DR. REDDY'S LABORATORIES-ADR (RDY) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:RDY - US2561352038 - ADR
13.3 USD
+0.08 (+0.61%)
13.3 USD
0 (0%)
We assign a fundamental rating of 6 out of 10 to RDY. RDY was compared to 190 industry peers in the Pharmaceuticals industry. RDY has an excellent profitability rating, but there are some minor concerns on its financial health. RDY is not valued too expensively and it also shows a decent growth rate.
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.
- RDY had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- With an excellent Return On Assets value of 10.62%, RDY belongs to the best of the industry, outperforming 91.58% of the companies in the same industry.
- RDY has a better Return On Equity (16.03%) than 88.95% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 13.03%, RDY belongs to the top of the industry, outperforming 92.11% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for RDY is above the industry average of 12.84%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.62% | ||
| ROE | 16.03% | ||
| ROIC | 13.03% |
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
- RDY has a Profit Margin of 16.82%. This is amongst the best in the industry. RDY outperforms 88.95% of its industry peers.
- In the last couple of years the Profit Margin of RDY has grown nicely.
- The Operating Margin of RDY (19.62%) is better than 86.84% of its industry peers.
- RDY's Operating Margin has improved in the last couple of years.
- RDY has a better Gross Margin (66.88%) than 75.79% of its industry peers.
- In the last couple of years the Gross Margin of RDY has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.62% | ||
| PM (TTM) | 16.82% | ||
| GM | 66.88% |
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
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), RDY is creating some value.
- The number of shares outstanding for RDY remains at a similar level compared to 1 year ago.
- 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
- An Altman-Z score of 5.49 indicates that RDY is not in any danger for bankruptcy at the moment.
- RDY's Altman-Z score of 5.49 is fine compared to the rest of the industry. RDY outperforms 75.26% of its industry peers.
- The Debt to FCF ratio of RDY is 3.17, which is a good value as it means it would take RDY, 3.17 years of fcf income to pay off all of its debts.
- RDY has a Debt to FCF ratio of 3.17. This is amongst the best in the industry. RDY outperforms 88.95% of its industry peers.
- RDY has a Debt/Equity ratio of 0.03. This is a healthy value indicating a solid balance between debt and equity.
- RDY has a Debt to Equity ratio (0.03) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.03 | ||
| Debt/FCF | 3.17 | ||
| Altman-Z | 5.49 |
ROIC/WACC1.29
WACC10.12%
2.3 Liquidity
- RDY has a Current Ratio of 1.85. This is a normal value and indicates that RDY is financially healthy and should not expect problems in meeting its short term obligations.
- The Current ratio of RDY (1.85) is worse than 64.74% of its industry peers.
- A Quick Ratio of 1.35 indicates that RDY should not have too much problems paying its short term obligations.
- The Quick ratio of RDY (1.35) is worse than 67.89% 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 | 1.85 | ||
| Quick Ratio | 1.35 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 8.21% over the past year.
- RDY shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 23.62% yearly.
- The Revenue has grown by 14.04% 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)8.21%
EPS 3Y33.55%
EPS 5Y23.62%
EPS Q2Q%7.44%
Revenue 1Y (TTM)14.04%
Revenue growth 3Y14.86%
Revenue growth 5Y13.26%
Sales Q2Q%9.83%
3.2 Future
- Based on estimates for the next years, RDY will show a decrease in Earnings Per Share. The EPS will decrease by -1.45% on average per year.
- RDY is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.63% yearly.
EPS Next Y-6.14%
EPS Next 2Y-8.23%
EPS Next 3Y-1.45%
EPS Next 5YN/A
Revenue Next Year5.1%
Revenue Next 2Y3.83%
Revenue Next 3Y5.5%
Revenue Next 5Y6.63%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
- 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 17.27, RDY is valued on the expensive side.
- Based on the Price/Earnings ratio, RDY is valued cheaper than 84.21% of the companies in the same industry.
- RDY is valuated rather cheaply when we compare the Price/Earnings ratio to 27.33, which is the current average of the S&P500 Index.
- The Price/Forward Earnings ratio is 21.01, which indicates a rather expensive current valuation of RDY.
- Based on the Price/Forward Earnings ratio, RDY is valued a bit cheaper than the industry average as 76.84% of the companies are valued more expensively.
- The average S&P500 Price/Forward Earnings ratio is at 24.12. RDY is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.27 | ||
| Fwd PE | 21.01 |
4.2 Price Multiples
- 88.42% of the companies in the same industry are more expensive than RDY, based on the Enterprise Value to EBITDA ratio.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of RDY indicates a somewhat cheap valuation: RDY is cheaper than 77.89% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 54.08 | ||
| EV/EBITDA | 10.57 |
4.3 Compensation for Growth
- The excellent profitability rating of RDY may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.73
EPS Next 2Y-8.23%
EPS Next 3Y-1.45%
5. Dividend
5.1 Amount
- With a yearly dividend of 0.66%, 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 0.35. RDY pays more dividend than 90.53% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.91, RDY's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.66% |
5.2 History
- The dividend of RDY decreases each year by -19.44%.
- RDY has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-19.44%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- 11.54% 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.
