Dr. Reddy’s Laboratories is an Indian pharmaceutical company based in Hyderabad, India.
The market cap of Dr. Reddy’s Lab, as of June 12, 2018, was a little over Rs.36,300 crore.
Company’s Wealth and Recent Performance
- For the March quarter of the financial year 2017-18, the company’s revenue was reported to be at Rs.3,535 crore. In comparison to the previous quarter, this figure was down by 7%. Consolidated net profit for the March quarter stated to be at Rs.302.5 crore, in contrast to Rs.312.5 crore in the corresponding quarter of the previous fiscal year.
- For the year ended on March 31, 2018, the consolidated revenue posted by the company reported its consolidated revenue to be at Rs.14,202.8 crore. This translates into a 1% increase over the previous financial year. The profit after tax for the year was disclosed to be at Rs.981 crore, in contrast to Rs.1,203.9 crore for the previous year. Its research and development allocation for the period decreased by 7% over the FY17 to Rs.1,826 crore.
- The performance of Dr. Reddy’s Labs in the international markets took a hit in the March quarter. Its global generics revenues for the quarter decreased in North America, Europe, and the emerging markets. However, when we look at these regions over the entire year, Europe and emerging markets registered a growth of 8% while North America reported a decline of 6%.
Dr. Reddy’s Laboratories Stock Trends in 2018
- On January 2, 2018, the opening price of Dr. Reddy’s Lab shares was Rs.2,427 on the National Stock Exchange. The price of the BSE SENSEX listed stock moved on to rise over the course of the month to enter the Rs.2,530 territory. However, thereafter, Dr. Reddy Labs shares moved on to shed roughly 15% and went down to be traded in the levels around Rs.2,100.
- On February 2, the opening price of the scrip was Rs.2,150 on NSE. The month of February wasn’t a tumultuous one for the investors but it did show signs that the markets may be in for a bear run. The closing price of the stock at the end of the month was Rs.2,237.25.
- The Dr. Reddy’s Labs stock price gradually went down over the course of March. The NIFTY 50 stock, which started the month trading at levels around Rs.2,200, moved on to end the month at Rs.2,080. Things didn’t change a lot in the month of April either. The stocks maintained their bearings at levels below Rs.2,150.
- It wasn’t until May that things took a turn but it didn’t bring any reprieve to the investors. In fact, the stock price of Dr. Reddy’s continued to go down and for the second half of the month, the shares changed hands at levels below Rs.2,000. The closing price on May 31, 2018, was Rs.1,936.60. However, the first week of June brought some joy to the investors as the stocks started an upward run. The scrip managed to enter the Rs.2,100 territory again and lifted the Nifty Pharma index.
Dr. Reddy’s Laboratories Stock Trends in 2016 and 2017
- At the start of 2016, the stock price of Dr. Reddy’s Lab was in the levels slightly above Rs.3,000. The price didn’t vary a lot over the course of January. It did descend into the Rs.2,900 territory but managed to bounce back soon. The month of February was along the same lines as the price varied slightly around the Rs.3,000 mark. The price rose by around 6% in March to move past the Rs.3,200 mark but failed to stabilise at those levels. By the end of the first quarter of the calendar year, the price was back to its previous levels.
- Things did not vary significantly in the month of April. The share price remained well-above the Rs.3,000 mark and it remained that way for the most of May as well. The closing price of the Dr. Reddy’s Labs scrip on May 31, 2016, was Rs.3,183 on the National Stock Exchange. In the first half of June, the stocks shed more than Rs.100 but managed to sustain their bearings at the Rs.3,000 mark.
- In the final week of June, the shares commenced a bull run which continued well into the month of July. The scrip moved on to gain more than 15% in under two weeks with the closing price on July 14, 2016, being Rs.3,583.20. In fact, for a brief period in July, the shares of Dr. Reddy’s Labs changed hands at values above Rs.3,600. However, after reaching these levels for the first time since November 2015, the share price plunged in the final week of July. This drop was nothing short of a dramatic nosedive as the scrip lost its recently made gains in less than a week.
- By early August, the shares were being traded at levels around Rs.2,950. The stocks attempted to recover and it wasn’t until the second half of the month that the Dr. Reddy’s Labs shares once again found themselves in the Rs.3,000 territory. The month of September brought some consolation to the investors as the stock price rose to levels above Rs.3,100. A similar trend was observed in the month of October as well. Towards the end of the month, the shares made decent gains to cross Rs.3,300.
- Interestingly enough, the share price did not plummet by a lot post demonetisation in November 2016. The stock did shed some points but they weren’t that significant. The scrip maintained its position above the Rs.3,000 mark and continued to be traded at those levels for the entire month of November. The price dipped slightly in December, with the closing price at the end of the year being Rs.3,060.40.
- 2017 proved to be a disappointing one for the stakeholders. The NIFTY 50 stock started exhibiting bearish signs early in the year. For the most of January, the share price of Dr. Reddy’s Labs was in the Rs.2,900 territory. The prices dropped further in February as the scrip went down to be traded in the levels below Rs.2,900. This downward trend was seen over the entire month of March as well. The stock price continued to drop and the closing price on March 31, 2017 was Rs.2,632.
- Things did not change a lot in the months of April and May either. The stock price continued to go down as the shares changed hands at levels around Rs.2,600. Towards the end of May, there was a sharp dive in the share price which took the Dr. Reddy’s Labs shares to the Rs.2,400 territory. By this point in time, the scrip had lost more than 15% in value since the start of the year.
