DR. REDDY'S LABORATORIES-ADR (RDY) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:RDY - US2561352038 - ADR
13.35 USD
-0.33 (-2.41%)
13.97 USD
+0.62 (+4.64%)
RDY gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 191 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 correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year RDY was profitable.
RDY had a positive operating cash flow in the past year.
In the past 5 years RDY has always been profitable.
In the past 5 years RDY always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of RDY (10.62%) is better than 91.62% of its industry peers.
With an excellent Return On Equity value of 16.03%, RDY belongs to the best of the industry, outperforming 89.01% of the companies in the same industry.
With an excellent Return On Invested Capital value of 13.03%, RDY belongs to the best of the industry, outperforming 92.15% 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 12.85%.
| 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
The Profit Margin of RDY (16.82%) is better than 89.01% of its industry peers.
RDY's Profit Margin has improved in the last couple of years.
RDY has a Operating Margin of 19.62%. This is amongst the best in the industry. RDY outperforms 86.91% of its industry peers.
In the last couple of years the Operating Margin of RDY has grown nicely.
The Gross Margin of RDY (66.88%) is better than 75.92% 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
RDY has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, RDY has about the same amount of shares outstanding.
The number of shares outstanding for RDY has been increased compared to 5 years ago.
RDY has a worse debt/assets ratio than last year.
2.2 Solvency
RDY has an Altman-Z score of 5.51. This indicates that RDY is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 5.51, RDY is doing good in the industry, outperforming 74.35% of the companies in the same industry.
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 88.48% of its industry peers.
A Debt/Equity ratio of 0.03 indicates that RDY is not too dependend on debt financing.
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 | 5.51 |
ROIC/WACC1.29
WACC10.13%
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.
With a Current ratio value of 1.85, RDY is not doing good in the industry: 63.87% of the companies in the same industry are doing better.
A Quick Ratio of 1.35 indicates that RDY should not have too much problems paying its short term obligations.
RDY's Quick ratio of 1.35 is on the low side compared to the rest of the industry. RDY is outperformed by 67.54% 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.
The Earnings Per Share has been growing by 23.62% 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 14.04% in the last year.
Measured over the past years, RDY shows a quite strong growth in Revenue. The Revenue has been growing by 13.26% on average per year.
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
The Earnings Per Share is expected to decrease by -1.45% on average over the next years.
The Revenue is expected to grow by 6.48% on average over the next years.
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 5Y6.48%
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.
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
The Price/Earnings ratio is 17.34, which indicates a rather expensive current valuation of RDY.
Based on the Price/Earnings ratio, RDY is valued cheaply inside the industry as 83.77% 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 27.00.
The Price/Forward Earnings ratio is 21.02, which indicates a rather expensive current valuation of RDY.
RDY's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. RDY is cheaper than 76.44% of the companies in the same industry.
RDY's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 23.70.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.34 | ||
| Fwd PE | 21.02 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, RDY is valued cheaper than 87.96% of the companies in the same industry.
RDY's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. RDY is cheaper than 77.49% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 54.11 | ||
| EV/EBITDA | 10.65 |
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 0.64%, 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 0.42. RDY pays more dividend than 89.53% of the companies in the same industry.
With a Dividend Yield of 0.64, RDY pays less dividend than the S&P500 average, which is at 1.94.
| 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
11.54% 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%
13.35
-0.33 (-2.41%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners49.42%
Inst Owner Change0%
Ins Owners1.23%
Ins Owner ChangeN/A
Market Cap11.11B
Revenue(TTM)343.10B
Net Income(TTM)57.72B
Analysts57.33
Price Target14.92 (11.76%)
Short Float %1.72%
Short Ratio9.08
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.64% |
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)-0.77%
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 | 17.34 | ||
| Fwd PE | 21.02 | ||
| P/S | 2.91 | ||
| P/FCF | 54.11 | ||
| P/OCF | 16.99 | ||
| P/B | 2.78 | ||
| P/tB | 4.08 | ||
| EV/EBITDA | 10.65 |
EPS(TTM)0.77
EY5.77%
EPS(NY)0.64
Fwd EY4.76%
FCF(TTM)0.25
FCFY1.85%
OCF(TTM)0.79
OCFY5.89%
SpS4.58
BVpS4.81
TBVpS3.27
PEG (NY)N/A
PEG (5Y)0.73
Graham Number9.13
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 | 5.51 |
F-Score4
WACC10.13%
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 5Y6.48%
EBIT growth 1Y1.53%
EBIT growth 3Y25.68%
EBIT growth 5Y18.58%
EBIT Next Year13.87%
EBIT Next 3Y6.33%
EBIT Next 5Y9.17%
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%.