Jefferies has a bearish view on Dr Reddy’s and Cipla while it has a bullish view on Mankind Pharma. The same has been strongly debated its said.
The brokerage has “underperform” ratings on Dr Reddy’s Laboratories and Cipla with target prices of 1,040 and 1,120 apiece, which indicate downside of 23% and 21.7%, respectively. Meanwhile, it has a “buy” recommendation on Mankind Pharma with a target price of 3,000 apiece, which is a 19.9% upside from its previous close
Jefferies said even in a blue sky situation, Dr Reddy’s Laboratories and Cipla offer only 14% and 12% upside, respectively.
In contrast, Mankind Pharma’s rainy day scenario implies 11% downside, it said. The same is a low probability, given early signs of a turnaround.
Jefferies said Dr Reddy’s Laboratories’ upside is modest even under stretched assumptions, while Cipla’s bull case hinges on timely approval of two US drugs, which is unlikely in the brokerage’s view.
| Stock | Buy | Hold | Sell |
| Dr Reddy’s Laboratories | 19 | 10 | 12 |
| Cipla | 24 | 9 | 8 |
| Mankind Pharma | 16 | 2 | 4 |
Stock reactions
Dr Reddy’s Laboratories shares were down 0.7% at 1,340 in early trade on Thursday. The stock has gained 5.6% in the past month.
Cipla shares were down 0.1% at 1,430 in early trade on Thursday. The stock has gained 3.9% in the past month but is down 4.7% this year, so far.
Mankind Pharma shares were up 0.5% at 2,503.3 apiece in early trade on Thursday. The stock has gained 4.7% in the past month and is up 15.7% this year, so far.
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