Dr Reddy’s Laboratories incorporates wholly-owned subsidiary in Jamaica; stock rises 1%

Shares of Dr Reddys Laboratories jumped nearly 1 percent in early trade on September 29 post the incorporation of a step-down wholly owned subsidiary.

At 9:24 am the Dr Reddy’s stock was trading 0.89 percent higher at Rs 5477.24 on NSE.

Dr. Reddy’s Laboratories’ Switzerland unit has incorporated a wholly owned subsidiary in Jamaica, named “Dr. Reddy’s Laboratories Jamaica Limited”. Accordingly, Dr. Reddy’s Laboratories Jamaica Limited is a step-down wholly owned subsidiary of the company. It will be engaged in importation, warehousing, distribution and exportation of pharmaceuticals according to a BSE notification dated September 28.

Pharma major Dr Reddy’s Laboratories on July 26 reported an 18.1 percent rise in net profit at Rs 1,402.5 crore for the quarter that ended June 30, 2023, despite a high base of  Rs 1,187.6 crore during the same period a year ago. The company had a one-time gain of $72 million in the base quarter that it had received from British drugmaker Indivor as a settlement for a patent litigation for the generic drug Suboxone.

Follow our live blog for all the market action

Moreover, the net profit also topped the Street’s estimate of Rs 944.1 crore. Revenue for the drugmaker rose 29.2 percent to Rs 6,738.4 crore as against Rs 5,215.40 crore in the year-ago period.  The Street had pegged revenue for the company at Rs 6,458 crore for the quarter under review.

The company reported an EBITDA of Rs 2,137.2 crore for the quarter as against Rs 1,779 crore in the previous corresponding quarter. EBITDA margin came at 31.7 percent for April-June, against 34.1 percent in the year-ago period. Expenses on research and development (R&D) was Rs 498.4 crore, which was 7.4 percent of revenues in the quarter.

Brokerage Views on Dr Reddy

Brokerage firm Yes Securities has assigned a ‘buy’ call on Dr. Reddy’s Laboratories in a recent research report with a target price of Rs 6300.The current market price of Dr. Reddy’s Laboratories is Rs 5939.4. Yes Securities recommended to keep stop loss at Rs 5730.

Stock Performance

Dr Reddy’s stock has given a return of 18.88 percent over the last six months. The benchmark Nifty50 index has given a return of 14.30 percent over the same duration.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.