Motilal Oswal's research report on Dr Reddys Labs
DRRD delivered in-line sales (adj. for NRT acquisition and milestone income) and marginally better operational performance in 3QFy25. Revenue/EBITDA YoY growth was moderate due to lower off-take of g-Revlimid and PSAI business, which was offset to some extent by healthy performance in the Russia market.
Outlook
We lower our earnings estimates by 5%/3% for FY26/FY27, factoring in 1) a gradual pick-up in potential launches in the NA market, thereby limiting visibility for growth beyond g-Revlimid; and 2) price erosion in the base portfolio. We value DRRD at 20x 12M forward earnings to arrive at a TP of INR1,330.
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