TOP GAINER on Nifty, Dr Reddy’s Laboratories rises 5% today; expert pegs target price at Rs 5400-Rs 5450, stop-loss Rs 4950

Dr Reddy’s Laboratories share price: Technical Analyst, Simi Bhaumik says that the Pharma sector will remain in focus and will see buying till the market remains weak on increasing Covid fears. The stock can see a target of Rs 5400 – Rs 5450 from here on and stop-loss can be Rs 4950. She suggested fresh buying should be done on dips. Dr. Reddy's Laboratories share price today is Rs 5188, up Rs 220 or 4.5%.

Vishal Wagh, Research Head at Bonanza Portfolio says that  current market sentiments and the second wave of pandemic have increased the demand for various medicines. The listed manufacturers and distributors of medicine are in focus now. Dr Reddy’s Laboratories is one of the players out of it. From 2015 to 2018, Dr Reddy’s Laboratories remained in corrective mode as the pharma sector was going through correction between 2015-2020. But Since May-2018, Dr Reddy’s Laboratories started outperforming the pharma sector and in the sell-off of 2020, the stock has given only a knee-jerk reaction. From 2018 stock managed to multiply itself by 2.7 times and currently it is hovering around 5200 levels.

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In the last six months, the stock has completed its correction, and now it is resuming uptrend again. In the process, it is managing to outperform Nifty as well as the Pharma index. On the lower side, the recent lows of Rs 4130 will act as a major support on the higher side Rs 5512 will work as resistance, and once the stock cut levels of Rs 5512 it will move in the uncharted territory. The strategy to play is to buy and hold with trailing stop-loss. Currently, the initial stop-loss will be Rs 4130. On the higher side one can expect 20-25% returns in the short term and 40-50% returns in the mid-term, said Wagh.

Dr. Reddy’s Laboratories Key Risks:

Haitong Securities highlights that Delay in drug launches, unfavorable outcomes from FDA inspections, higher than expected price erosion in US business are the key risks for Dr. Reddy’s going forward.