Accumulate Dr Reddy's Laboratories; target of Rs 5414: Dolat Capital Market

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

COVID products) and US (new launches). However, lower export incentive, higher price erosion, change in product mix and adverse currency impacted gross margins (54% in 2Q vs 56% in 1Q), in line with estimates. Adjusting for the impairment charge of Rs781mn for intangibles, EBITDA margins came in line at 24.3%. Further, lower tax rate (deferred tax benefit) aided profitability at Rs7.6bn (vs our estimate of Rs5.7bn).

Outlook

We value Dr Reddy’s at 25x FY23 EPS of Rs216.5. Maintain Accumulate.