Sharekhan has given Buy recommendation for Dr Reddy’s Laboratories with a target price of Rs. 6500 in its research report issued on Jan 29, 2021

Sharekhan’s research report on Dr Reddy’s Laboratories

Q3 FY2021 earnings missed estimates, but revenue growth of 12% yoy at Rs 4941 cr were in line with estimates, attributable to 34% growth in the European markets and a strong growth of 26% in the Indian markets. A mix of cost-control as well as productivity improvement measures, synergies through partnerships, strong execution and product-specific opportunities are key growth drivers for DRL. Successful completion of trials and regulatory approval for Sputnik-V (COVID vaccine) would offer substantial growth opportunities ahead.

Outlook

We retain our Buy recommendation on DRL (Dr Reddy’s Laboratories Limited) with an unchanged PT of Rs. 6500, given its improving growth prospects, healthy balance sheet and strong return ratios.

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