Last updated: 18 Sep, 2020 | 10:56 am
Co-operation with Russia’s Sovereign Wealth Fund
While the pandemic has hurt the businesses of most industries, it has presented a unique opportunity to drug manufacturers. Given a strong product portfolio of more than 200 generic drugs, and a robust US pipeline, Dr Reddy’s Lab is well-placed to remain an outperformer in the space. Given nature and extent to which India is hurt due to the pandemic, this new deal with Russia’s Sovereign Wealth Fund will further help the company to strengthen its position.
Dr Reddy’s Lab has been rapidly expanding its business in India as well as a few other international markets. In Q1FY21, DRL’s profits dropped 13% to 595 crore, mainly due to a drop in India sales. It had reported a rise in sales across in almost all other markets. The deal with Celgene is expected to provide DRL significant cash flows from Revlimid generic during FY23-26, providing a boost to its earnings visibility.
Consensus recommendation: Buy (Based on views of 38 analysts from external institutions)