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Buy Dr. Reddy's Laboratories; target of Rs 4750: Prabhudas Lilladher

Prabhudas Lilladher is bullish on Dr. Reddy's Laboratories has recommended buy rating on the stock with a target price of Rs 4750 in its research report dated July 29, 2022.

July 31, 2022 / 03:26 PM IST
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Prabhudas Lilladher's research report on Dr. Reddy's Laboratories


Dr Reddy’s (DRRD) Q1FY23 profitability adjusted for one-time divestment income was weak impacted by lower GMs and US sales. Our FY24E EPS stands reduced by 4%. We expect margins to improve with easing of commodity and as revenue scale up with new launches in US like gRevlimid. India revenues were healthy. We estimate margins ex of gRevlimid at 19% and 22% in FY23E and FY24E.


Outlook


We maintain our ‘Buy’ rating with revised TP of Rs4,750/share (Rs4,900 earlier). At CMP, DRRD is trading at 20x P/E on FY24E adjusted for gRevlimid. We assign 22x FY24E EPS plus Rs250/share for gRevlimid NPV. Delay in key ANDA approvals and prolonged inflationary environment of raw material prices are key risks to our call.


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Dr. Reddy's Laboratories - 290722 - prabhu

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first published: Jul 31, 2022 03:26 pm
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