However, apart from this Dr Reddy’s has been gaining favourable recommendation from analysts on the street. Earlier this week, HDFC Securities upgraded the stock from ‘Reduce’ to ‘Add’ with a target price of Rs 4,670 which the stock has already crossed. The firm has also seen improvements in growth prospects in the United States market. “Limited competition products such as gCiprodex, gVoltaren OTC (launched), gKuvan (settled for Oct-20 launch), gVascepa (launch likely towards end FY21) adds good growth visibility to the US revenues,” HDFC Securities said.
The brokerage firm values Dr Reddy’s at 22x FY22 EPS (from 20x earlier) to factor increased visibility of niche launches in the US and improved outlook for API business. Key risks aligned with the stock include delay in key approvals, higher price erosion in the US, adverse outcome on drug price fixing lawsuit in US, and delay in turnaround of Wockhardt portfolio.
ICICI Direct, on the other hand has a target price of Rs 5,150 per share based on its ‘Three factor model for stocks filtration’. “The stock has shown significant resilience in intermediate market corrections and no major delivery based selling was seen. The price distribution is also suggesting limited downside movements in the stock. The lowest reading for stock is in the -2% to -3% range,” ICICI Direct said. Financial Express