Dr. Reddy's Labs - Rating – Buy; Target Price – Rs3,260 - Centrum

- We expect Dr. Reddy's Labs (DRL) to report revenue growth of 16.1%YoY but decline of 1.0%QoQ to Rs33.2bn. We expect growth of 26.3%YoY but decline of 0.9%QoQ in the global generic business to Rs26.30bn. We expect DRL's PSAI business to decline by 10.2%YoY and remain flat QoQ to Rs6.40bn.

- DRL has called off its JV with Fujifilm, Japan for generic drugs.

- We expect DRL's EBIT margin to decline by 210bps YoY to 13.7% from 15.8%.

- We expect DRL's net profit to grow by 6.8%YoY to Rs3.88bn.

- Our target price is based on 23xDec'15 EPS of Rs141.7.

Source : Equity Bulls

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