Dr Reddy’s Laboratories share price jumped 1.86% today and made a new all-time high at Rs 5,318.75 after the United States Food & Drug Administration (USFDA) completed Pre-Approval Inspection (PAI) and a routine GMP inspection at the company’s API manufacturing facility in Srikakulam, Andhra Pradesh and closed the inspection with zero observations and classification of No Action Indicated (NAI). Dr Reddy’s Laboratories stock has jumped 8.6% in the last one month and 19% in the past one year. Among the large-cap pharma companies alongside Zydus Life, DRL is the only other company with a pristine USFDA cGMP track record with all its API/Formulation facilities receiving a VAI/NAI from the USFDA.
Dr Reddy’s Labs Stock Outlook
Nirmal Bang: ACCUMULATE – Target Price: Rs 5180
“We like DRL management’s strategic decision-making ability and its enhanced focus on the branded business. However, restructuring and a shift in focus from Gx to BRx markets are likely to weigh on near to medium-term growth. Also, capital allocation is still high towards Developed Market acquisitions, complex products and the innovative pipeline. Spending on Horizon 2 opportunity (mainly due to innovation) and biosimilars is likely to drag DRL’s overall financials. We maintain ‘ACCUMULATE’ on DRL with a revised target price of Rs 5,180, valuing it at 24x PE on FY25E base EPS of Rs 209 and NPV of Rs 168 for the Revlimid opportunity,” said analysts at Nirmal Bang.