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%)
Taking everything into account, RDY scores 6 out of 10 in our fundamental rating. RDY was compared to 192 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
- In the past year RDY was profitable.
- RDY had a positive operating cash flow in the past year.
- Each year in the past 5 years RDY has 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 91.58% of its industry peers.
- Looking at the Return On Equity, with a value of 16.03%, RDY belongs to the top of the industry, outperforming 88.95% of the companies in the same industry.
- RDY has a better Return On Invested Capital (13.03%) than 92.11% of its industry peers.
- RDY had an Average Return On Invested Capital over the past 3 years of 15.26%. This 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
- With an excellent Profit Margin value of 16.82%, RDY belongs to the best of the industry, outperforming 88.95% of the companies in the same industry.
- 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.
- In the last couple of years the Operating Margin of RDY has grown nicely.
- The Gross Margin of RDY (66.88%) is better than 75.79% 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
- 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
- The debt/assets ratio for RDY is higher compared to a year ago.
2.2 Solvency
- An Altman-Z score of 5.46 indicates that RDY is not in any danger for bankruptcy at the moment.
- RDY has a better Altman-Z score (5.46) than 75.26% 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.
- With an excellent Debt to FCF ratio value of 3.17, RDY belongs to the best of the industry, outperforming 88.95% of the companies in the same industry.
- A Debt/Equity ratio of 0.03 indicates that RDY is not too dependend on debt financing.
- RDY has a Debt to Equity ratio of 0.03. This is comparable to the rest of the industry: RDY outperforms 53.68% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.03 | ||
| Debt/FCF | 3.17 | ||
| Altman-Z | 5.46 |
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.
- RDY has a worse Current ratio (1.85) 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.
- RDY has a worse Quick ratio (1.35) 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
- 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.
- Measured over the past years, RDY shows a very strong growth in Earnings Per Share. The EPS has been growing by 23.62% on average per year.
- 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
- RDY is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -1.45% yearly.
- The Revenue is expected to grow by 6.63% 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 5Y6.63%
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
- The Price/Earnings ratio is 16.78, which indicates a correct valuation of RDY.
- Based on the Price/Earnings ratio, RDY is valued cheaply inside the industry as 83.68% of the companies are valued more expensively.
- When comparing the Price/Earnings ratio of RDY to the average of the S&P500 Index (27.47), we can say RDY is valued slightly cheaper.
- Based on the Price/Forward Earnings ratio of 20.42, the valuation of RDY can be described as rather expensive.
- 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 24.26. RDY is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.78 | ||
| Fwd PE | 20.42 |
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.
- Based on the Price/Free Cash Flow ratio, RDY is valued a bit cheaper than the industry average as 77.89% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 52.58 | ||
| EV/EBITDA | 10.47 |
4.3 Compensation for Growth
- The excellent profitability rating of RDY may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.71
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.
- Compared to an average industry Dividend Yield of 0.40, RDY pays a better dividend. On top of this RDY pays more dividend than 90.53% of the companies listed in the same industry.
- With a Dividend Yield of 0.50, RDY pays less dividend than the S&P500 average, which is at 1.87.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.5% |
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
- 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 Change0.01%
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 | 16.78 | ||
| Fwd PE | 20.42 | ||
| P/S | 2.83 | ||
| P/FCF | 52.58 | ||
| P/OCF | 16.51 | ||
| P/B | 2.7 | ||
| P/tB | 3.96 | ||
| EV/EBITDA | 10.47 |
EPS(TTM)0.77
EY5.96%
EPS(NY)0.63
Fwd EY4.9%
FCF(TTM)0.25
FCFY1.9%
OCF(TTM)0.78
OCFY6.06%
SpS4.56
BVpS4.79
TBVpS3.26
PEG (NY)N/A
PEG (5Y)0.71
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 | 5.46 |
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%.