Buy Dr. Reddy’s Laboratories; target of Rs 5460: Sharekhan

Sharekhan's research report on Dr. Reddy’s Laboratories

Additionally, some of its existing products such as gVascepa and gSuboxone are proving to be the market leaders in the US, in each of the product categories, reinforcing our belief in its US segment’s growth outlook. The company has 11-12 biosimilar products under trial. Tocilizumab biosimilar has recently completed stage I study successfully. Overall products in the US comprise 40% injectables and 15% complex products, which are high-value products. This should continue to drive US’s profitable sales growth, partially offset by increased competition in injectables. As the company expects to launch 15-20 new products in the domestic market with a focus on 10 therapies, including anti-diabetic, oncology, cardiovascular (CVS), and gastrointestinal, India market should perform well in the short-medium term.

Outlook

We maintain our rating on Dr. Reddy’s at Buy with a price target of Rs. 5,460, as we believe strong earnings growth prospects are intact for the company with equally strong market share gains visible in its newly launched blockbuster but limited quantity generic of Revlimid or Lenalidomide capsules in the US.

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Dr. Reddy’s Laboratories - 22 -12-2022 - share