Dr. Reddy’s Laboratories Ltd.’s share price rose to hit its highest in over a month, after Nomura upgraded the stock to a ‘buy’ rating from ‘neutral’ as it sees favourable risk-reward for the firm.
The stock gained the most among Nifty stocks, even as the index fell 1%. The brokerage has also raised the stock’s target price to Rs 1,500, implying nearly 18% upside.
Before this, Nomura’s target price for the stock was Rs 6,499, adjusted for the the 5:1 split it becomes Rs 1,299.8.
According to the brokerage, the stock has underperformed the sector over the past one to five years. “Over the past one year, the stock has risen 13% vs the Nifty Pharma index up 36%,” it said. “This is despite strong (22.6% earnings CAGR over FY20-25F) growth and upward revisions (FY25/26 consensus EPS estimates up 10-12% over the past 12 months).”
