Seeking Alpha
Profile| Send Message|
( followers)  

India can be a nasty place to invest. Government bureaucratic nightmares that make ours seem paltry in comparison. Corruption, swindling, frequently changed regulations to suit political whims: check, check and check. Buying the Indian market through an ETF or sector mutual fund was popular - until the market hit the skids.

One stock I like now (other than ICICI Bank (NYSE:IBN)) is Dr. Reddy's Labs (NYSE:RDY) as an ADR. This rather oddly named company is a diversified and aggressive pharmaceutical company with a presence in over one hundred countries. RDY has seen its share price have ups and downs, but I believe that now is a good time to enter the security with a target price of $34/share. Presently RDY trades at $14.76 with a market cap of $2.5b. As its 52-week high has only been slightly north of $18/share, one could question my sanity at making a bold calculation of a future price two years or less hence.

Although RDY saw earnings fall 26% at last report, it did beat most expectations. Importantly, RDY has been piling up pharma acquisitions with a lust to expand into the more profitable areas of medical treatment in developed countries and coastal China. Its operations in the Third World, while noble, are not anything to get excited about as an investor.

RDY's efforts at gaining approval of high-use generic drugs has been accelerated, most recently the FDA's approval of a generic form of Merck's Fosamex for osteoporosis. My mother at aged 98 takes this drug and feels that it has prolonged her agility without pain - along with nine raisins soaked in gin aged two weeks, as per the National Enquirer, for arthritis.

Dr. Reddy's Labs has been immune from Indian government and societal demands because it is a worldwide entity. RDY has entered as many as twenty-four different areas of pharma research and sectors which bodes well for future drug pipelines.

In short, RDY is at the cutting edge of worldwide market expansion, generic imitation and pharma research - just where one would like to invest in this crazy market.

Disclosure: The author does not presently hold a position in RDY.

Source: Ready for Dr. Reddy's Labs