Dr. Reddy's Laboratories share price today is Rs 4918, up Rs 159 or 3.3%. Dr. Reddy’s Laboratories share price has moved by over Rs 300 in the past 1 week. The Pharma sector is a good defensive bet in a falling market. It is expected that Pharma stocks will see good buying in Q1 FY22 as the Revenue generated will beat the expectations of the analysts. In today’s session, Dr. Reddy’s Laboratories is the 2nd top gainer on Nifty. The Pharma companies shares are seeing good buying in the market today.

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Technical Analysis on Dr. Reddy’s Laboratories:

Technical Analyst, Simi Bhaumik says that the Pharma sector will remain in focus and will see buying till the market remains weak on increasing Covid fears. The stock can see a target of Rs 5200 – Rs 5250 from here on and stop-loss can be Rs 4850.

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Edelweiss expects Dr. Reddy’s topline to increase 7% YoY driven by Ex-US exports and Wockhardt portfolio. Expect US revenue (USD238mn) to increase mere 2% QoQ, on no meaningful launches and gDoxil competition. Edelweiss expects India to grow at 33%YoY, as a result of integration of acquired Wockhardt portfolio and on base impacted by logistic disruptions. Adjusted for these, expect India to grow 5% YoY. They Expect EBITDA margins to increase mere 70bps YoY to 21.9% as costs gradually increase and integration of Wockhardt costs.

Haitong Securities says that US sales likely remain flat YoY while the increase in domestic & EU contribution should keep EBITDA margins at 22%. Overall, Dr. Reddy’s Laboratories should report decent numbers in Q4 FY21.

Dr. Reddy’s Laboratories View and Valuation:

Haitong Securities expects the stock to re-rate as visibility on earnings increases. They increase target price to Rs 6800/sh (Rs 6450 previously) on base case earnings plus Rs 246/sh option value for Revlimid (unchanged). Maintain Outperform rating.

Dr. Reddy’s Laboratories Key Risks:

Haitong Securities highlights that Delay in drug launches, unfavorable outcomes from FDA inspections, higher the expected price erosion in US business are the key risks for Dr.Reddy’s going forward.