Accumulate Dr Reddys Labs; target of Rs 1859: Angel Broking

Angel Broking is bullish on Dr Reddys Labs and has recommended accumulate rating on the stock with a target of Rs 1859 in its October 30, 2012 research report.

“Dr. Reddy’s Laboratories (DRL) reported a just in line top-line and bottom-line performance for 2QFY2013. The company’s net sales increased by 27.0% yoy, led by a 25.0% yoy and 33% yoy growth across the global generics and proprietary products businesses, respectively. We recommend Accumulate on the stock.”

“DRL reported net sales of Rs2,881cr for 2QFY2013, registering a 27.0% yoy growth, which was in line with our estimate of Rs2,800cr. The US and ROW formulations were the key growth drivers for the company, registering a strong growth of 47.0% yoy and 50.0% yoy, respectively. The domestic market reported a strong growth of 12.0% yoy. On the positive side the PSAI segment posted a robust growth of 33.0% yoy during the quarter. The company’s EBIT margin expanded by 365bp yoy to 19.2%, resulting in adjusted net profit growing by 76.8% yoy to Rs494cr during the quarter.”

“DRL has reinforced its earlier revenue guidance of US$2.7bn by FY2013E with RoCE of 25%. We expect net sales to report a 9.8% CAGR to Rs11,662cr and adjusted EPS to record a 2.3% CAGR to Rs92.9 over FY2012-14E. We maintain our Accumulate rating on the stock with a target price of Rs1,859,” says Angel Broking research report. 

Shares held by Financial Institutions/Banks

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment

Read More