InvestorQ : I have been looking to buy a pharma stock and wanted to check if I can buy Dr. Reddy Labs after the results announced for the fourth quarter?
Anjana Aiyar made post

I have been looking to buy a pharma stock and wanted to check if I can buy Dr. Reddy Labs after the results announced for the fourth quarter?

Answer
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Arya Nanda answered.
1 year ago


Reddy labs did announce strong results for the fourth quarter. Net profits were up by 44% at Rs.434 crore while the total sales were up by 14% at Rs.4016 crore. Operating profits were sharply up at Rs.882 crore and that meant that the operating profit margins (OPM) had gone up from 16.3% last year to 22% in the current year.

The stock has rallied sharply by almost 50% in the last 3 months and that does take away some margin of safety in the stock. However, the operating performance appears to be robust and that makes a case for buying the stock. You must be a little cautious about the recent US lawsuit about price inflation by Indian companies because the name of Reddy Labs is also included in that list. You can adopt a phased approach the stock on every dip so as to keep the average cost low.