Prabhudas Lilladher's research report on Dr. Reddy's Laboratories
Dr Reddy’s (DRRD) Q4FY22 US and India revenues were healthy. 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.
We expect 13% EPS CAGR over FY22-24E (ex of Revlimid) and broadly maintain our estimates at ‘Buy’ rating with revised TP of Rs4,900/share. At CMP, DRRD is trading at 17.5x P/E on FY24E adjusted for gRevlimid. We assign 22x (23x earlier) 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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