While Dr Reddys Labs has one of the exciting product pipelines in US for next two years and could now see its key product approvals flowing from Q2FY12. Dr Reddys Labs is also confident on strong growth in India and Russia segments. Dr Reddys Labs‘s stock has corrected by 4% in last one month and underperformed the BSE HC index by 7% on back of DEPB withdrawal issue and delay in key product approvals. Dr Reddys Labs‘s stock is currently trading at 22.2x FY12 and 18.2x FY13 recurring earnings. We have revised our estimates downwards marginally to factor in delay in key product approvals and increasing R&D spend. We value Dr Reddys Labs on a SOTP basis with a target price of Rs1,567, valuing the base business at Rs 1,501 (20x Sept’12 recurring earnings) and Rs 66/share for P-IV/ limited competition opportunities. We maintain ‘HOLD’ on the stock of Dr Reddys Labs