AgenciesNomura has buy call on Dr. Reddy's Laboratories with a target price of Rs 5161. The current market price of Dr. Reddy's Laboratories is Rs 4683.
Dr. Reddy's Laboratories, incorporated in the year 1984, is a Large Cap company (having a market cap of Rs 77911.73 crore) operating in Pharmaceuticals sector.
Dr. Reddy's Laboratories key Products/Revenue Segments include Pharmaceuticals, Licence Fees, Other Operating Revenue, Spent Chemicals, Service Income and Scrap for the year ending 31-Mar-2022.
Investment Rationale
"We think the growth risk to the branded generics business cannot be ruled out. Market data already suggest a slowdown in volume growth. This is primarily due to loss of share to generics, in our view. The trend could accelerate as organised retail gains market share," said Nomura.
Currently, branded formulations’ growth is primarily dependent on price increases and some new product opportunities on the back of patent expiries. The market is currently ascribing high valuation multiples to the branded formulations business and is not factoring in potential disruptions. This may be unchanged in the near term, but sustained slow growth in the segment overtime can lead to lower valuations, it added.
Financials
For the quarter ended 31-03-2023, the company has reported a Consolidated Total Income of Rs 6453.70 crore, down -5.76 % from last quarter Total Income of Rs 6848.50 crore and up 15.31 % from last year same quarter Total Income of Rs 5596.80 crore. Company has reported net profit after tax of Rs 952.50 crore in latest quarter.
The company’s top management includes Mr.K Satish Reddy, Mr.G V Prasad, Mr.Leo Puri, Mr.Prasad R Menon, Ms.Shikha Sharma, Mr.Allan Oberman, Ms.Kalpana Morparia, Mr.Sridar Iyengar, Mr.Arun Madhavan Kumar. Company has S R Batliboi & Associates LLP as its auditors. As on 31-03-2023, the company has a total of 17 crore shares outstanding.
Promoter/FII Holdings
Promoters held 26.7 per cent stake in the company as of 31-Mar-2023, while FIIs owned 27.25 per cent, DIIs 23.03 per cent.
Dr. Reddy's Laboratories, incorporated in the year 1984, is a Large Cap company (having a market cap of Rs 77911.73 crore) operating in Pharmaceuticals sector.
Dr. Reddy's Laboratories key Products/Revenue Segments include Pharmaceuticals, Licence Fees, Other Operating Revenue, Spent Chemicals, Service Income and Scrap for the year ending 31-Mar-2022.
Investment Rationale
"We think the growth risk to the branded generics business cannot be ruled out. Market data already suggest a slowdown in volume growth. This is primarily due to loss of share to generics, in our view. The trend could accelerate as organised retail gains market share," said Nomura.
Currently, branded formulations’ growth is primarily dependent on price increases and some new product opportunities on the back of patent expiries. The market is currently ascribing high valuation multiples to the branded formulations business and is not factoring in potential disruptions. This may be unchanged in the near term, but sustained slow growth in the segment overtime can lead to lower valuations, it added.
Financials
For the quarter ended 31-03-2023, the company has reported a Consolidated Total Income of Rs 6453.70 crore, down -5.76 % from last quarter Total Income of Rs 6848.50 crore and up 15.31 % from last year same quarter Total Income of Rs 5596.80 crore. Company has reported net profit after tax of Rs 952.50 crore in latest quarter.
The company’s top management includes Mr.K Satish Reddy, Mr.G V Prasad, Mr.Leo Puri, Mr.Prasad R Menon, Ms.Shikha Sharma, Mr.Allan Oberman, Ms.Kalpana Morparia, Mr.Sridar Iyengar, Mr.Arun Madhavan Kumar. Company has S R Batliboi & Associates LLP as its auditors. As on 31-03-2023, the company has a total of 17 crore shares outstanding.
Promoter/FII Holdings
Promoters held 26.7 per cent stake in the company as of 31-Mar-2023, while FIIs owned 27.25 per cent, DIIs 23.03 per cent.
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