Will Wockhardt's loss be Dr Reddy's gain? Analysts think so
Dr Reddy‘s has been among the best performers in the pharma sector this calendar, gaining around 33 percent so far.
November 28, 2013 / 16:33 IST
Moneycontrol Bureau
Dr Reddy’s shares are up a little over 1 percent at Rs 2457 in morning trade, as analysts expect the company to gain from the US FDA’s ban on Wockhardt’s Chikalthana facility. Dr Reddy’s shares rose less than 1 percent on Wednesday, though the news had come in at the start of market hours. Dr Reddy’s has been among the best performers in the pharma sector this calendar, gaining around 33 percent so far.The stock had touched a record high of Rs 2545 in late October.A glance at what brokerages are saying about the stock:Kotak:With the import alert for Wockhardt’s Chikalthana facility, we expect the competitive landscape to improve for Toprol-XL; Dr Reddy’s ramp-up in Toprol-XL has been below expectations given the competitive dynamics and price erosion. Given the exit of Wockhardt (which held close to 25 percent share), we expect Dr Reddy’s to gain additional market share.Citi:We expect Dr Reddy's to be among the key beneficiaries of the import alert imposed on Wockhardt's Chikalthana plant. While this would primarily be in the form of greater share and possibly better pricing in Toprol XL, there could be some upside in products such as Prevacid DR and Lamictal ER as well. Dr Reddy's remains our top large-cap pick in Indian pharma.Morgan Stanley: We estimate the current size of the metoprorol XL market to be approximately USD 300 million. Wockhardt’s exit should result in a USD 60 million -plus sales opportunity for the incumbents. Wockhardt’s exit from the lamotrigine XR market could imply USD 10 million sales upside for incumbents. If DRL can translate the above opportunities into market share, we see USD 20-25 million sales upside (with high margins) on an annualized basis, implying around 3 percent earnings tailwind for F15. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
