DR. REDDY'S LABORATORIES-ADR (RDY) Fundamental Analysis & Valuation

NYSE:RDY • US2561352038

Current stock price

13.73 USD
+0.27 (+2.01%)
Last:

This RDY fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

8

1. RDY Profitability Analysis

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.
  • In the past 5 years RDY always reported a positive cash flow from operatings.
RDY Yearly Net Income VS EBIT VS OCF VS FCFRDY Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 20B 40B 60B

1.2 Ratios

  • With an excellent Return On Assets value of 10.62%, RDY belongs to the best of the industry, outperforming 92.19% of the companies in the same industry.
  • With an excellent Return On Equity value of 16.03%, RDY belongs to the best of the industry, outperforming 89.06% of the companies in the same industry.
  • Looking at the Return On Invested Capital, with a value of 13.03%, RDY belongs to the top of the industry, outperforming 91.67% of the companies in the same industry.
  • The Average Return On Invested Capital over the past 3 years for RDY is above the industry average of 13.06%.
Industry RankSector 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%
RDY Yearly ROA, ROE, ROICRDY Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 5 10 15

1.3 Margins

  • RDY has a Profit Margin of 16.82%. This is amongst the best in the industry. RDY outperforms 89.06% 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 87.50% of the companies in the same industry.
  • RDY's Operating Margin has improved in the last couple of years.
  • The Gross Margin of RDY (66.88%) is better than 75.52% of its industry peers.
  • RDY's Gross Margin has been stable in the last couple of years.
Industry RankSector 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%
RDY Yearly Profit, Operating, Gross MarginsRDY Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 20 40 60

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7

2. RDY Health Analysis

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.
  • 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.
RDY Yearly Shares OutstandingRDY Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 200M 400M 600M 800M
RDY Yearly Total Debt VS Total AssetsRDY Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 100B 200B 300B 400B

2.2 Solvency

  • An Altman-Z score of 5.72 indicates that RDY is not in any danger for bankruptcy at the moment.
  • RDY's Altman-Z score of 5.72 is amongst the best of the industry. RDY outperforms 81.77% of its industry peers.
  • RDY has a debt to FCF ratio of 3.17. This is a good value and a sign of high solvency as RDY would need 3.17 years to pay back of all of its debts.
  • The Debt to FCF ratio of RDY (3.17) is better than 89.58% 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 RankSector Rank
Debt/Equity 0.03
Debt/FCF 3.17
Altman-Z 5.72
ROIC/WACC1.28
WACC10.14%
RDY Yearly LT Debt VS Equity VS FCFRDY Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 100B 200B 300B

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.
  • RDY has a worse Current ratio (1.85) than 64.06% of its industry peers.
  • 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 67.71% 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 RankSector Rank
Current Ratio 1.85
Quick Ratio 1.35
RDY Yearly Current Assets VS Current LiabilitesRDY Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 50B 100B 150B 200B 250B

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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

4

3. RDY Growth Analysis

3.1 Past

  • The Earnings Per Share has been growing slightly by 3.81% 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 11.06% in the past year. This is quite good.
  • RDY shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 13.26% yearly.
EPS 1Y (TTM)3.81%
EPS 3Y33.55%
EPS 5Y23.62%
EPS Q2Q%-14.29%
Revenue 1Y (TTM)11.06%
Revenue growth 3Y14.86%
Revenue growth 5Y13.26%
Sales Q2Q%4.44%

3.2 Future

  • RDY is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -1.22% yearly.
  • Based on estimates for the next years, RDY will show a small growth in Revenue. The Revenue will grow by 6.56% on average per year.
EPS Next Y-7.04%
EPS Next 2Y-8.78%
EPS Next 3Y-1.22%
EPS Next 5YN/A
Revenue Next Year6.48%
Revenue Next 2Y4.7%
Revenue Next 3Y6.26%
Revenue Next 5Y6.56%

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.
RDY Yearly Revenue VS EstimatesRDY Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 100B 200B 300B 400B
RDY Yearly EPS VS EstimatesRDY Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 20 40 60

