Hold Dr Reddy’s Laboratories; target of Rs 2610: ICICI Direct

ICICI Direct's research report on Dr Reddy’s Laboratories

US business grew 15% to Rs 6360 crore over FY12-17 mainly driven by new launches. US remains a key driver for the company, contributing 45% to total revenues. Current US pending pipeline comprises 101 pending approvals (62 Para IV filings and 21 FTFs) including two NDAs. The company has developed a knack for exclusivity/FTF launches on a fairly continuous basis in US.

Outlook

Apart from US, Global Generics (ex US, Europe) growth is expected to recover on the back of stabilise currency, geographical expansion, robust biosimilar portfolio and ramp up in institutional business. We have ascribed a target price of Rs 2610 based on 19x FY19E EPS of Rs 137.