Buy Dr Reddys Labs; target of Rs 1920: Angel Broking

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Buy Dr Reddys Labs; target of Rs 1920: Angel Broking

Angel Broking is bullish on Dr Reddys Labs and has recommended buy rating on the stock with a target of Rs 1920 in its October 28, 2011 research report.

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Angel Broking is bullish on Dr Reddys Labs and has recommended buy rating on the stock with a target of Rs 1920 in its October 28, 2011 research report.

"Dr. Reddy's Laboratories (DRL) reported higher-than-expected 2QFY2012 results. Net sales increased by 21.3% yoy, led by 18.0% yoy and 28.0% yoy growth across the global generics and proprietary products businesses, respectively. However, the company's net profit came in-line with our estimates, registering growth of 7.3% yoy to Rs 307cr (Rs 286cr), on account of lower-than-expected tax provision. Management has reinforced its FY2013 guidance of US$2.7bn, with RoCE expected to come in at 25%."

"DRL reported net sales of Rs 2,267.9cr (Rs 1,870.4cr) for 2QFY2012, registering 21.3% yoy growth, which was higher than our estimate of Rs 2,012.5cr. The US market reported strong growth of 42.0% yoy, led by new product launches and higher market share in its key markets. Sales from Russia grew by 23.0% yoy during the quarter. The domestic market reported single-digit growth of 9.0% yoy."

"DRL has reinforced its earlier revenue guidance of US$2.7bn by FY2013E with RoCE of 25%. We expect net sales to report a 13.3% CAGR to Rs 9,584cr and adjusted EPS to record a 22.7% CAGR to Rs 96.0 over FY2011-13E. We maintain our Buy recommendation on the stock with a revised target price of Rs 1,920," says Angel Broking research report.  

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