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5

4. RDY Valuation Analysis

4.1 Price/Earnings Ratio

  • With a Price/Earnings ratio of 19.34, RDY is valued on the expensive side.
  • Compared to the rest of the industry, the Price/Earnings ratio of RDY indicates a rather cheap valuation: RDY is cheaper than 83.33% of the companies listed in the same industry.
  • The average S&P500 Price/Earnings ratio is at 24.75. RDY is valued slightly cheaper when compared to this.
  • The Price/Forward Earnings ratio is 23.04, which indicates a rather expensive current valuation of RDY.
  • Compared to the rest of the industry, the Price/Forward Earnings ratio of RDY indicates a somewhat cheap valuation: RDY is cheaper than 76.56% of the companies listed in the same industry.
  • When comparing the Price/Forward Earnings ratio of RDY to the average of the S&P500 Index (22.10), we can say RDY is valued inline with the index average.
Industry RankSector Rank
PE 19.34
Fwd PE 23.04
RDY Price Earnings VS Forward Price EarningsRDY Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40 50

4.2 Price Multiples

  • Based on the Enterprise Value to EBITDA ratio, RDY is valued cheaper than 84.90% of the companies in the same industry.
  • 76.04% of the companies in the same industry are more expensive than RDY, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 58.61
EV/EBITDA 11.37
RDY Per share dataRDY EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 1 2 3 4

4.3 Compensation for Growth

  • The excellent profitability rating of RDY may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.82
EPS Next 2Y-8.78%
EPS Next 3Y-1.22%

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4

5. RDY Dividend Analysis

5.1 Amount

  • With a yearly dividend of 0.61%, 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 0.70. RDY pays more dividend than 89.06% of the companies in the same industry.
  • Compared to an average S&P500 Dividend Yield of 1.89, RDY's dividend is way lower than the S&P500 average.
Industry RankSector Rank
Dividend Yield 0.61%

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
RDY Yearly Dividends per shareRDY Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2 4 6 8

5.3 Sustainability

  • 11.54% of the earnings are spent on dividend by RDY. This is a low number and 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-8.78%
EPS Next 3Y-1.22%
RDY Yearly Income VS Free CF VS DividendRDY Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 20B 40B
RDY Dividend Payout.RDY Dividend Payout, showing the Payout Ratio.RDY Dividend Payout.PayoutRetained Earnings

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RDY Fundamentals: All Metrics, Ratios and Statistics

DR. REDDY'S LABORATORIES-ADR

NYSE:RDY (3/31/2026, 10:01:40 AM)

13.73

+0.27 (+2.01%)

Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)01-21
Earnings (Next)05-07
Inst Owners52.01%
Inst Owner Change0.3%
Ins Owners1.23%
Ins Owner Change0%
Market Cap11.43B
Revenue(TTM)346.82B
Net Income(TTM)57.72B
Analysts67.27
Price Target15.24 (11%)
Short Float %2.34%
Short Ratio6.44
Dividend
Industry RankSector Rank
Dividend Yield 0.61%
Yearly Dividend0.08
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%
PT rev (3m)2.13%
EPS NQ rev (1m)0.02%
EPS NQ rev (3m)-3.66%
EPS NY rev (1m)-0.75%
EPS NY rev (3m)-0.94%
Revenue NQ rev (1m)-0.43%
Revenue NQ rev (3m)-1.38%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.31%
Valuation
Industry RankSector Rank
PE 19.34
Fwd PE 23.04
P/S 3.16
P/FCF 58.61
P/OCF 18.41
P/B 3.01
P/tB 4.42
EV/EBITDA 11.37
EPS(TTM)0.71
EY5.17%
EPS(NY)0.6
Fwd EY4.34%
FCF(TTM)0.23
FCFY1.71%
OCF(TTM)0.75
OCFY5.43%
SpS4.35
BVpS4.57
TBVpS3.11
PEG (NY)N/A
PEG (5Y)0.82
Graham Number8.54
Profitability
Industry RankSector 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 RankSector 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 5.72
F-Score4
WACC10.14%
ROIC/WACC1.28
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)3.81%
EPS 3Y33.55%
EPS 5Y23.62%
EPS Q2Q%-14.29%
EPS Next Y-7.04%
EPS Next 2Y-8.78%
EPS Next 3Y-1.22%
EPS Next 5YN/A
Revenue 1Y (TTM)11.06%
Revenue growth 3Y14.86%
Revenue growth 5Y13.26%
Sales Q2Q%4.44%
Revenue Next Year6.48%
Revenue Next 2Y4.7%
Revenue Next 3Y6.26%
Revenue Next 5Y6.56%
EBIT growth 1Y1.53%
EBIT growth 3Y25.68%
EBIT growth 5Y18.58%
EBIT Next Year11.9%
EBIT Next 3Y6.94%
EBIT Next 5Y9.33%
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 Fundamental Analysis 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 -7.04% 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%.