Add Dr. Reddy's Laboratories, target price Rs 5848: ICICI Securities

ICICI Securities has add call on Dr. Reddy's Laboratories with a target price of Rs 5848. The current market price of Dr. Reddy's Laboratories Ltd. is Rs 5385. Time period given by analyst is one year when Dr. Reddy's Laboratories Ltd. price can reach defined target.

Dr. Reddy's Laboratories Ltd., incorporated in the year 1984, is a Large Cap company (having a market cap of Rs 88294.31 Crore) operating in Pharmaceuticals sector.

Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 4850.80 Crore, down -3.22 % from last quarter Total Income of Rs 5012.40 Crore and up 7.26 % from last year same quarter Total Income of Rs 4522.50 Crore. Company reported net profit after tax of Rs 539.40 Crore in latest quarter.


Investment Rationale
The brokerage remains positive on the stock considering the growth momentum in branded generics business (India & EMs) and new launches in US to continue supporting growth. DRL has launched Sputnik V vaccine in India which would provide significant upside to earnings in near term. The brokerage maintains ADD rating on the stock with a target price of Rs 5,848/share based on 25xFY23E EPS, an additional Rs330/share for Revlimid and NPV of Rs144 for Sputnik V vaccine. Key downside risks: delay in launching new products, regulatory hurdles and currency volatility.

Promoter/FII Holdings
Promoters held 26.7 per cent stake in the company as of March 31, 2021, while FIIs held 14.3 per cent, DIIs 15.9 per cent and public and others 29.3 per cent.