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Dr Reddy’s Outlook: 11% fall so far this year

Dr Reddy’s Outlook: Dr Reddy’s shares have broken 11 percent so far in 2022 this year, but experts believe that there is a possibility of 28 percent increase in it.

Dr Reddy’s Outlook: The shares of the legendary pharma company Dr Reddy’s have lost 11 percent so far in 2022 this year. Geopolitical stress in the near term may affect the company’s Russian performance, but despite this, brokerage firm Sharekhan is bullish on this stock and has retained its buy rating. The domestic brokerage firm believes that its prices may strengthen up to 28 per cent on the back of strong product pipeline and double digit growth. According to a Sharekhan analyst, the company faces challenges such as higher costs and competition in the US in the near term, but a positive trend is showing due to better opportunities in the Indian business and expectations of the Pharmaceutical Services and Active Ingredients (PSAI) segment.

Dr Reddy’s: Buy
Target Price: Rs 5,550

Sharekhan has retained the buy rating of Dr Reddy’s and has fixed the target price for investing in it at Rs 5550 i.e. about 28 percent more than the current price. Talking about the risk of investing in this, according to analysts, Dr Reddy is facing constant pricing pressure in the US business. At the same time, due to delay in product approval, US sales may slow down in the near term. Apart from this, the performance of the company is expected to be weak in the January-March 2022 quarter due to cost pressure. There is also a risk of adverse development on the regulatory front regarding investment in Dr Reddy’s such that if the results of the investigation come out to the contrary, then the earnings may be affected.

Falling prices after the approval of NCLT

Dr Reddy’s shares have weakened 11.36 percent this year and are currently at a price of Rs 4302 on NSE. Last month, it had slipped to a 52-week low. On March 4, 2022, it was at a 52-week low of Rs 3654. On the other hand, if we talk about the record level of one year, last year it was at a price of Rs 5614.60 on 7 July 2021. Last week on April 8, it was at a price of Rs 4430.35 and was rising but after the approval of the NCLT to merge the promoter group’s Dr Reddy’s Holdings with Dr Reddy’s Lab, its prices have been falling. Dr Reddy’s Holdings holds 24.83 per cent equity stake in Dr Reddy’s Laboratories.

(The stock recommendations given in the story are those of the respective research analyst and brokerage firm. Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.)

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