DR. REDDY'S LABORATORIES-ADR (RDY) Stock Fundamental Analysis
USA - NYSE:RDY - US2561352038 - ADR
14.36 USD
+0.02 (+0.14%)
14.36 USD
0 (0%)
Taking everything into account, RDY scores 6 out of 10 in our fundamental rating. RDY was compared to 195 industry peers in the Pharmaceuticals industry. RDY scores excellent points on both the profitability and health parts. This is a solid base for a good stock. RDY has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year RDY was profitable.
In the past year RDY had a positive cash flow from operations.
Each year in the past 5 years RDY has been profitable.
In the past 5 years RDY always reported a positive cash flow from operatings.
1.2 Ratios
With an excellent Return On Assets value of 11.44%, RDY belongs to the best of the industry, outperforming 93.33% of the companies in the same industry.
RDY's Return On Equity of 16.86% is amongst the best of the industry. RDY outperforms 90.26% of its industry peers.
RDY's Return On Invested Capital of 14.58% is amongst the best of the industry. RDY outperforms 93.33% of its industry peers.
The Average Return On Invested Capital over the past 3 years for RDY is in line with the industry average of 15.30%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.44% | ||
| ROE | 16.86% | ||
| ROIC | 14.58% |
ROA(3y)13.25%
ROA(5y)10.88%
ROE(3y)18.65%
ROE(5y)15.68%
ROIC(3y)15.26%
ROIC(5y)13.95%
1.3 Margins
Looking at the Profit Margin, with a value of 17.32%, RDY belongs to the top of the industry, outperforming 91.79% 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 21.39%. This is amongst the best in the industry. RDY outperforms 88.72% of its industry peers.
RDY's Operating Margin has improved in the last couple of years.
RDY has a better Gross Margin (69.43%) than 76.41% of its industry peers.
RDY's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.39% | ||
| PM (TTM) | 17.32% | ||
| GM | 69.43% |
OM growth 3Y9.42%
OM growth 5Y4.7%
PM growth 3Y19.59%
PM growth 5Y8.42%
GM growth 3Y2.12%
GM growth 5Y0.39%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so RDY is still creating some value.
Compared to 1 year ago, RDY has about the same amount of shares outstanding.
Compared to 5 years ago, RDY has more shares outstanding
Compared to 1 year ago, RDY has a worse debt to assets ratio.
2.2 Solvency
RDY has an Altman-Z score of 6.37. This indicates that RDY is financially healthy and has little risk of bankruptcy at the moment.
RDY has a better Altman-Z score (6.37) than 80.51% of its industry peers.
RDY has a debt to FCF ratio of 3.89. This is a good value and a sign of high solvency as RDY would need 3.89 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 3.89, RDY belongs to the top of the industry, outperforming 87.69% of the companies in the same industry.
RDY has a Debt/Equity ratio of 0.02. This is a healthy value indicating a solid balance between debt and equity.
RDY has a Debt to Equity ratio (0.02) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.02 | ||
| Debt/FCF | 3.89 | ||
| Altman-Z | 6.37 |
ROIC/WACC1.42
WACC10.25%
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.
Looking at the Current ratio, with a value of 1.92, RDY is doing worse than 61.54% of the companies in the same industry.
RDY has a Quick Ratio of 1.37. This is a normal value and indicates that RDY is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of RDY (1.37) is worse than 64.10% of its industry peers.
The current and quick ratio evaluation for RDY is rather negative, while it does have 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 | 1.37 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 2.10% over the past year.
Measured over the past years, RDY shows a very strong growth in Earnings Per Share. The EPS has been growing by 23.62% on average per year.
The Revenue has grown by 15.79% in the past year. This is quite good.
The Revenue has been growing by 13.26% on average over the past years. This is quite good.
EPS 1Y (TTM)2.1%
EPS 3Y33.55%
EPS 5Y23.62%
EPS Q2Q%1.94%
Revenue 1Y (TTM)15.79%
Revenue growth 3Y14.86%
Revenue growth 5Y13.26%
Sales Q2Q%11.38%
3.2 Future
The Earnings Per Share is expected to decrease by -0.85% on average over the next years.
RDY is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.76% yearly.
EPS Next Y-1.71%
EPS Next 2Y-7.64%
EPS Next 3Y-0.85%
EPS Next 5YN/A
Revenue Next Year6.3%
Revenue Next 2Y4.13%
Revenue Next 3Y5.56%
Revenue Next 5Y6.76%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 18.65, the valuation of RDY can be described as rather expensive.
Based on the Price/Earnings ratio, RDY is valued cheaply inside the industry as 84.10% of the companies are valued more expensively.
RDY's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.35.
A Price/Forward Earnings ratio of 22.01 indicates a rather expensive valuation of RDY.
Based on the Price/Forward Earnings ratio, RDY is valued a bit cheaper than 72.82% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.86, RDY is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.65 | ||
| Fwd PE | 22.01 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of RDY indicates a rather cheap valuation: RDY is cheaper than 87.18% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of RDY indicates a somewhat cheap valuation: RDY is cheaper than 76.41% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 88.14 | ||
| EV/EBITDA | 11.49 |
4.3 Compensation for Growth
The excellent profitability rating of RDY may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.79
EPS Next 2Y-7.64%
EPS Next 3Y-0.85%
5. Dividend
5.1 Amount
With a yearly dividend of 0.64%, 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 6.60. RDY pays more dividend than 88.72% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.44, RDY's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.64% |
5.2 History
The dividend of RDY decreases each year by -19.44%.
