DR. REDDY'S LABORATORIES-ADR (RDY)
US2561352038 - ADR
Taking everything into account, RDY scores 7 out of 10 in our fundamental rating. RDY was compared to 194 industry peers in the Pharmaceuticals industry. While RDY belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. RDY may be a bit undervalued, certainly considering the very reasonable score on growth With these ratings, RDY could be worth investigating further for value investing!.
1. Profitability
1.1 Basic Checks
RDY had positive earnings in the past year.
RDY had a positive operating cash flow in the past year.
In the past 5 years RDY has always been profitable.
RDY had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 14.35%, RDY belongs to the top of the industry, outperforming 96.88% of the companies in the same industry.
RDY has a better Return On Equity (19.74%) than 92.19% of its industry peers.
RDY has a better Return On Invested Capital (16.76%) than 93.75% 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 42.22%.
The 3 year average ROIC (14.78%) for RDY is below the current ROIC(16.76%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.35% | ||
| ROE | 19.74% | ||
| ROIC | 16.76% |
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
With an excellent Profit Margin value of 19.91%, RDY belongs to the best of the industry, outperforming 93.75% of the companies in the same industry.
In the last couple of years the Profit Margin of RDY has grown nicely.
Looking at the Operating Margin, with a value of 23.05%, RDY belongs to the top of the industry, outperforming 90.10% of the companies in the same industry.
In the last couple of years the Operating Margin of RDY has grown nicely.
RDY has a better Gross Margin (70.69%) than 76.56% of its industry peers.
RDY's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 23.05% | ||
| PM (TTM) | 19.91% | ||
| 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), RDY is creating some value.
RDY has more shares outstanding than it did 1 year ago.
The number of shares outstanding for RDY has been increased compared to 5 years ago.
The debt/assets ratio for RDY is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.89 indicates that RDY is not in any danger for bankruptcy at the moment.
The Altman-Z score of RDY (3.89) is better than 76.56% of its industry peers.
The Debt to FCF ratio of RDY is 1.11, which is an excellent value as it means it would take RDY, only 1.11 years of fcf income to pay off all of its debts.
RDY has a Debt to FCF ratio of 1.11. This is amongst the best in the industry. RDY outperforms 95.83% 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 54.17% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.02 | ||
| Debt/FCF | 1.11 | ||
| Altman-Z | 3.89 |
ROIC/WACC1.7
WACC9.83%
2.3 Liquidity
A Current Ratio of 2.59 indicates that RDY has no problem at all paying its short term obligations.
RDY has a Current ratio (2.59) which is in line with its industry peers.
RDY has a Quick 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.
The Quick ratio of RDY (1.92) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.59 | ||
| Quick Ratio | 1.92 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 487.69% 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 24.21% on average per year.
RDY shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.52%.
Measured over the past years, RDY shows a quite strong growth in Revenue. The Revenue has been growing by 12.64% on average per year.
EPS 1Y (TTM)487.69%
EPS 3Y42.67%
EPS 5Y24.21%
EPS Q2Q%394.78%
Revenue 1Y (TTM)10.52%
Revenue growth 3Y13.72%
Revenue growth 5Y12.64%
Sales Q2Q%13.88%
3.2 Future
The Earnings Per Share is expected to decrease by -4.70% on average over the next years.
The Revenue is expected to grow by 7.23% on average over the next years.
EPS Next Y4.76%
EPS Next 2Y4.19%
EPS Next 3Y-4.7%
EPS Next 5YN/A
Revenue Next Year12.28%
Revenue Next 2Y10.3%
Revenue Next 3Y5.67%
Revenue Next 5Y7.23%
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
With a Price/Earnings ratio of 0.71, the valuation of RDY can be described as very cheap.
Based on the Price/Earnings ratio, RDY is valued cheaply inside the industry as 98.96% of the companies are valued more expensively.
RDY is valuated cheaply when we compare the Price/Earnings ratio to 28.96, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 3.25 indicates a rather cheap valuation of RDY.
RDY's Price/Forward Earnings ratio is rather cheap when compared to the industry. RDY is cheaper than 97.92% of the companies in the same industry.
RDY's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 23.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 0.71 | ||
| Fwd PE | 3.25 |
4.2 Price Multiples
97.40% of the companies in the same industry are more expensive than RDY, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, RDY is valued cheaper than 90.63% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.92 | ||
| EV/EBITDA | 0.76 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
RDY has an outstanding profitability rating, which may justify a higher PE ratio.
RDY's earnings are expected to decrease with -4.70% in the coming years. This may justify a cheaper valuation.
PEG (NY)0.15
PEG (5Y)0.03
EPS Next 2Y4.19%
EPS Next 3Y-4.7%
5. Dividend
5.1 Amount
RDY has a yearly dividend return of 0.65%, which is pretty low.
Compared to an average industry Dividend Yield of 4.28, RDY pays a better dividend. On top of this RDY pays more dividend than 89.58% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.23, RDY's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.65% |
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
RDY pays out 11.92% of its income as dividend. This is a sustainable payout ratio.
The Dividend Rate of RDY has been decling, while earnings will also be declining. This means the current dividend is most likely not sustainable.
DP11.92%
EPS Next 2Y4.19%
EPS Next 3Y-4.7%
DR. REDDY'S LABORATORIES-ADR
NYSE:RDY (11/21/2024, 8:04:00 PM)
After market: 13.99 0 (0%)13.99
-0.31 (-2.17%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap2.33B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.65% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 0.71 | ||
| Fwd PE | 3.25 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.15
PEG (5Y)0.03
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.35% | ||
| ROE | 19.74% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 23.05% | ||
| PM (TTM) | 19.91% | ||
| GM | 70.69% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.72
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.02 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 2.59 | ||
| Quick Ratio | 1.92 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)487.69%
EPS 3Y42.67%
EPS 5Y
EPS Q2Q%
EPS Next Y4.76%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)10.52%
Revenue growth 3Y13.72%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y