Brokerage firms maintained their rating on Dr Reddy’s Laboratories after the company reported a 45 percent year-on-year growth in net profit to Rs 662 crore for the June quarter.
The rise in net profit was due to a one-off receipt of Rs 350 crore from Celgene, under settlement agreement related to Revlimid brand capsules in Canada.
Revenues grew 3 percent YoY at Rs 3,843.4 crore. The company said growth was led by a contribution from new products and an increase in volumes, but was partly offset by price erosion and adverse foreign exchange movement.
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Reacting to the results, most brokerage firms maintained their rating. The most aggressive target price of Rs 3,330 was put out by CLSA which translates into an upside of 26 percent from July 29’s close of Rs 2,652.
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CLSA maintained its buy rating on Dr Reddy’s and also stressed on the fact that the company is on track to deliver on its realigned strategy.
The US ramp-up should continue on the back of 30 new launches. India, as well as emerging markets, are witnessing improved traction which is a positive sign. The global investment bank increased the FY20 EPS estimate by 26 percent.
Here’s what other global brokerage firms recommended for Dr Reddy’s post Q1 results:
BofAML: Buy | Target: Rs 3,052 | Upside: 15 percent
BofA-ML maintained its buy rating on the stock post-June quarter with a target price of Rs 3,052. The global investment bank sees good momentum in base markets like India, Russia, and Pharmaceutical Services and Active Ingredients (PSAI) business.
Nomura: Buy | Target: Rs 3285 | Upside: 24 percent
Nomura maintained its buy rating on Dr Reddy’s post-June quarter results with a target of Rs 3,285. Total revenues grew by 3 percent on a YoY basis which was ahead of estimates. The reported PAT was also ahead of Nomura estimates.
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tags #Buzzing Stocks #Dr Reddys Laboratories
