Shares of Dr. Reddy’s advanced over 6% on Thursday after the drugmaker received an EIR (Establishment Inspection Report) from the United States food and drug regulator for it’s Srikakulam plant. The stock of Dr. Reddy’s was the top gainer on Sensex and Nifty and hit its highest price since 31 July 2017. The stock of drugmaker rose as much as 6.6% to the day’s high of Rs 2,466.4 on BSE today.
The research and brokerage firm Morgan Stanley also raised the rating to “overweight” from “equal-weight” and upgraded its target price to Rs 3,133 from Rs 2,798. Dr. Reddy’s drug pipeline news could intensify and come to fruition in next 4 to 8 quarters and its US pipeline has strengthened significantly over last three years, said Morgan Stanley. Its US business accounts for about 50% of total revenues with higher margins than the consolidated company, it added. Of the 40 brokerages covering the stock, only nine rated the stock “buy” or higher, while 15 have “sell” or lower ratings with a median target price of Rs 2,455 rupees, Reuters reported. As of Wednesday’s close, the stock had fallen 24.4% this year, compared with 9.2% decline in Nifty Pharma index.
Sensex and Nifty opened flat on Thursday after the US Federal Reserve left rates unchanged and signaled one more hike by the year-end. BSE Sensex gained 6 points to open at 32406.42 points, NSE Nifty lost 1.5 points to open at 10,139.6 points. In line with expectations, the Fed said it would begin in October to cut its roughly $4.2 trillion in US Treasury bonds and mortgage-backed securities holdings by initially cutting up to $10 billion each month from the amount of maturing securities it reinvests.