Sharekhan has given Buy recommendation for Dr. Reddy’s Laboratories with a target price of Rs. 5550 in its research report issued on May 19, 2022

Sharekhan’s research report on Dr. Reddy’s Laboratories

Q4FY22 was a strong quarter, adjusting for one off impairment charges. The revenues as well as adjusted PAT staged a double digit growth. Strong product pipeline, growth in base business to enable DRL tide over pricing pressures in the US and drive up sales in the region. Healthy growth prospects exist for India business backed by growth in the existing portfolio, new product launches and price hikes. Management commentary too remains optimistic over the long term, though high -cost pressures could be near-term concerns. DRL has retained its EBITDA margins guidance of 25% by 2025.

Outlook

We retain our Buy recommendation on Dr Reddys Laboratories (DRL) with an unchanged price target (PT) of Rs. 5,550.

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