Dr. Reddy's Laboratories Ltd. share price target

Cipla: Owing to competition, we expect Cipla to garner 1-7% market share for volume-limited period and 15% thereafter. Hence, with above market share and a 70-90% price erosion assumption, our gRevlimid NPV arrives at | 41. We maintain BUY rating and arrive at a target price of | 965, including...

Dr Reddys Labs reported on weak Q2 outcome, misses estimates Consolidated total income jumped 2% to Rs 4910.90 crore in Q2 September 2020 as against Rs 4812.80 crore in Q2 September 2019. Profit before tax (PBT) jumped 12.48% to Rs 862.10 crore in Q2 September 2020 as against Rs 766.40 crore in Q2 September 2019. Tax expense for...

We recommend a BUY on Dr. Ready's Laboratories Ltd with a Target Price of Rs 5,280, an upside of 8% from CMP of Rs 4,890 and Stop Loss Rs 4,600.

EBITDA rose 10.1% QoQ (-13.1% YoY), despite margin contracting 20bps QoQ (-440bps YoY) to 25.1%, impacted by forex losses, higher staff costs. Subsequently, net profit rose 29.8% QoQ (-30.3% YoY) to Rs....

Q2 revenues grew 2.0% YoY to | 4911 crore (I-direct estimate: | 4564 crore) mainly due to strong growth across segments partly offset by high base effect in Q2FY20 (divestiture of certain proprietary products). US revenues grew 28.5% YoY to | 1833 crore on the back of rupee depreciation and new product launches. Domestic revenues grew 21.5% YoY to | 912 crore due to Wockhardt integration and Covid products. Europe revenues grew 35.8% YoY to | 375 crore due to new launches and currency tailwinds. PSAI segment posted a robust 19.7% YoY growth to | 851 crore. EBITDA margins...

We expect Consol Revenue amd Consol PAT CAGR 10.9% and 22.1% respectively over the period FY20-FY23E. Therfore, we recommend BUY Target Price INR 6,200 for DRRD (PE multiple of 28x to FY23E earnings).

Dr Reddy's (DRRD) reported a Q2 EBITDA beat of 13% led by better operating leverage across markets.

Dr Reddy's reported a decent 2Q with strong performance in India (Wockhardt portfolio integration and COVID products) and US (new launches). However, lower export incentive, higher price erosion, change in product mix and adverse currency impacted gross margins (54% in 2Q vs 56% in 1Q), in line with estimates. Adjusting for the impairment charge of Rs781mn for intangibles, EBITDA margins came in line at 24.3%. Further, lower tax rate (deferred tax benefit) aided profitability at Rs7.6bn (vs our estimate of Rs5.7bn)....