Hold Dr. Reddy's Laboratories; target of Rs 2620: Edelweiss

Edelweiss' research report on Dr. Reddy's Laboratories

Dr Reddy’s (DRRD) faces a number of challenges ahead. Not only has the near term outlook turned negative owing to recent developments, the long term outlook remains uncertain.

Outlook

As per our discussions with other filers, a number of developments need to align for successful monetization of gCopaxone and gNuvaring (26% of FY19E EPS). We cut FY18E and FY19E EPS 22% and 17%, respectively. Maintain ‘HOLD’ with a target price of INR 2,620 (18x FY19E EPS).