Life Insurance Corporation of India, in a recent filing with BSE, announced that the Corporation’s shareholding in Dr. Reddy’s Laboratories Ltd has increased from 7.676% to 9.695% of the paid-up capital of the said Company with the share equivalent numbers ranging from 1,27,83,287 to 1,61,44,983 Equity Shares.
Dr. Reddy’s stock started off its trading session at Rs 4,394 and closed at Rs 4,347.9. In comparison to the previous closing levels of Rs 4,370.4, the stock has witnessed a downfall of around 0.5 percent. Being in the green, the stock, in a span of 6 months, gave 4.3 percent returns to its stakeholders ranging from Rs 4,169 to the current levels.
While the shares of LIC opened today at Rs 583.8 and closed at Rs 578.7. The stock shed around 0.6 percent as compared to the previous closing price of Rs 582.10.
Morgan Stanley maintains an ‘overweight’ rating on Dr. Reddy’s with a target price of Rs 5,099 per share showing an upside of around 18% from the current levels.
“The Mayne US generic acquisition of Dr. Reddy’s is value accretive and should bolster the Indian company’s US portfolio,” the brokerage highlighted.
Dr. Reddy’s Laboratories Ltd is a leading India-based pharmaceutical company that offers a portfolio of products and services, including Active Pharmaceutical Ingredients (APIs), Custom Pharmaceutical services (CPS), generics, biosimilars, and differentiated formulations. It is one of the largest manufacturers of APIs in the world and has one of the largest CPS businesses in India.
It is striving hard to increase its focus on limited competition niche products, injectables, and biosimilars, which are expected to provide a boost to its revenues and profitability in the medium term.
The financials of the company showcases a decent amount of growth inhibiting effective operations throughout. Firstly, the revenues of the company showed an improvement by shifting from Rs 6,331.8 crores in Q2 to Rs 6,789.8 crores in Q3. Another parameter taken into consideration is the net profit figure, it has moved from Rs 1,100.2 crores in Q2 to Rs 1,237.9 crores in Q3.
Promoters of the company have marginally decreased their stakes from 26.71 percent in Q2 to 26.7 percent in Q3. On a contrasting note, FIIs have consistently increased their stakes since the past 4 quarters. The most recent shift being from 26.26 percent in Q2 to 27.29 percent in Q3.
Written by Amit Madnani
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