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%)
13.35 USD
0 (0%)
We assign a fundamental rating of 6 out of 10 to RDY. RDY was compared to 191 industry peers in the Pharmaceuticals industry. While RDY belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. RDY has a decent growth rate and is not valued too expensively.
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.
Each year in the past 5 years RDY has been profitable.
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 91.62% of the companies in the same industry.
RDY's Return On Equity of 16.03% is amongst the best of the industry. RDY outperforms 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.
RDY had an Average Return On Invested Capital over the past 3 years of 15.26%. This 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.
In the last couple of years the Profit Margin of RDY has grown nicely.
The Operating Margin of RDY (19.62%) is better than 86.91% of its industry peers.
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.
RDY has about the same amout of shares outstanding than it did 1 year ago.
RDY has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, RDY has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 5.59 indicates that RDY is not in any danger for bankruptcy at the moment.
RDY's Altman-Z score of 5.59 is fine compared to the rest of the industry. RDY outperforms 74.87% 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.
The Debt to FCF ratio of RDY (3.17) is better than 88.48% of its industry peers.
A Debt/Equity ratio of 0.03 indicates that RDY is not too dependend on debt financing.
RDY's Debt to Equity ratio of 0.03 is in line compared to the rest of the industry. RDY outperforms 53.93% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.03 | ||
| Debt/FCF | 3.17 | ||
| Altman-Z | 5.59 |
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.
RDY has a Current ratio of 1.85. This is in the lower half of the industry: RDY underperforms 63.87% 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 67.54% 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
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 6.48% 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 5Y6.48%
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.
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 17.34, 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 83.25% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of RDY to the average of the S&P500 Index (27.00), we can say RDY is valued slightly cheaper.
The Price/Forward Earnings ratio is 21.00, which indicates a rather expensive current valuation of RDY.
76.44% of the companies in the same industry are more expensive than RDY, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 23.70. RDY is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.34 | ||
| Fwd PE | 21 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, RDY is valued cheaply inside the industry as 86.39% of the companies are valued more expensively.
77.49% 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 | 54.06 | ||
| EV/EBITDA | 10.93 |
4.3 Compensation for Growth
RDY has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.73
EPS Next 2Y-8.23%
EPS Next 3Y-1.45%
5. Dividend
5.1 Amount
RDY has a yearly dividend return of 0.64%, which is pretty low.
Compared to an average industry Dividend Yield of 0.42, RDY pays a better dividend. On top of this RDY pays more dividend than 89.53% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 1.94, RDY's dividend is way lower than the S&P500 average.
| 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.
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%
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 | ||
| P/S | 2.91 | ||
| P/FCF | 54.06 | ||
| P/OCF | 16.98 | ||
| P/B | 2.77 | ||
| P/tB | 4.07 | ||
| EV/EBITDA | 10.93 |
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%
SpS4.59
BVpS4.81
TBVpS3.28
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 | 5.59 |
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%.