{Ticker : 500124 { BUY: ₹2602 { Tar­get: ₹2860

Flash News Investment - - RECOMMENDATIONS -

Dr Reddy's Lab (DRL) is one of In­dia’s lead­ing play­ers in pharma and gener­ics busi­ness, hav­ing a firm root­ing in the US and other ex­port mar­kets. In Q2FY19, the com­pany’s rev­enue was up by 7.2 per­cent YoY with 26.8 per­cent YoY growth from Rus­sia and other CIS and 63.7 per­cent YoY growth from RoW sales. EBITDA grew by 13.4 per­cent YoY and EBITDA mar­gin stood at 19.9 per­cent. PAT for the quar­ter jumped by 71.2 per­cent YoY to Rs 507 crore from Rs 296 crore. Dur­ing H2FY19, the man­age­ment plans to launch 10-15 new prod­ucts. Re­cently, the US Court of Ap­peals lifted tem­po­rary ban on its generic Subox­one film, which will help it gen­er­ate USD 60 mil­lion in FY19. The R&D spend in FY19 is ex­pected to be 12-13 per­cent of sales. Con­sid­er­ing these fac­tors, we rec­om­mend it as a BUY.

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