Dr Reddy's Labs Jumps; CLSA Says Shares May Double In 3 Years

Dr Reddy's Labs shares jumped as much as 3 per cent today amid huge volumes. As of 12.38 p.m., 25,000 shares had changed hands as against its 2-week average of 18,000 shares. 

Global brokerage CLSA says Dr Reddy's Labs shares may double in three years. The brokerage expects re-rating to happen in the stock as earnings of India's second biggest pharma company recovers and US regulatory issues are resolved. 

The brokerage has a "buy" rating on Dr Reddy's Labs with a target price of Rs 3,735, indicating a potential upside of 22 per cent from Tuesday's closing price. However, the brokerage warned that Dr Reddy's earnings growth is likely to be weak in the first half of the current fiscal. 

Dr Reddy's Labs shares have been under pressure since last November after three of its facilities received warning letter from the US drug regulator. It shares are down nearly 28 per cent from November levels.

Dr Reddy's shares closed 1.84 per cent higher at Rs 3,105.10 compared to 0.20 per cent fall in the broader Nifty.