Neutral Dr. Reddy's Laboratories Ltd. target Rs 2890 : Goldman Sachs

Neutral Dr. Reddy's Laboratories Ltd. at a price target of Rs 2890. orecast EBITDA margins of 23% in FY18, up 470bps YoY. Expect sales growth to normalise to 12% in FY18.

By ETMarkets.com | Updated: Feb 06, 2017, 01.08 PM IST

Goldman Sachs has a neutral call on Dr. Reddy's Laboratories Ltd. with a target price of Rs 2890.The current market price of Dr. Reddy's Laboratories Ltd. is Rs 3097 Time period given by analyst is year when Dr. Reddy's Laboratories Ltd. price can reach defined target.
Cost control initiatives at both COGS and SG&A level aided profitability of Dr Reddy's. The company flagged softer 4Q due to approval delays, notably gGleevec Uncertainty remains around key products gAloxi (litigation), gCopaxone (rework). Forecast EBITDA margins of 23% in FY18, up 470bps YoY. Expect sales growth to normalise to 12% in FY18. Believe FY18E valuation of 25x PE/14.5x EV/EBITDA-at 15% premium factors in US recovery

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