Feb 22, 2013, 01.21 PM | Source: Moneycontrol.com
Firstcall Research has recommended hold rating on Dr Reddys Laboratories with a target price of Rs 2050, in its February 20, 2013 research report.
, Firstcall Research |
"Dr Reddys Laboratories is an integrated global pharmaceutical company which provides affordable & innovative medicines for healthier lives. Dr. Reddy's together with its subsidiaries have launched the recommended public offers to acquire all the issued & outstanding shares of OctoPlus N.V. at an offer price of EUR 0.52 per share. During the quarter, the robust growth of Net Sales is increased by 3.47% to Rs. 28651.60 million. During the quarter, the company launched 17 new products, filed 13 new product registrations and filed 13 DMFs globally. Dr Reddys has launched Desloratadine ODT, a bioequivalent generic version of Clarinex® Reditabs® in the US market. Dr. Reddy's has launched Finasteride Tablets, a bioequivalent generic version of Propecia® (Finasteride) Tablets in the US. Net Sales and PAT of the company are expected to grow at a CAGR of 18% and 11% over 2011 to 2014E respectively.
The company's net profit declines to Rs.3633.10 million against Rs.5129.60 million in the corresponding quarter ending of previous year, a decrease of 29.17%. Revenue for the quarter rose 3.47% to Rs.28651.60 million from Rs.27691.90 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.21.39 a share during the quarter, registering 29.31% decrease over previous year period. Profit before interest, depreciation and tax is Rs.4525.10 millions as against Rs.7547.20 millions in the corresponding period of the previous year.
At the current market price of Rs.1830.00, the stock P/E ratio is at 21.56 x FY13E and 20.69 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs 84.87 and Rs.88.45 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 18% and 11% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 17.95 x for FY13E and 17.05 x for FY14E. Price to Book Value of the stock is expected to be at 4.83 x and 3.92 x respectively for FY13E and FY14E. We recommend 'HOLD' in this particular scrip with a target price of Rs 2050 for Medium to Long term investment," says Firstcall Research report.
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