted that TAD for gNuvaring and gSuboxone closer to Q4FY18. gAloxi is also another opportunity under litigation.

DRL, in our view, continues to be one of the strongest entities having built up leads in the injectables, biosimilars and complex oral solids. Given the core strengths of the business in R&D, we believe the current under performance offers an opportunity to accumulate over time. We have a BUY rating on the stock with a target price of ` 3,450 (20x FY19E EPS).

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