Prabhudas Lilladher's research report on Dr. Reddy's Laboratories
DRRD continues to be one of the best companies in large cap pharma space structurally, though there is limited headroom for further upgrade in earnings estimate and PE expansion. However re-rating in near-term could be possible with 1) early launch of Nuvaring and Copaxone 2) sustainable growth of PSAI sales 3) India formulations growing above 15% and 4 )favorable hearing on gRevlimid.
Outlook
We downgrade DRRD to HOLD (earlier Accumulate) due to limited upside potential at current valuation. We retain our earnings estimates and TP of Rs4,326 (PE 24x FY22E).
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