Karvy Stock Broking Limited has maintained ‘Buy’ rating on Dr Reddy’s Laboratories stock with an intraday target of Rs 660.

According to Karvy, day traders can purchase the stock between Rs 645-650 with a strict stop loss of Rs 628. If the stock market remains on positive track, the next target for the day will be above Rs 680.

Shares of the company, on Thursday (May 15), closed at Rs 654.20 on the Bombay Stock Exchange (BSE). The total volume of shares traded at the BSE was 152506. Current EPS and P/E stood at 34.60 and 18.82 respectively. The share price has seen a 52-week high of Rs 760 and a low of Rs 501 on BSE. The share price also touched a high of Rs 685 and Rs 647.70 during the day.

The outlook for the stock is really very strong, and it is expected to rise on the back of huge volumes.

Dr Reddy’s Laboratories has allotted the company’s 2,870 equity shares of Rs 5 each on May 03, 2008, to employees who have exercised their stock options. The allotment has been made under the company’s Employees Stock Option Scheme (ESOP), 2002.

Besides, the compensation committee of the board of directors of the company allotted 17,604 ADRs of Rs 5 each on May 03, 2008, to the US employees who have exercised their ADR stock options, under Dr. Reddy`s Employees ADR Stock Option Scheme, 2007.

On April 30, the company has also signed up a definitive agreement in order to acquire BASF’s pharmaceutical contract manufacturing business and related facility in Shreveport, Louisiana, USA. The transaction is likely to be finished within the first quarter of fiscal year 2008-09.

The company will fund the acquisition using internal cash reserves or other committed credit facilities. The acquisition of BASF`s finished dosage manufacturing facility in the US will enable Dr Reddy’s to strengthen supply chain for North America.

Dr Reddy’s board meeting will be held on May 20, 2008, to consider and take on record the Audited Financial Results of the Company for the year ended March 31, 2008 and recommend the payment of dividend for the financial year 2007-08.

Other stocks from the same sector that looks good for short-term trading includes Sun Pharma, Ranbaxy Labs, Cipla and Glenmark.