Dr. Reddy's Laboratories Ltd. share price target

Operating performance significantly below estimates: Dr. Reddy’s Laboratories (DRRD) reported weak 1QFY17 sales of INR32.3b (down ~14% YoY, 17% below estimates) with EBITDA margin of 11.7% (v/s 26.2% in 1QFY16 and MOSL estimate of 21.5%). This significant miss can largely be attributed to: 1) decline in the US, EM and PSAI sales, 2) higher remediation cost and 3) cost related to the launch of 505 (b)(2) products.Motilal Oswal maintain Neutral with a TP of INR3,000 @ 18x FY18E PER (v/s INR3,200 @18x FY18E PER)

Trendlyne has 24 reports on DRREDDY updated in the last year from 7 brokers with an average target of Rs 3339.2. Brokers have a rating for DRREDDY with 1 downgrade,6 price downgrades,1 upgrade,2 price upgrades in past 6 months and 3 downgrades,8 price downgrades,2 upgrades,8 price upgrades in past 1 Year.

USFDA resolution is a key for US business Dr. Reddy's Laboratories (DRL) has reported disappointing performance in Q1FY17 numbers, with its sales, operating income and PAT declining by 14%, /61% & 77% to Rs32.2bn, Rs 3.9bn & Rs 1.7bn, respectively. US sales dipped by 16% yoy to US$230mn due to pricing pressure on account of increased competition in its key molecules i.e. gValcyte & gVidaza and consequent loss of market share. DRL's RoW (Rest of the World) business dipped 53% yoy due to decline in sales in Venezuela. India business reported subdued 10% yoy growth led by new pricing policy and WPI-based annual price decline....

DRRD launched gZegerid under a limited competition; in FY17/18 we estimate it to add incremental revenue and PAT of US$ 33/35mn and US$ 15/16mn, implying incremental earnings of 4.1%/3.5%. Ahead, limited competition opportunities (gGleevec – US$ 2bn, Aloxi NDA – US$ 416mn, and Proposfol – US$ 350mn) in H2 could positively surprise our FY17 US sales estimates of US$ 1.14bn (vs. US$ 1.16bn in FY16). While we considered the gZegerid approval as part of DRRD guidance (i.e. more ANDA approval in FY17 than FY16) and our estimates, factoring the effect of recent buyback of 5.08mn equity shares, we raise our FY17/18 EPS estimates by 3% to Rs 156/185. Keeping the target valuation multiple intact, we value DRRD at Rs 3700, i.e 20x FY18 EPS (vs. Rs 3600 earlier). Additionally, we expect a rerating led by its plant clearance in the near future.Keeping the target valuation multiple intact, Phillip Capital value DRRD at Rs 3,700 (20x FY18 EPS) vs. Rs 3,600 earlier.

Trendlyne has 21 reports on DRREDDY updated in the last year from 7 brokers with an average target of Rs 3647.5. Brokers have a rating for DRREDDY with 3 price downgrades,2 price upgrades,1 upgrade in past 6 months and 2 downgrades,5 price downgrades,2 upgrades and 8 price upgrades in past 1 Year.

Dr. Reddy's announced that it has entered into a definitive agreement with Teva to acquire a portfolio of 8 ANDAs in the US for USD350m. Teva is divesting the portfolio as a pre-condition to close the Allergan deal (due to overlap). The...

For 4QFY2016, Dr Reddy's Laboratories (DRL) posted results much lower than our estimates. The company posted a 3.0% yoy de-growth in sales to Rs3,756cr V/s Rs4,500cr expected and V/s Rs3,870cr in 4QFY2015. The sales dip mainly happened on account of flat global generics and a 22% dip in the PSAI segment. On the operating front, the EBIT m..

ICICI Securities Ltd | Retail Equity Research Revenues de-grew 3% YoY to | 3756.2 crore (I-direct estimate: | 3913.2 crore) on the back of Venezuela dent, delayed European...

Key highlights: Sales were below expectations on account of weakEurope, PSAI andIndia sales.TheUSsalesatUS$286mn(+10%yoy)wasinlineourestimatedofUS$290mn.There was 300bps negative surprise in EBITDA margin at 21.6% due to lower gross margin and...

Background: Dr. Reddy's is a global generic pharmaceutical company with focus on the US, Europe, Russia and India. Finished dosage and API account for a bulk of the revenues, with up to 60% of sales derived from overseas operations. With a strong research pipeline, its R&D; is focused in the areas of cancer, diabetes, cardiovascular, inflammation and bacterial infections. Dr. Reddy's offers a portfolio of products and services including APIs, custom pharmaceutical services, generics, biosimilars, differentiated formulations and NCEs. It has one of the largest ANDA & a patent challenge pipeline has strengthened presence through the launch of several...

Background: Dr. Reddy's is a global generic pharmaceutical company with focus on the US, Europe, Russia and India. Finished dosage and API account for a bulk of the revenues, with up to 60% of sales derived from overseas operations. With a strong research pipeline, its R&D; is focused in the areas of cancer, diabetes, cardiovascular, inflammation and bacterial infections. Dr. Reddy's offers a portfolio of products and services including APIs, custom pharmaceutical services, generics, biosimilars, differentiated formulations and NCEs. It has one of the largest ANDA & a patent challenge pipeline has strengthened presence through the launch of several...

Dr Reddys reported flat QoQ sales in 3QFY16. EBITDA margins saw a sequential decline of 242bps because of the ongoing remediation measures. Settlement charges of US$ 5.5mn related to Reclast and forex loss of Rs 637mn in Venezuela hit reported net profit (down 20% QoQ, flat YoY).