Neutral on Dr Reddy's Lab, target Rs 2275: Motilal Oswal Securities

Motilal Oswal Securities has a neutral call on Dr Reddy's Laboratories Ltd. with a target price of Rs 2275. The current market price of Dr. Reddy's Laboratories Ltd. is Rs 2416.5 Time period given by analyst is year when Dr. Reddy's Laboratories Ltd. price can reach defined target. . Dr. Reddy's Laboratories Ltd., incorporated in 1984, is a largecap company with a market cap of Rs 39505.78 crore.

Investment rationale by Motilal Oswal

Although the approval of gSuboxone is positive news for DRRD, the recent run-up in the stock already factors in this event. We maintain Neutral rating on the stock with a target price of INR2,275 @18x FY20E PER (v/s INR2,000 @18x FY20 PER). We have increased our EPS for FY19/20E by 16/14% as we build in the impact of earlylaunch of Suboxone (earlier assumption of launch by 4QFY19E).