- The start of June brought some relief to the investors as the stock price started to rise, although the gains made in this period were marginal. Through June and most of July, the shares were traded at levels between Rs.2,600 and Rs.2,700. The prices rose steadily in this period but post the announcement of Q1 results, the shares lost their gains in a startling manner. Within the first two weeks of August, the scrip lost drastically and entered the Rs.2,000 mark. In this period, the shares lost more than 20%.
- After the shares went down to be traded at levels below Rs.2,000, it was an uphill task for the scrip to recover. By October, the scrip had improved by Rs.400 but it was still significantly lower than its levels at the start of the year. The last two months of the year didn’t bring joy to the investors as the scrip continued to be bearish. The closing price at the end of the year was Rs.2,414.20.
Should you invest in Dr. Reddy’s Laboratories?
- Over the course of last two years, the shares of Dr. Reddy’s Lab have been on a downward path. In January 2016, the shares were trading at levels around Rs.3,000 but by June 2018, the shares were observed trading at levels around Rs.1,990. This translates into a 30% drop in the stock price.
- At the same time, NIFTY Pharma - the country’s benchmark stock market index for the pharmaceutical sector, has also been on a downward trajectory. The index has shed more than 2,000 points in the last two years. It goes without saying that the pharmaceutical sector has been struggling, primarily owing to processes and quality standards employed by the companies. The US FDA’s concerns with these companies is another factor be considered here.
- Fundamentally speaking, the company is built on strong foundations and has sound management. However, with the ongoing issues in the pharma sector, it may not be a feasible idea to invest in Dr. Reddy’s shares. Alternately, you can look into mutual funds with holdings in the company. Before investing, it is strongly suggested that you do your own research.
Dr. Reddy’s Pharmaceuticals is an Indian multinational pharmaceutical company with presence in more than 80 countries across the world. The company presently offers more than 200 generic versions of expensive medicines at just fraction of a cost. Its comprehensive portfolio includes capsules, tablets, injectables, and topical creams across the therapeutic areas like paediatrics, dermatology, cardiovascular disease, pain management, gastrointestinal problems, and anti-infection.
History of the Company
Dr. Reddy’s Laboratories was launched in the year 1984. Back then, the company was focussed on producing only active pharmaceutical ingredients. Two years later, the company started its operations with emphasis on branded formulations. It launched a couple of brands in India over the next few years, and inspired by their success in the domestic markets, it soon expanded its operations internationally. The late 1990s saw Dr. Reddy’s Laboratories enter highly-regulated markets like the United States. This decade also saw the organisation commence the production of generics by filing an Abbreviated New Drug Application in the USA. Over the course of the next decade, the company focussed on improving and strengthening its product offerings and solidifying its position internationally.
Management of the Company
Mr. Satish Reddy - Chairman
Mr. Reddy presently serves as the Chairman of Dr. Reddy’s Laboratories. He has been a part of the organisation since 1993 when he joined as an Executive Director. Over the years, he moved up in the ranks and held various key positions like Managing Director and Vice-Chairman. He has been instrumental in formulating policies concerning the pharmaceutical sector and the economy. He has served as a member of the Drugs Technical Advisory Board of India and also the President of the Indian Pharmaceutical Alliance. He also oversaw the expansion of the company into international markets like Russia and the Commonwealth of Independent States.
Mr. G V Prasad - Co-Chairman & Chief Executive Officer
Mr. Prasad has played an important role in transforming the company from a domestic entity into an international pharmaceutical giant. He has been a part of the Board of Directors since the company’s early years. During his tenure that spans across almost 30 years, he has improved the revenues of the company from a mere $50 million to more than $2.5 billion. It was under his leadership that the company expanded globally by capitalising on the opportunities in developed and emerging markets. Mr. Prasad has received several awards for his efforts, the most notable of which is the ‘India Business Leader of the Year’ by CNBC Asia in 2015.
Mr. Erez Israeli - Chief Operating Officer and Global Head Generics & PSAI Business
Mr. Israeli is among the newest members to join the management team at Dr. Reddy’s Laboratories. He joined the company in April 2018 from the Israel based chemicals company Enzymotec, where he served as the President and the Chief Executive Officer. He has more than 25 years of experience and over his impressive tenure, he has held several key leadership positions. It is definitely worth remarking that prior to joining Enzymotec, Erez worked with Teva Pharmaceuticals Limited for 23 years during which time, he held several roles like Head of Global Quality, Vice President Asia Operations, President Teva API, President & CEO of Growth Markets, et cetera.
Dr. Reddy’s Laboratories Listings in BSE, NSE, and Indices
Dr. Reddy’s Labs is one of the biggest pharmaceutical companies in the country. Its stocks are available for trading on the National Stock Exchange of India Limited and the Bombay Stock Exchange. Its shares are also available for international investors on the New York Stock Exchange. The codes for the same are as follows:
- BSE Code: 500124
- NSE Code: DRREDDY
- ISIN: INE089A01023
- Sector: Pharmaceuticals
Coming to the stock market indices, the pharmaceutical giant comprises the country’s two benchmark indices - BSE SENSEX, NIFTY 50. In addition to these indices, the company is also listed on the following:
- NIFTY 50 USD
- S&P BSE 100
- S&P BSE 200
- S&P BSE 500
- S&P BSE Healthcare
- NIFTY Pharma
- S&P BSE SENSEX 50
Dr. Reddy’s Laboratories Limited
8-2-337, Road No. 3,
Hyderabad - 500034
Phone number: +91-40-49002900
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