Analyst Nook: ‘Impartial’ on Dr Reddy’s; agency will get rights for 250m doses of Sputnik


We proceed to worth DRRD at 25x 12M ahead earnings to reach at Goal Value of Rs 5,410. We keep Impartial on a restricted upside from present ranges.

The federal government’s Topic Knowledgeable Committee (SEC) of the Central Medicine Customary Management Group (CDSCO) has lately advisable RDIF’s Sputnik V COVID vaccine for Emergency Use Authorization (EUA) in India. Dr Reddy’s (DRRD) has unique advertising and marketing and distribution rights for the primary 250m doses of Sputnik V vaccines in India.

Contemplating the bottom case situation of a pricing cap of $2 per dose for the vaccine, we consider the upside potential for revenues is ~$300m for DRRD at some stage in the contract. Accordingly, we elevate our EPS estimate for DRRD by 5%/2% for FY22/FY23, factoring within the alternative within the vaccine enterprise.

We proceed to worth DRRD at 25x 12M ahead earnings to reach at Goal Value of Rs 5,410. We keep Impartial on a restricted upside from present ranges.

Per the information experiences, SEC of the CDSCO has advisable the EUA of RDIF’s Sputnik V COVID vaccine in India. Contemplating the suggestions, the Medicine Controller Common of India (DCGI) would take the ultimate name on the vaccine’s approval. Subsequently, the vaccine can be accessible for advertising and marketing in India.

DRRD has unique advertising and marketing and distribution rights for the primary 250m doses of the Sputnik vaccine in India. Whereas the pricing is capped and distribution can be managed by the federal government authority for Covid vaccines, the opening up of vaccine distribution to the personal market might result in higher pricing and margins for DRRD.

Many producers have already been contracted with producing the vaccine for world in addition to Indian use. Assuming a present pricing cap of $2 per dose for the vaccine, we consider the upside potential to gross sales is ~$300m for DRRD at some stage in the contract.

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