With increased competition in g-Revlmid weighing on near-term performance, can Dr Reddy's Labs still deliver growth? The company's management has outlined a plan to improve prospects over the next 2-3 years, but will it be enough to drive investor confidence?
A recent research report by Motilal Oswal highlights the company's efforts to drive growth, including the launch of promising products like Semaglutide and Abatacept, and cost-rationalization measures to support better margins.
Product-wise, Semaglutide and Abatacept present promising opportunities from FY27 and FY28 onwards, respectively. The company is also executing plans to drive growth in its remaining businesses, including India, EU, Emerging Markets, and the PSAI segment.
Historically, the Indian pharmaceutical sector has shown resilience in the face of competition, with companies like Dr Reddy's Labs adapting to changing market dynamics. The current valuations of the company's base business, excluding Semaglutide and Abatacept opportunities, are around 16x 12M forward EBITDA, which may indicate a buying opportunity for long-term investors.
From a technical perspective, the Nifty Pharma index has been trading in a range-bound manner, with the Bank Nifty providing support to the overall market. This could be an indication of trader psychology, where investors are waiting for a catalyst to drive the market higher.
Follow the latest updates on the Indian stock market and pharmaceutical sector on #NiftyPharma and #DrReddysLabs.
Disclaimer: This article is for informational purposes only and should not be considered as investment advice. Investors are advised to do their own research and consult with financial experts before making any investment decisions.
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