Neutral Dr Reddy's Laboratories, target Rs 3200: Motilal Oswal

Motilal Oswal maintains a neutral rating on Dr Reddy's Laboratories with a 12-month target price of Rs 3200. 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 acquisition of these ANDAs is contingent upon the closing of the Teva/Allergan deal and an approval by the US FTC.

"We believe the speed at which DRRD is able to resolve regulatory issues with the FDA holds the key (FY18, in our view)," said the report. Although long-term fundamentals remain intact, the stock should trade range-bound in the near term due to competition in key products and regulatory concerns.