Buy Dr Reddys Labs; target of Rs 1864: Firstcall Research

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Buy Dr Reddys Labs; target of Rs 1864: Firstcall Research

Firstcall Research is bullish on Dr Reddys Labs and has recommended buy rating on the stock with a target of Rs 1864 in its February 16, 2012 research report.

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Firstcall Research is bullish on Dr Reddys Labs and has recommended buy rating on the stock with a target of Rs 1864 in its February 16, 2012 research report.

"Established in 1984, Dr. Reddy's Laboratories Ltd. is an integrated global pharmaceutical company, committed to providing affordable and innovative medicines for healthier lives. Dr Reddy's started its operation in the Active Pharmaceutical Ingredients (API) segment, with a single drug in 60 tonne facility near Hyderabad. In 1986 it shipped its first consignment of Methyldopa drug to West Germany. During FY11, the company launched 135 new generic products, filed 107 new product registrations and filed 56 DMFs globally. April 11, 2001, the symbolic bell rang and Dr. Reddy's became the first pharmaceutical company in the Asia-Pacific, outside Japan, to be listed on NYSE. Dr. Reddy's Lab is the fastest Indian Pharma Company to cross $1 billion in revenues."

"Dr. Reddy's Lab. has reported consolidated net profit of Rs 5129.60 million for the quarter ended on December 31, 2011 as against Rs. 2731.40 million in the same quarter last year, an increase of 87.80%. It has reported net sales of Rs 27691.90 million for the quarter ended on December 31, 2011 as against Rs 18985.10 million in the same quarter last year, a rise of 45.86%. Total income grew by 45.22% to Rs. 27856.70 million from Rs.19183.00 million in the same quarter last year. During the quarter, it reported earnings of Rs 30.26 a share. During the quarter, Net sales rose by 45.86% to Rs.27691.90 million from Rs.18985.10 in the same the quarter last year and the Total Profit for quarter ended December 2011 was Rs. 5129.60 million grew by 87.80% from Rs. 2731.40 million compared to same quarter last year."

"At the current market price of Rs 1650, the stock is trading at 17.95 x FY12E and 15.73 x FY13E respectively. Earning per share (EPS) of the company for the earnings for FY12E and FY13E is seen at Rs.91.95 and Rs.104.92 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 17% and 71% over 2010 to 2013E respectively. On the basis of EV/EBITDA, the stock trades at 14.10 x for FY12E and 12.28 x for FY13E. Price to Book Value of the stock is expected to be at 5.00 x and 3.80 x respectively for FY12E and FY13E. We expect that the company will keep its growth story in the coming quarters also. We recommend 'BUY' in this particular scrip with a target price of Rs 1864 for medium to long term investment," says Firstcall Research report.

Public holding more than 90% in Indian cos

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To read the full report click on the attachment