DR. REDDY'S LABORATORIES-ADR (RDY)
US2561352038 - ADR
We assign a fundamental rating of 6 out of 10 to RDY. RDY was compared to 193 industry peers in the Pharmaceuticals industry. RDY has an excellent profitability rating, but there are some minor concerns on its financial health. RDY has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
RDY had positive earnings in the past year.
In the past year RDY had a positive cash flow from operations.
RDY had positive earnings in each of the past 5 years.
In the past 5 years RDY always reported a positive cash flow from operatings.
1.2 Ratios
RDY has a better Return On Assets (11.43%) than 95.81% of its industry peers.
The Return On Equity of RDY (17.36%) is better than 91.62% of its industry peers.
RDY has a better Return On Invested Capital (14.90%) than 92.67% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for RDY is significantly below the industry average of 43.18%.
The 3 year average ROIC (14.78%) for RDY is below the current ROIC(14.90%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.43% | ||
| ROE | 17.36% | ||
| ROIC | 14.9% |
ROA(3y)11.88%
ROA(5y)10.34%
ROE(3y)16.82%
ROE(5y)14.9%
ROIC(3y)14.78%
ROIC(5y)13.87%
1.3 Margins
Looking at the Profit Margin, with a value of 17.75%, RDY belongs to the top of the industry, outperforming 90.58% of the companies in the same industry.
RDY's Profit Margin has improved in the last couple of years.
RDY has a Operating Margin of 22.04%. This is amongst the best in the industry. RDY outperforms 88.48% of its industry peers.
In the last couple of years the Operating Margin of RDY has grown nicely.
The Gross Margin of RDY (70.69%) is better than 76.44% of its industry peers.
RDY's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 22.04% | ||
| PM (TTM) | 17.75% | ||
| GM | 70.69% |
OM growth 3Y9.78%
OM growth 5Y11.65%
PM growth 3Y24.79%
PM growth 5Y9.55%
GM growth 3Y1.28%
GM growth 5Y0.09%
2. Health
2.1 Basic Checks
RDY has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for RDY has been increased compared to 1 year ago.
RDY has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, RDY has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 6.42 indicates that RDY is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 6.42, RDY belongs to the top of the industry, outperforming 83.77% of the companies in the same industry.
RDY has a debt to FCF ratio of 5.77. This is a neutral value as RDY would need 5.77 years to pay back of all of its debts.
RDY has a better Debt to FCF ratio (5.77) than 85.34% of its industry peers.
A Debt/Equity ratio of 0.02 indicates that RDY is not too dependend on debt financing.
RDY has a Debt to Equity ratio of 0.02. This is comparable to the rest of the industry: RDY outperforms 53.40% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.02 | ||
| Debt/FCF | 5.77 | ||
| Altman-Z | 6.42 |
ROIC/WACC1.42
WACC10.46%
2.3 Liquidity
RDY has a Current Ratio of 1.92. This is a normal value and indicates that RDY is financially healthy and should not expect problems in meeting its short term obligations.
RDY's Current ratio of 1.92 is in line compared to the rest of the industry. RDY outperforms 40.31% of its industry peers.
A Quick Ratio of 1.36 indicates that RDY should not have too much problems paying its short term obligations.
The Quick ratio of RDY (1.36) is worse than 70.16% of its industry peers.
RDY does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.92 | ||
| Quick Ratio | 1.36 |
3. Growth
3.1 Past
The earnings per share for RDY have decreased strongly by -70.87% in the last year.
The Earnings Per Share has been growing by 24.21% on average over the past years. This is a very strong growth
Looking at the last year, RDY shows a quite strong growth in Revenue. The Revenue has grown by 12.40% in the last year.
RDY shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 12.64% yearly.
EPS 1Y (TTM)-70.87%
EPS 3Y42.67%
EPS 5Y24.21%
EPS Q2Q%-96.62%
Revenue 1Y (TTM)12.4%
Revenue growth 3Y13.72%
Revenue growth 5Y12.64%
Sales Q2Q%16.45%
3.2 Future
Based on estimates for the next years, RDY will show a very negative growth in Earnings Per Share. The EPS will decrease by -43.62% on average per year.
The Revenue is expected to grow by 6.80% on average over the next years.
EPS Next Y-79.07%
EPS Next 2Y-53.43%
EPS Next 3Y-43.62%
EPS Next 5YN/A
Revenue Next Year12.28%
Revenue Next 2Y10.3%
Revenue Next 3Y7.43%
Revenue Next 5Y6.8%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 6.77, the valuation of RDY can be described as very cheap.
Based on the Price/Earnings ratio, RDY is valued cheaper than 94.24% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.73. RDY is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 18.00, RDY is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of RDY indicates a rather cheap valuation: RDY is cheaper than 81.15% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of RDY to the average of the S&P500 Index (22.83), we can say RDY is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.77 | ||
| Fwd PE | 18 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, RDY is valued cheaply inside the industry as 82.20% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, RDY is valued a bit cheaper than the industry average as 78.01% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 129.47 | ||
| EV/EBITDA | 12.47 |
4.3 Compensation for Growth
The excellent profitability rating of RDY may justify a higher PE ratio.
A cheap valuation may be justified as RDY's earnings are expected to decrease with -43.62% in the coming years.
PEG (NY)N/A
PEG (5Y)0.28
EPS Next 2Y-53.43%
EPS Next 3Y-43.62%
5. Dividend
5.1 Amount
With a yearly dividend of 0.60%, RDY is not a good candidate for dividend investing.
RDY's Dividend Yield is rather good when compared to the industry average which is at 4.42. RDY pays more dividend than 89.53% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.34, RDY's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.6% |
5.2 History
The dividend of RDY decreases each year by -19.81%.
RDY has been paying a dividend for at least 10 years, so it has a reliable track record.
