Sharekhan's research report on Dr. Reddy’s Laboratories
Dr. Reddy’s Laboratories’ (DRL’s) Q1FY23 operating performance reflected high cost pressures that dragged down adjusted operating margins. Results missed estimates and reflected several one-time items. Higher costs and elevated competitive pressures in the US are near-term challenges for DRL, but a strong new product pipeline and growth in base business could help tide over pricing pressures, to certain extent. Expected healthy growth in India business, gradual pick up in the PSAI segment and strong product pipeline in the US including limited competition / FTF products, are key positives.
Outlook
We retain our Buy recommendation on the stock with a revised PT of Rs 5,000.
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