Dr. Reddy's Laboratories Ltd. share price target

The Cost synergies from Wockhardt acquisition and strong product pipeline should help improve margins in the long term. Biosimilar products and cell therapies (for oncology patients) are expected to act as long-term growth catalysts for the company. Hence, we reiterate our...

Europe was partly offset by decline in North America Generics (NAG). Pharmaceutical Services and Active Ingredients (PSAI) segment revenue rose 10% to Rs 791.50 crore in Q4 FY21 over Q4 FY20....

Therefore, we recommend Buy with a revised target price of INR 5,700.

Dr Reddy's Labs (DRRD) delivered a marginally lower-than-expected performance in 4QFY21, led by (a) weak US sales, (b) moderation in YoY growth in the India business, and (c) currency headwinds in Russia. DRRD is progressing well with building a preventive/curative COVID portfolio and gearing up for niche launches over the near-to-medium term. We raise our EPS estimate by 5%/6% for FY22/FY23E and continue to value DRRD at a P/E multiple of 25x, factoring in (a) improved visibility on the commercialization of limited-competition products in North America (NAM),...

US remains a key driver, contributing ~37% to revenues as of FY21. DRL has a strong pending pipeline comprising 92 ANDAs (47 Para IV filings, 23 FTFs) and three NDAs under 505 (b) (2) route. We expect US sales to grow...

We marginally reduce our estimate by 1-2% for FY22E-23E, due to delay in launch of key molecules (gCopaxone, gVascepa and gNuvaring) along with increased overhead costs, higher freight costs and key clinical trials. DRRD recently received another CRL for gCopaxone, which would delay the launch by 4-6months, while new generic launches in gVescepa (by Hikma) and...

The Sputnik-V vaccine has been given Emergency Use Authorization by the Indian govt. The vaccine has a proven efficacy rate of 91.5 percent, which is the highest after the candidates of Moderna Inc and Pfizer-BioNTech. The cost of Sputnik V could be in the range of $3.5 per dose.

IPM is struggling for growth above 10% even after MoM abating COVID concerns and with MRs, physician activities almost reaching pre-COVID level. We believe key reasons for growth below par are (i) subdued new prescription (Rx) leading to volume de-growth (ii) digital marketing yield going south and (iii) sustained lower demand of acute products. Cardiac and anti-diabetic growth takes a breather in Jan-21 at 8.8% and 5.3% after reporting double digit growth in most months during lockdown. While amongst top therapies Gastro and VMN reported double digit growth of 14%...

The drug maker's consolidated revenue increased 12% year on year to Rs 4930 crore in Q3 FY21. Dr. Reddy's registered a profit before tax of Rs 284.3 crore in Q3 FY21 compared with pretax loss of Rs 527.40 crore posted in the same period last year. Tax expense surged to Rs 264.5 crore in Q3 FY21 as against Rs 42.30 crore in Q3 FY20. The company reported impairment charge of about Rs 600 crore during the quarter. In January 2021 there has been an additional generic launch for the product Nuvaring, which has led to...