Shares of Dr. Reddy’s Laboratories Limited surged by 2.88% to ₹1,390.50 in early trading today after Nuvama Research upgraded the stock to a ‘Buy’ from ‘Reduce,’ citing proactive measures by the company to mitigate risks associated with the upcoming Revlimid patent expiry in 2026.
Key Insights from Nuvama’s Report:
- Revlimid Dependency: The patent expiry of Revlimid, which contributes approximately 40% to Dr. Reddy’s FY24 EBITDA, poses a substantial risk to earnings growth.
- Proactive Mitigation: Management has outlined strategies to offset the revenue and EBITDA losses through key asset launches, including:
- Semaglutide in Canada
- Abatacept biosimilar in the US
- Mitigation Impact: Nuvama estimates that Dr. Reddy’s proactive measures will cover about 80% of the anticipated EBITDA impact.
- Valuation: The stock has been valued at 24x FY27E EPS, yielding a target price of ₹1,553, representing significant upside potential.
- Risks: Potential delays in product approvals could pose challenges.
Dr. Reddy’s Laboratories Share Price history
| Day | Open | Close | Change % |
|---|---|---|---|
|
Tue, Jan 7 2025
|
₹1,352.00
|
₹1,351.55
|
|
|
Mon, Jan 6 2025
|
₹1,360.40
|
₹1,350.35
|
-0.17%
|
|
Fri, Jan 3 2025
|
₹1,375.05
|
₹1,352.65
|
-1.63%
|
|
Thu, Jan 2 2025
|
₹1,371.45
|
₹1,375.05
|
|
|
Wed, Jan 1 2025
|
₹1,388.45
|
₹1,369.00
|
-1.40%
|
|
Tue, Dec 31 2024
|
₹1,370.30
|
₹1,388.50
|
|
|
Mon, Dec 30 2024
|
₹1,389.60
|
₹1,376.90
|
-0.90%
|
|
Fri, Dec 27 2024
|
₹1,363.05
|
₹1,389.45
|
|
TOPICS:
Dr Reddy's