Buy Dr Reddys Labs; target of Rs 2044: Firstcall Research

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26 Aug, 2025 12:21

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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 2044 in its December 4, 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 ton 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.”
 
“The company’s net profit jumps to Rs.4074.40 million against Rs.3078.00 million in the corresponding quarter ending of previous year, an increase of 32.37%. Revenue for the quarter rose 27.03% to Rs.28808.50 million from Rs.22677.90 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.23.99 a share during the quarter, registering 32.12% increase over previous year period. Profit before interest, depreciation and tax is Rs.5242.40 millions as against Rs.3744.50 millions in the corresponding period of the previous year.”
 
“At the current market price of Rs 1825, the stock P/E ratio is at 19.25 x FY13E and 17.45 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs 94.79 and Rs.104.60 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 21% and 17% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 16.49 x for FY13E and 13.86 x for FY14E. Price to Book Value of the stock is expected to be at 4.70 x and 3.70 x respectively for FY13E and FY14E. We expect that the company surplus scenario is likely to continue for the next three years, will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs 2044 for medium to long term investment,” says Firstcall Research report.

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