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Buy Dr. Reddy's Laboratories; target of Rs 4900: Prabhudas Lilladher

Prabhudas Lilladher is bullish on Dr. Reddy's Laboratories has recommended buy rating on the stock with a target price of Rs 4900 in its research report dated June 22, 2022.

June 22, 2022 / 01:13 PM IST
 
 
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Prabhudas Lilladher's research report on Dr. Reddy's Laboratories


Dr Reddy’s (DRRD) management outlined its strategy to create new (Horizon 2) business models, while growing in existing spaces (Horizon 1) to drive sustainable growth. The company expects double digit revenue growth in the medium term, with aspiration of +25% OPM and 25% RoCE. Horzion 2 will focus on biosimilars, nutraceuticals, Immuno-oncology and new disease management. Most of these initiatives from financials perspective will be visible over next 3-5 years. Our FY23E/FY24E estimates remain unchanged. We continue to expect steady earnings momentum and pick up in US generic business along with cost optimization. Also, strong pipeline/new launches will drive steady growth in India and RoW markets.



Outlook


We expect 13% EPS CAGR over FY22-24E (ex of Revlimid) and maintain our ‘Buy’ rating with TP of Rs4,900/share. At CMP, DRRD is trading at 19x P/E on FY24E adjusted for gRevlimid.

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At 13:11 hrs Dr Reddys Laboratories was quoting at Rs 4,230.00, down Rs 41.05, or 0.96 percent.

It has touched an intraday high of Rs 4,345.85 and an intraday low of Rs 4,164.00.

It was trading with volumes of 13,857 shares, compared to its thirty day average of 17,478 shares, a decrease of -20.72 percent.

In the previous trading session, the share closed up 2.84 percent or Rs 118.15 at Rs 4,271.05.

The share touched its 52-week high Rs 5,613.65 and 52-week low Rs 3,655.00 on 07 July, 2021 and 04 March, 2022, respectively.

Currently, it is trading 24.65 percent below its 52-week high and 15.73 percent above its 52-week low.

Market capitalisation stands at Rs 70,398.13 crore.

For all recommendations report, click here


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first published: Jun 22, 2022 01:13 pm
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