RDY has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)-19.44%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
11.78% 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.
DP11.78%
EPS Next 2Y-7.64%
EPS Next 3Y-0.85%
14.36
+0.02 (+0.14%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners50.91%
Inst Owner Change0%
Ins Owners21.86%
Ins Owner ChangeN/A
Market Cap11.95B
Analysts57.33
Price Target15.12 (5.29%)
Short Float %1.7%
Short Ratio9.03
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.64% |
Yearly Dividend0.09
Dividend Growth(5Y)-19.44%
DP11.78%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.24%
Min EPS beat(2)-3.24%
Max EPS beat(2)2.77%
EPS beat(4)2
Avg EPS beat(4)-1.72%
Min EPS beat(4)-13.1%
Max EPS beat(4)6.71%
EPS beat(8)6
Avg EPS beat(8)8.02%
EPS beat(12)10
Avg EPS beat(12)18.2%
EPS beat(16)11
Avg EPS beat(16)9.88%
Revenue beat(2)1
Avg Revenue beat(2)0.29%
Min Revenue beat(2)-0.42%
Max Revenue beat(2)1%
Revenue beat(4)3
Avg Revenue beat(4)1.75%
Min Revenue beat(4)-0.42%
Max Revenue beat(4)3.62%
Revenue beat(8)5
Avg Revenue beat(8)1.05%
Revenue beat(12)8
Avg Revenue beat(12)2.01%
Revenue beat(16)10
Avg Revenue beat(16)1.72%
PT rev (1m)0.21%
PT rev (3m)0.36%
EPS NQ rev (1m)-5.03%
EPS NQ rev (3m)-5.03%
EPS NY rev (1m)0.16%
EPS NY rev (3m)-8.24%
Revenue NQ rev (1m)1.62%
Revenue NQ rev (3m)1.62%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-2.64%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.65 | ||
| Fwd PE | 22.01 | ||
| P/S | 3.25 | ||
| P/FCF | 88.14 | ||
| P/OCF | 22.84 | ||
| P/B | 3.16 | ||
| P/tB | 4.7 | ||
| EV/EBITDA | 11.49 |
EPS(TTM)0.77
EY5.36%
EPS(NY)0.65
Fwd EY4.54%
FCF(TTM)0.16
FCFY1.13%
OCF(TTM)0.63
OCFY4.38%
SpS4.42
BVpS4.54
TBVpS3.05
PEG (NY)N/A
PEG (5Y)0.79
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.44% | ||
| ROE | 16.86% | ||
| ROCE | 19.19% | ||
| ROIC | 14.58% | ||
| ROICexc | 17.52% | ||
| ROICexgc | 27.51% | ||
| OM | 21.39% | ||
| PM (TTM) | 17.32% | ||
| GM | 69.43% | ||
| FCFM | 3.69% |
ROA(3y)13.25%
ROA(5y)10.88%
ROE(3y)18.65%
ROE(5y)15.68%
ROIC(3y)15.26%
ROIC(5y)13.95%
ROICexc(3y)19.62%
ROICexc(5y)17.62%
ROICexgc(3y)25.36%
ROICexgc(5y)22.59%
ROCE(3y)21.22%
ROCE(5y)19.86%
ROICexcg growth 3Y6.58%
ROICexcg growth 5Y2.58%
ROICexc growth 3Y0.6%
ROICexc growth 5Y-0.12%
OM growth 3Y9.42%
OM growth 5Y4.7%
PM growth 3Y19.59%
PM growth 5Y8.42%
GM growth 3Y2.12%
GM growth 5Y0.39%
F-Score3
Asset Turnover0.66
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.02 | ||
| Debt/FCF | 3.89 | ||
| Debt/EBITDA | 0.09 | ||
| Cap/Depr | 201.9% | ||
| Cap/Sales | 10.54% | ||
| Interest Coverage | 20.05 | ||
| Cash Conversion | 53.44% | ||
| Profit Quality | 21.27% | ||
| Current Ratio | 1.92 | ||
| Quick Ratio | 1.37 | ||
| Altman-Z | 6.37 |
F-Score3
WACC10.25%
ROIC/WACC1.42
Cap/Depr(3y)179.81%
Cap/Depr(5y)161.03%
Cap/Sales(3y)9.33%
Cap/Sales(5y)8.68%
Profit Quality(3y)47.43%
Profit Quality(5y)60.48%
High Growth Momentum
Growth
EPS 1Y (TTM)2.1%
EPS 3Y33.55%
EPS 5Y23.62%
EPS Q2Q%1.94%
EPS Next Y-1.71%
EPS Next 2Y-7.64%
EPS Next 3Y-0.85%
EPS Next 5YN/A
Revenue 1Y (TTM)15.79%
Revenue growth 3Y14.86%
Revenue growth 5Y13.26%
Sales Q2Q%11.38%
Revenue Next Year6.3%
Revenue Next 2Y4.13%
Revenue Next 3Y5.56%
Revenue Next 5Y6.76%
EBIT growth 1Y8.16%
EBIT growth 3Y25.68%
EBIT growth 5Y18.58%
EBIT Next Year18.8%
EBIT Next 3Y6.18%
EBIT Next 5Y10.31%
FCF growth 1Y-33.16%
FCF growth 3Y9.92%
FCF growth 5Y-12.7%
OCF growth 1Y2.19%
OCF growth 3Y18.21%
OCF growth 5Y9.24%