If you missed out on my call of Indian pharmaceuticals company Dr. Reddy's Laboratories (NYSE:RDY) as a turnaround candidate earlier this year, you might be getting a second chance. For while Dr. Reddy's still looks like a decent idea in the generics space, Indian stocks have gotten hammered of late, and Dr. Reddy's has gone along for the ride.

The fourth-quarter earnings report was a bit mixed. Revenue growth of 29% on an organic basis (up 64% as reported) was certainly positive. Branded drug sales (like Teva (NASDAQ:TEVA), Dr. Reddy's also sells branded drugs) were up 38% overall, and North American results were improved by the contributions of newer drugs like glimpiride and zonisamide. Those latter two are generic versions of Sanofi-Aventis' (NYSE:SNY) Amaryl for diabetes and Zonegran for epilepsy -- a drug with a somewhat convoluted history involving Japan's Dainippon Sumitomo and Eisai and Ireland's Elan (NYSE:ELN).

Though revenue growth was solid, not much of that hit the bottom line. The company saw meaningfully lower gross margins because of lower international sales of branded products, as well as higher revenue contributions from lower-margin territories like Mexico. All in all, the company posted a small loss for the fourth quarter, although net income for the full year was improved.

Hopefully, Dr. Reddy's pipeline will start paying off and re-energize the growth. Two authorized generics from Merck (NYSE:MRK) should launch reasonably soon (versions of Zocor and Proscar). There's also a fair chance that the company will get some sort of settlement from Sanofi-Aventis and Bristol-Myers (NYSE:BMY) on a Plavix patent challenge -- assuming the companies' settlement with Apotex is deemed acceptable by regulators.

As is often the case with turnarounds, Dr. Reddy's doesn't look especially cheap today. And it's also true that the stock has had a pretty fair run in the past year -- even with the roughly 25% correction from its high in early May. But when I look at the potential cash flow growth, it appears that money could still be made here. What's more, there aren't many Indian stocks available to U.S. investors outside of the IT services space, and eventually, this nervousness over emerging markets will pass.

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Fool contributor Stephen Simpson owns shares of Sanofi-Aventis but has no financial interest in any other stocks mentioned (that means he's neither long nor short the shares).