Dr. Reddy's Labs Range-Bound

Dr. Reddy's Laboratories, Ltd. (RDY) is a global pharmaceutical company located in Hyderabad, India. RDY produces active pharmaceutical ingredients (API), finished dosage forms and branded and generic pharmaceutical products for the global market.

While fiscal 2007 was a very strong year for the company, the lack of significant generic product launches, intense pricing pressure in the generics market, and declining revenues from the Mexico CPS and betapharm businesses took a toll on the company's performance in fiscal 2008. Though we expect RDY to swing back to growth in fiscal 2009, we believe it will take some time for the company to resolve the situation in Germany and Mexico.

This, along with the lack of any significant near-term catalysts, is likely to keep the shares trading in a tight range over the next few months. We maintain our Hold rating with a price target of $10 (INR 470).

Arpita Dutt contributed to this report.

Read the full analyst report on RDY

Read the full analyst report on RDY