Dr Reddy‘s Laboratories: Strategic pivot in favor of brand businesses

研报英文原文证据摘录

Dr Reddy‘s Laboratories: Strategic pivot in favor of brand businesses

Global Markets Research

Dr Reddy's Laboratories REDY.NS DRRD IN 21 June 2026

EQUITY: HEALTH CARE & PHARMACEUTICALS

RatingStrategic pivot in favor of brand businesses Remains Buy

Target priceStreet expectations muted make risk-reward favorable; Increased from INR 1,740maintain Buy and our top pick INR 1,600

We are constructive on Dr Reddy's, as we see upside risks to consensus earnings Closing19 June price2026 INR 1,272

and valuations

Dr Reddy's has sharpened its focus on branded generics and the consumer business, a Implied upside +36.8%shift reflected in acquisitions, organic investments, and recent changes to the

management council. Over the past five years, unbranded generics have accounted for Market Cap (USD mn) 11,229.8

less than 10% of acquisition value. The company has expanded its front-end commercial ADT (USD mn) 33.9

footprint, which we estimate adds annual expenses of 4–5% of sales. Strategic pivot for

its branded business is further evident in the recent changes in management council with Relative performance chart

MV Ramana's expanded role (he previously headed branded generics), the induction of

the India head into the management council, and the redesignation of the EU head as

Head of Consumer Business. In contrast, US generics has seen limited successes in the

recent past, with a decline in the pending ANDA pipeline over the past seven years. We

expect the strong growth in India and emerging markets to sustain over the medium term.

We forecast branded products' contribution to rise to nearly 60% by FY29F, up from 48%

in FY22 (pre-gRevlimid). The revenue mix change should support sustainable earnings

growth and, in turn, drive a re-rating of the stock's valuation multiple.