DP11.54%
EPS Next 2Y-8.23%
EPS Next 3Y-1.45%
13.3
+0.08 (+0.61%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)10-24 2025-10-24/amc
Earnings (Next)01-21 2026-01-21
Inst Owners49.42%
Inst Owner Change0.01%
Ins Owners1.23%
Ins Owner ChangeN/A
Market Cap11.07B
Revenue(TTM)343.10B
Net Income(TTM)57.72B
Analysts56.89
Price Target14.92 (12.18%)
Short Float %1.72%
Short Ratio9.08
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.66% |
Yearly Dividend0.09
Dividend Growth(5Y)-19.44%
DP11.54%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-7.63%
Min EPS beat(2)-8.52%
Max EPS beat(2)-6.74%
EPS beat(4)1
Avg EPS beat(4)-3.93%
Min EPS beat(4)-8.52%
Max EPS beat(4)2.77%
EPS beat(8)4
Avg EPS beat(8)-0.94%
EPS beat(12)8
Avg EPS beat(12)6.66%
EPS beat(16)10
Avg EPS beat(16)7.01%
Revenue beat(2)0
Avg Revenue beat(2)-2.69%
Min Revenue beat(2)-3.88%
Max Revenue beat(2)-1.51%
Revenue beat(4)1
Avg Revenue beat(4)-1.2%
Min Revenue beat(4)-3.88%
Max Revenue beat(4)1%
Revenue beat(8)4
Avg Revenue beat(8)0.25%
Revenue beat(12)7
Avg Revenue beat(12)1.24%
Revenue beat(16)9
Avg Revenue beat(16)1.2%
PT rev (1m)0.35%
PT rev (3m)-1.34%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-3.06%
EPS NY rev (1m)-0.16%
EPS NY rev (3m)-4.54%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.24%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)-1.13%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.27 | ||
| Fwd PE | 21.01 | ||
| P/S | 2.91 | ||
| P/FCF | 54.08 | ||
| P/OCF | 16.98 | ||
| P/B | 2.77 | ||
| P/tB | 4.07 | ||
| EV/EBITDA | 10.57 |
EPS(TTM)0.77
EY5.79%
EPS(NY)0.63
Fwd EY4.76%
FCF(TTM)0.25
FCFY1.85%
OCF(TTM)0.78
OCFY5.89%
SpS4.57
BVpS4.79
TBVpS3.26
PEG (NY)N/A
PEG (5Y)0.73
Graham Number9.11
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.62% | ||
| ROE | 16.03% | ||
| ROCE | 17.14% | ||
| ROIC | 13.03% | ||
| ROICexc | 16.05% | ||
| ROICexgc | 25.11% | ||
| OM | 19.62% | ||
| PM (TTM) | 16.82% | ||
| GM | 66.88% | ||
| FCFM | 5.38% |
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%
ROICexgc growth 3Y6.58%
ROICexgc 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-Score4
Asset Turnover0.63
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.03 | ||
| Debt/FCF | 3.17 | ||
| Debt/EBITDA | 0.13 | ||
| Cap/Depr | 211.61% | ||
| Cap/Sales | 11.76% | ||
| Interest Coverage | 16.55 | ||
| Cash Conversion | 68.09% | ||
| Profit Quality | 32% | ||
| Current Ratio | 1.85 | ||
| Quick Ratio | 1.35 | ||
| Altman-Z | 5.49 |
F-Score4
WACC10.12%
ROIC/WACC1.29
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)8.21%
EPS 3Y33.55%
EPS 5Y23.62%
EPS Q2Q%7.44%
EPS Next Y-6.14%
EPS Next 2Y-8.23%
EPS Next 3Y-1.45%
EPS Next 5YN/A
Revenue 1Y (TTM)14.04%
Revenue growth 3Y14.86%
Revenue growth 5Y13.26%
Sales Q2Q%9.83%
Revenue Next Year5.1%
Revenue Next 2Y3.83%
Revenue Next 3Y5.5%
Revenue Next 5Y6.63%
EBIT growth 1Y1.53%
EBIT growth 3Y25.68%
EBIT growth 5Y18.58%
EBIT Next Year13.87%
EBIT Next 3Y6.33%
EBIT Next 5Y9.32%
FCF growth 1Y-62.42%
FCF growth 3Y9.92%
FCF growth 5Y-12.7%
OCF growth 1Y-18.43%
OCF growth 3Y18.21%
OCF growth 5Y9.24%
DR. REDDY'S LABORATORIES-ADR / RDY FAQ
What is the ChartMill fundamental rating of DR. REDDY'S LABORATORIES-ADR (RDY) stock?
ChartMill assigns a fundamental rating of 6 / 10 to RDY.
What is the valuation status of DR. REDDY'S LABORATORIES-ADR (RDY) stock?
ChartMill assigns a valuation rating of 5 / 10 to DR. REDDY'S LABORATORIES-ADR (RDY). This can be considered as Fairly Valued.
What is the profitability of RDY stock?
DR. REDDY'S LABORATORIES-ADR (RDY) has a profitability rating of 8 / 10.
Can you provide the expected EPS growth for RDY stock?
The Earnings per Share (EPS) of DR. REDDY'S LABORATORIES-ADR (RDY) is expected to decline by -6.14% in the next year.
Is the dividend of DR. REDDY'S LABORATORIES-ADR sustainable?
The dividend rating of DR. REDDY'S LABORATORIES-ADR (RDY) is 4 / 10 and the dividend payout ratio is 11.54%.