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Dr Reddy's Labs: Flat trends loom

THE availability of enhanced equity leeway for foreign institutional investors in the Dr Reddy's Laboratories' stock may not lead to any notable uptrend in the stock.

The RBI has notified that FIIs would be entitled to pick up equity of up to 30 per cent in Dr Reddy's equity. Though the earlier limit of 24 per cent has not been exhausted, the availability of more stock has the potential to enhance FII interest in the stock. More so since Dr Reddy's is amongst the favoured stocks from the stable of Indian pharmaceutical companies. But this may emerge only over a period of time as FIIs may not rush in to pick the stock. In this backdrop, the scope for upside in the sho rt term linked to this development appears to be limited. -- BL Research Bureau