Maintain 'buy' on Dr. Reddy's Lab - TP Rs.1803 - Geojit BNP Paribas Financial Services

- Dr. Reddy's annual report gives an indication of long term growth drivers. Prominent amongst them are biosimilars and OTC.

- The company is expected to introduce its strong biosimilar product portfolio in the developed markets and increasing focus on scaling up its OTC business in the US, Russia and India.

- The overall message from the annual report is positive despite challenging operating environment.

- The near term focus will be on limited- competition products in the US (10% of sales), OTC products in Russia and Rx products (prescribed by a doctor) in India.

- R&D investments would receive a major thrust as a result of these initiatives.

- It is expected that the company's near-term earnings momentum to remain strong given limited - competition products launch in the US and growth momentum in Russia.

- The annual report also highlighted the formation of a key partnership with retail chain Walmart in the US and entering the India OTC market with two product launches.

- Its top four products in the US delivered sales of 200 million USD, ie, 30% of the company?s total US sales.

- It has also highlighted its Indian Initiative "Indura" which promotes 18 brands with 600 medical representatives.

- Company?s 2002 stock option with 10 year validity has been extended for another 10 years.

Source : Equity Bulls

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