Dr Reddy’s Laboratories hit a fresh 52-week low of Rs 2,953.35 on Wednesday on rising concerns over Venezuela currency devaluation. Venezuela is an important market for domestic pharmaceutical companies. Dr Reddy’s earned Rs 833 crore in revenue from Venezuela in 2014-15.
At 1.35 pm, the share price of Dr Reddy’s Laboratores was down 2.05 per cent at Rs 3,008. The scrip hit a high and low of Rs 3,023.95 and Rs 2,953.35, respectively, in trade. Later, the share price of the company closed 2.40 per cent down at Rs 2997.30.
Sarabjit Kour Nangra, vice-president, research, pharma, Angel Broking, said, “Concerns over Venezuela currency devaluation hit Dr Reddy’s Laboratories stocks on Wednesday. However, we have ‘Buy’ rating on stock with a target price of Rs 3,900.”
Dr Reddy’s Laboratories also submitted a response to the US health regulator on a warning letter it had received last month. The company in a BSE filing said, “We would like to inform that the company has submitted a response to the US Food and Drug Administration (USFDA) on December 7.
Japanese brokerage firm Nomura also has a ‘Buy’ rating on the shares of Dr Reddy’s Laboratories and believe the scrip can touch Rs 4,346 in the next few quarters.
Last month, the country’s second-largest drug maker had received a warning letter from the USFDA relating to two of its API manufacturing plants and a formulation plant in Andhra Pradesh and Telangana.
In response to the letter, Dr Reddy’s Labs, CEO GV Prasad had said the company is in the process of shifting some of the products from these plants to other facilities and considering third party assessment for its plants.”
The US agency had asked the drug maker to provide a comprehensive evaluation of the extent of inaccuracies in recorded and reported data and include a detailed action plan to fully investigate the scale and root causes of “deficient documentation and data management practices”.
In the past one year, the share price of Dr Reddy’s Labs plunged 7.36 per cent to Rs 3070.85 on December 8. Sensex fell 9.99 per cent during the same period.
(With agency inputs)