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Dr Reddy's Laboratories Ltd. (DRL) | Q1FY14 Result Update




IndiaNivesh Securities Pvt Ltd


31 Jul 2013





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Dr Reddy's Laboratories Ltd. (DRL) | Q1FY14 Result Update Disappointing set of numbers Disappointment was from across the geographies and segments: During the quarter, DRL revenue grew 12% y-o-y (declined 15%q-o-q) to Rs 28.45 billion in Q1 FY14 (V/s INSPL est= Rs 30.77 billion). Almost all the geographies & business segments reported muted numbers except North America business, which grew 37.3% y-o-y linked with limited competition launches in the last 3-4 quarters, significant market share gain in Tacrolimus & Fondaparinux and two new launches (i.e Zoledronic acid & Lamotrigine XL) during the quarter. Valuations: At CMP of Rs 2179, the stock is trading at P/E multiple of 22.6x of FY14E & 20x of FY15E earnings estimates. Earlier we had buy recommendation on the stock with the target price of Rs 2,205, which has been achieved. We value stock at P/E multiple of 19x of FY15E earnings estimates and arrive at the target price of Rs 2059, (earlier target price was Rs 2,205) and maintain HOLD rating.

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