DR. REDDY'S LABORATORIES-ADR (RDY) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:RDY - US2561352038 - ADR
12.92 USD
-0.17 (-1.3%)
12.92 USD
0 (0%)
Overall RDY gets a fundamental rating of 6 out of 10. We evaluated RDY 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.
- In the past year RDY had a positive cash flow from operations.
- In the past 5 years RDY has always been profitable.
- Each year in the past 5 years RDY had a positive operating cash flow.
1.2 Ratios
- RDY has a Return On Assets of 10.62%. This is amongst the best in the industry. RDY outperforms 91.62% of its industry peers.
- RDY has a better Return On Equity (16.03%) than 89.01% 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 92.15% 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 12.84%.
| 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
- The Profit Margin of RDY (16.82%) is better than 89.01% of its industry peers.
- In the last couple of years the Profit Margin of RDY has grown nicely.
- Looking at the Operating Margin, with a value of 19.62%, RDY belongs to the top of the industry, outperforming 86.91% of the companies in the same industry.
- RDY's Operating Margin has improved in the last couple of years.
- RDY's Gross Margin of 66.88% is fine compared to the rest of the industry. RDY outperforms 75.92% of its industry peers.
- RDY's Gross Margin has been stable in the last couple of years.
| 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
- 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
- RDY has a worse debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 5.44 indicates that RDY is not in any danger for bankruptcy at the moment.
- RDY's Altman-Z score of 5.44 is fine compared to the rest of the industry. RDY outperforms 75.39% 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's Debt to FCF ratio of 3.17 is amongst the best of the industry. RDY outperforms 89.01% 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 of 0.03. This is comparable to the rest of the industry: RDY outperforms 54.45% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.03 | ||
| Debt/FCF | 3.17 | ||
| Altman-Z | 5.44 |
ROIC/WACC1.29
WACC10.08%
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.
- Looking at the Current ratio, with a value of 1.85, RDY is doing worse than 64.40% of the companies in the same industry.
- RDY has a Quick Ratio of 1.35. This is a normal value and indicates that RDY is financially healthy and should not expect problems in meeting its short term obligations.
- RDY has a worse Quick ratio (1.35) than 67.54% 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 | 1.85 | ||
| Quick Ratio | 1.35 |
3. Growth
3.1 Past
- RDY shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 8.21%, which is quite good.
- The Earnings Per Share has been growing by 23.62% on average over the past years. This is a very strong growth
- RDY shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.04%.
- 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
- RDY is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -1.45% yearly.
- Based on estimates for the next years, RDY will show a small growth in Revenue. The Revenue will grow by 6.63% on average per year.
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.
- 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
- With a Price/Earnings ratio of 17.00, RDY is valued on the expensive side.
- Based on the Price/Earnings ratio, RDY is valued cheaply inside the industry as 84.29% of the companies are valued more expensively.
- Compared to an average S&P500 Price/Earnings ratio of 27.38, RDY is valued a bit cheaper.
- A Price/Forward Earnings ratio of 20.52 indicates a rather expensive valuation of RDY.
- Based on the Price/Forward Earnings ratio, RDY is valued a bit cheaper than 76.96% of the companies in the same industry.
- RDY is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 24.29, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17 | ||
| Fwd PE | 20.52 |
4.2 Price Multiples
- 89.01% of the companies in the same industry are more expensive than RDY, based on the Enterprise Value to EBITDA ratio.
- 78.01% of the companies in the same industry are more expensive than RDY, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 52.83 | ||
| EV/EBITDA | 10.38 |
4.3 Compensation for Growth
- RDY has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.72
EPS Next 2Y-8.23%
EPS Next 3Y-1.45%
5. Dividend
5.1 Amount
- RDY has a yearly dividend return of 0.50%, which is pretty low.
- RDY's Dividend Yield is rather good when compared to the industry average which is at 0.40. RDY pays more dividend than 89.01% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.84, RDY's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.5% |
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
- RDY pays out 11.54% 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.
DP11.54%
EPS Next 2Y-8.23%
EPS Next 3Y-1.45%
12.92
-0.17 (-1.3%)
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 Change0.02%
Ins Owners1.23%
Ins Owner ChangeN/A
Market Cap10.76B
Revenue(TTM)343.10B
Net Income(TTM)57.72B
Analysts56.89
Price Target14.92 (15.48%)
Short Float %1.72%
Short Ratio9.08
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.5% |
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 | ||
| Fwd PE | 20.52 | ||
| P/S | 2.84 | ||
| P/FCF | 52.83 | ||
| P/OCF | 16.59 | ||
| P/B | 2.71 | ||
| P/tB | 3.98 | ||
| EV/EBITDA | 10.38 |
EPS(TTM)0.76
EY5.88%
EPS(NY)0.63
Fwd EY4.87%
FCF(TTM)0.24
FCFY1.89%
OCF(TTM)0.78
OCFY6.03%
SpS4.54
BVpS4.77
TBVpS3.25
PEG (NY)N/A
PEG (5Y)0.72
Graham Number9.03
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 | 5.44 |
F-Score4
WACC10.08%
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%.