Dr Reddy's Share Price Rises As Analysts Upgrade Rating, Hike Target Price
Systematix upgraded the stock rating to 'hold' and hiked target price to Rs 1,414 apiece, while Dolat Capital upgraded rating to 'accumulate' and hiked target price to Rs 1,508 from Rs 1,380.
(Source: Dr Reddy's Laboratories/X)
Dr. Reddy's Laboratories Ltd.'s share price rose over 3% on Wednesday after brokerages upgraded ratings and hiked target price on the company following the release of its second-quarter results.
The slight outperformance in topline of Dr. Reddy's Laboratories was due to growth in generic business in India and North America, Systematix said in a note. The domestic growth was driven by licensed vaccine portfolio from Sanofi, new launches, and price increase.
Systematix upgraded the stock's rating to 'hold' and hiked the target price to Rs 1,414 apiece, implying an upside of 1.11% from Tuesday's closing price.
Dolat Capital Research also upgraded the rating to 'accumulate' from 'reduce' and hiked the target price to Rs 1,508 from Rs 1,380, implying an upside of 18.53% from Tuesday's closing price.
Dr. Reddy's Laboratories reported better sales than Dolat Capital Research's estimates, while profit margin came largely in line with estimates.
However, the brokerage cuts earning per share estimates for financial year 2025 by 3.9% on lower operating profit and higher amortisation expense, the brokerage said in a note.
However, Nuvama maintained 'reduce' rating on Dr. Reddy's Laboratories and cut the target price to Rs 1,215 from Rs 1,247 apiece, implying a downside of 4.7% from Tuesday's closing price.
Dr Reddy's Q2 Results: Key Highlights (Consolidated, YoY)
Revenue up 16.45% at Rs 8,038 crore. (Bloomberg estimate: Rs 7,717 crore).
Ebitda up 3.48% at Rs 2,077 crore. (Bloomberg estimate: Rs 2,159 crore).
Ebitda margin down 323 bps at 25.83%. (Bloomberg estimate: 28%).
Net profit down 9.44% at Rs 1,342 crore. (Bloomberg estimate: Rs 1,427 crore).
Board approved investment worth up to Rs 600 crore in Russia-based step-down arm.
Share price of Dr. Reddy's Laboratories rose 3.48% to Rs 1,316.45 apiece, the highest level since Oct. 29. It was trading 3.47% higher at 1,315.40 as of 10:51 a.m., compared to 0.37% advance in the NSE Nifty 50 index.
The stock gained 22.14% in 12 months and 12.59% on a year-to-date basis. Total traded volume so far in the day stood at 5.3 times its 30-day average. The relative strength index was at 49.1.
Out of 40 analysts tracking the company, 13 maintain a 'buy' rating, 12 recommend a 'hold,' and 15 suggest a 'sell', according to Bloomberg data. The average 12-month consensus price target implies an upside/downside of 3.6%