RDY has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)-19.81%
Div Incr Years4
Div Non Decr Years4
5.3 Sustainability
12.48% of the earnings are spent on dividend by RDY. This is a low number and sustainable payout ratio.
RDY's earnings and Dividend Rate are declining. This means the current dividend is most likely not sustainable.
DP12.48%
EPS Next 2Y-53.43%
EPS Next 3Y-43.62%
DR. REDDY'S LABORATORIES-ADR
NYSE:RDY (12/20/2024, 8:04:00 PM)
After market: 15.27 -0.1 (-0.65%)15.37
+0.25 (+1.65%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners49.28%
Inst Owner Change7.09%
Ins Owners21.85%
Ins Owner ChangeN/A
Market Cap12.80B
Analysts56.59
Price Target15.84 (3.06%)
Short Float %N/A
Short Ratio13.51
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.6% |
Dividend Growth(5Y)-19.81%
DP12.48%
Div Incr Years4
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-3.2%
Min EPS beat(2)-13.1%
Max EPS beat(2)6.71%
EPS beat(4)3
Avg EPS beat(4)2.06%
Min EPS beat(4)-13.1%
Max EPS beat(4)9.8%
EPS beat(8)7
Avg EPS beat(8)72.08%
EPS beat(12)9
Avg EPS beat(12)50.75%
EPS beat(16)10
Avg EPS beat(16)32.88%
Revenue beat(2)2
Avg Revenue beat(2)3.2%
Min Revenue beat(2)2.79%
Max Revenue beat(2)3.62%
Revenue beat(4)3
Avg Revenue beat(4)1.71%
Min Revenue beat(4)-1.99%
Max Revenue beat(4)3.62%
Revenue beat(8)6
Avg Revenue beat(8)2.46%
Revenue beat(12)8
Avg Revenue beat(12)2%
Revenue beat(16)9
Avg Revenue beat(16)1.21%
PT rev (1m)-80.29%
PT rev (3m)-79.48%
EPS NQ rev (1m)-79.94%
EPS NQ rev (3m)-77.37%
EPS NY rev (1m)-80.02%
EPS NY rev (3m)-79.98%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)6.16%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.53%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.77 | ||
| Fwd PE | 18 | ||
| P/S | 3.62 | ||
| P/FCF | 129.47 | ||
| P/OCF | 31.96 | ||
| P/B | 3.54 | ||
| P/tB | 5.38 | ||
| EV/EBITDA | 12.47 |
EPS(TTM)2.27
EY14.77%
EPS(NY)0.85
Fwd EY5.55%
FCF(TTM)0.12
FCFY0.77%
OCF(TTM)0.48
OCFY3.13%
SpS4.25
BVpS4.34
TBVpS2.85
PEG (NY)N/A
PEG (5Y)0.28
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.43% | ||
| ROE | 17.36% | ||
| ROCE | 19.61% | ||
| ROIC | 14.9% | ||
| ROICexc | 18.55% | ||
| ROICexgc | 30.29% | ||
| OM | 22.04% | ||
| PM (TTM) | 17.75% | ||
| GM | 70.69% | ||
| FCFM | 2.8% |
ROA(3y)11.88%
ROA(5y)10.34%
ROE(3y)16.82%
ROE(5y)14.9%
ROIC(3y)14.78%
ROIC(5y)13.87%
ROICexc(3y)19.53%
ROICexc(5y)17.63%
ROICexgc(3y)24.1%
ROICexgc(5y)22.07%
ROCE(3y)20.69%
ROCE(5y)19.74%
ROICexcg growth 3Y12.52%
ROICexcg growth 5Y12.86%
ROICexc growth 3Y14.7%
ROICexc growth 5Y16.53%
OM growth 3Y9.78%
OM growth 5Y11.65%
PM growth 3Y24.79%
PM growth 5Y9.55%
GM growth 3Y1.28%
GM growth 5Y0.09%
F-Score3
Asset Turnover0.64
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.02 | ||
| Debt/FCF | 5.77 | ||
| Debt/EBITDA | 0.09 | ||
| Cap/Depr | 168.94% | ||
| Cap/Sales | 8.53% | ||
| Interest Coverage | 22.89 | ||
| Cash Conversion | 41.81% | ||
| Profit Quality | 15.75% | ||
| Current Ratio | 1.92 | ||
| Quick Ratio | 1.36 | ||
| Altman-Z | 6.42 |
F-Score3
WACC10.46%
ROIC/WACC1.42
Cap/Depr(3y)167.01%
Cap/Depr(5y)131.16%
Cap/Sales(3y)8.76%
Cap/Sales(5y)7.27%
Profit Quality(3y)54.18%
Profit Quality(5y)79.65%
High Growth Momentum
Growth
EPS 1Y (TTM)-70.87%
EPS 3Y42.67%
EPS 5Y24.21%
EPS Q2Q%-96.62%
EPS Next Y-79.07%
EPS Next 2Y-53.43%
EPS Next 3Y-43.62%
EPS Next 5YN/A
Revenue 1Y (TTM)12.4%
Revenue growth 3Y13.72%
Revenue growth 5Y12.64%
Sales Q2Q%16.45%
Revenue Next Year12.28%
Revenue Next 2Y10.3%
Revenue Next 3Y7.43%
Revenue Next 5Y6.8%
EBIT growth 1Y6.1%
EBIT growth 3Y24.84%
EBIT growth 5Y25.76%
EBIT Next Year34.37%
EBIT Next 3Y6.72%
EBIT Next 5Y13.86%
FCF growth 1Y-61.54%
FCF growth 3Y-8.04%
FCF growth 5Y-2.41%
OCF growth 1Y-19.62%
OCF growth 3Y8.36%
OCF growth 5Y9.62%