While DRL is hit by pricing erosion in the US business, potential growth in the limited competition products underlines a positive outlook
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PRO Only Highlights
– Quarterly performance largely backed by improved realisations
– Medium-term triggers China plus and protectionist measures for tyre industry
– Valuations not inexpensive; but improved medium-term outlook
Dr Reddy’s Laboratories (CMP: Rs 4,659; Market Cap: Rs 77,529 crore) continues to be under pressure due to the price erosion in the US market. However, strong growth in emerging markets (EMs), a steady traction in Europe and higher product filings in China hold out hope of healthy growth. India/EMs help offset pricing weakness Dr Reddy’s Q2FY22 sales grew by 18 percent year-on-year (YoY), aided by India, EMs and Europe, which together constitute 50 percent of business. This was partially…
