Dolat Capital Market's research report on Dr Reddy's Laboratories
Russia’s COVID vaccine Sputnik V has been recommended for use in India by the expert committee. Dr. Reddy’s has partnered with RDIF (Russian Direct Investment Fund) to distribute (in India) first 250mn dosages of Sputnik V. Currently in Phase 3 in India, DCGI in Feb’21 had asked for immunogenicity data before being granted an emergency approval. Once approved, this would be the third vaccine post Covaxin (Bharat Biotech) and Covishield (SII and Oxford-Astrazeneca) in India. While the final approval is yet to be received, we believe that once approved it could contribute ~R5.9bn of earnings translating into NPV of Rs35 per share (assuming price of Rs225 per dose). We have factored in 45% of distribution and marketing benefits for Dr. Reddy’s.
Outlook
At CMP, stock is trading at 22x FY23E EPS of Rs216 +Rs40 NPV for Sputnik V + Rs175 for gRevlimid. We maintain Accumulate with a target price of Rs5400.
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