Accumulate Dr. Reddy's Laboratories; target of Rs 4834: Dolat Capital

Dolat Capital's research report on Dr. Reddy's Laboratories

Dr Reddy’s settles with BMS on multiple myeloma drug, Revlimid for a limited volume launch during FY23-26, post which the volume cap will be lifted. Dr Reddy’s is the third company to settle post Natco and Alvogen, though details of the settlement term are not known yet. The key variables are (1) timing of the launch (2) market share allowed to Dr Reddy’s.

Outlook

This adds NPV value of Rs175 per share to our target price. While we maintain our estimates for Dr Reddy’s, we add Revlimid’s optionality and upgrade our target price to Rs4,834 (25x FY22 for base business).