The Stock for "NO LOSS NOVEMBER"- "Dr. Reddy's Laboratories "

Dr. Reddy's Laboratories is an Indian multinational pharmaceutical company based in Hyderabad and Telangana.The Company was established by Anji Reddy the company has over 190 medications, 60 active pharmaceutical ingredients (APIs) for drug manufacture, diagnostic kits, critical care, and biotechnology products. The Company produce in three segments: Global Generics, Pharmaceutical Services and Active Ingredients (PSAI), and Proprietary Products. The company's manufactures and markets a wide range of pharmaceuticals in India and overseas.Dr. Reddy’s had six FDA plants producing active pharmaceutical ingredients in India and seven FDA certified plants making patient ready medications five of them in India and two in the UK. 
Company’s Products 
Therapeutic Focus: 

  • Therapeutic Focus banner Understanding patient and partner needs deeply and then developing products. 
  • Oncology: Cancer is a disease that requires specialized treatment and care at every stage. 
  • Cardiovascular: Dr Reddy’s has developed a wide and varied portfolio of anti-hypertensive medicines to bring good health to the millions affected by this condition. 
  • Anti-Diabetic: Dr. Reddy’s has established products like Metformin, Glimepiride, and Glicazide to ensure good health to diabetics. 
  • Dr. Reddy's Laboratories bought the established brands of Belgian drug maker UCB SA in South Asia for 8 billion rupees ($128.38 million) 
  • Dr. Reddy's Laboratories announces the launch of sevelamer carbonate tablets in the U.S. market. 
  • The District Court of United States has delivered judgment in favor of Dr Reddy’s Laboratories ruling that the proposed generic version of Suboxone (buprenorphine and naloxone) sublingual film does not infringe US patent as asserted by Indivior 
  • Dr. Reddy's Lab signed a licensing pact with XenoPort for their experimental treatment to treat plaque psoriasis 

Fundamental Analysis 
Dr Reddys Laboratories Ltd is an integrated global pharmaceutical company. The company has market capitalization of 39734.72 crore and turnover of 9719.80.The company offers a portfolio of products and services including Active Pharmaceutical Ingredients (APIs), Custom Pharmaceutical Services (CPS), generics, biosimilars, differentiated formulations and News Chemical Entities (NCEs) through their three businesses - Pharmaceutical Services and Active Ingredients, Global Generics and Proprietary Products. Their major markets include India, USA, Russia and CIS, Germany, UK, Venezuela, S. Africa, Romania, and New Zealand. 

  • The stocks pe ratio is 32.95 and the industry pe ratio is 38.15 which shoes that the stock is undervalued 
  • The company is maintaining healthy dividend payout of 17.60%. 
  • The stock’s pe is also low compared to its peers like cadila health care, primal enterprises. 
  • Company is going to declare its quarterly results on 31st oct which is expected to be positive in terms of increase in PAT and net sales. 
  • The company’s other operating income is increasing yoy basis from 97.50 Crocr to 115 Crore 

Technical Analysis 
The stock recovered from its monthly support level of 1900, it has touched this low in August 2017. Since then the stock recovered nearly 25 percent. The stock is in tight consolidation range since last 4 to 5 weeks forming a pennant pattern. If we draw a Fibonnaci Retracement from the Monthly low 386 made in February 2009 to the all-time of 4386 it is observed that it has recovered from 61.8% of this swing. A strong break out of consolidation range is expected this month with high volume. 

  • Break out of the Pennant pattern is confirmed above 2430 
  • 100 day EMA also formed and strong resistance near 2430 on daily chart and hence break out above this resistance is expected to be powerful 
  • It may face a resistance of weekly trend line drawn from its life-time highs, the resistance would be aroun 2550 
  • RSI on Weekly chart also near 50 and if moves above it will confirms the break out 
  • 2240 is the key support and should not be breached, further 1900 is the 2nd key support 
Go for buy above 2435 levels in cash and if you trade in futures than buy above 2444 only. A target of 2600 to 2800 is expected till the expiry of the November contract, maintain stop loss below 2270 

Supports and Resistance (Monthly) 

  • Resistance 1- 2475 Support 1- 2270 
  • Resistance 2- 2630 Support 2- 2175 
  • Resistance 3- 2820 Support 3- 1900