DR. REDDY'S LABORATORIES-ADR (RDY) Stock Fundamental Analysis
NYSE:RDY - New York Stock Exchange, Inc. - US2561352038 - ADR - Currency: USD
Overall RDY gets a fundamental rating of 6 out of 10. We evaluated RDY against 195 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 decent growth rate and is not valued too expensively.
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.
RDY had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
RDY has a better Return On Assets (11.43%) than 95.70% of its industry peers.
RDY has a Return On Equity of 17.36%. This is amongst the best in the industry. RDY outperforms 91.94% of its industry peers.
RDY has a better Return On Invested Capital (14.90%) than 92.47% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for RDY is significantly below the industry average of 43.99%.
The 3 year average ROIC (14.78%) for RDY is below the current ROIC(14.90%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.43% | ||
| ROE | 17.36% | ||
| ROIC | 14.9% |
ROA(3y)11.88%
ROA(5y)10.34%
ROE(3y)16.82%
ROE(5y)14.9%
ROIC(3y)14.78%
ROIC(5y)13.87%
1.3 Margins
RDY's Profit Margin of 17.75% is amongst the best of the industry. RDY outperforms 90.32% of its industry peers.
In the last couple of years the Profit Margin of RDY has grown nicely.
RDY has a better Operating Margin (22.04%) than 88.17% of its industry peers.
RDY's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 70.69%, RDY is in the better half of the industry, outperforming 75.81% of the companies in the same industry.
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 | 22.04% | ||
| PM (TTM) | 17.75% | ||
| GM | 70.69% |
OM growth 3Y9.78%
OM growth 5Y11.65%
PM growth 3Y24.79%
PM growth 5Y9.55%
GM growth 3Y1.28%
GM growth 5Y0.09%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), RDY is creating some value.
RDY has more shares outstanding than it did 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
RDY has an Altman-Z score of 6.00. This indicates that RDY is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 6.00, RDY belongs to the best of the industry, outperforming 82.80% of the companies in the same industry.
RDY has a debt to FCF ratio of 5.77. This is a neutral value as RDY would need 5.77 years to pay back of all of its debts.
RDY has a Debt to FCF ratio of 5.77. This is amongst the best in the industry. RDY outperforms 84.41% of its industry peers.
RDY has a Debt/Equity ratio of 0.02. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of RDY (0.02) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.02 | ||
| Debt/FCF | 5.77 | ||
| Altman-Z | 6 |
ROIC/WACC1.44
WACC10.38%
2.3 Liquidity
A Current Ratio of 1.92 indicates that RDY should not have too much problems paying its short term obligations.
With a Current ratio value of 1.92, RDY is not doing good in the industry: 60.75% of the companies in the same industry are doing better.
A Quick Ratio of 1.36 indicates that RDY should not have too much problems paying its short term obligations.
The Quick ratio of RDY (1.36) is worse than 70.97% 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 | 1.92 | ||
| Quick Ratio | 1.36 |
3. Growth
3.1 Past
RDY shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 2.56%.
The Earnings Per Share has been growing by 24.21% 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 13.54%.
The Revenue has been growing by 12.64% on average over the past years. This is quite good.
EPS 1Y (TTM)2.56%
EPS 3Y42.67%
EPS 5Y24.21%
EPS Q2Q%2.28%
Revenue 1Y (TTM)13.54%
Revenue growth 3Y13.72%
Revenue growth 5Y12.64%
Sales Q2Q%15.81%
3.2 Future
Based on estimates for the next years, RDY will show a decrease in Earnings Per Share. The EPS will decrease by -4.63% on average per year.
RDY is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.10% yearly.
EPS Next Y1.89%
EPS Next 2Y3.86%
EPS Next 3Y-4.63%
EPS Next 5YN/A
Revenue Next Year15.32%
Revenue Next 2Y12.03%
Revenue Next 3Y7.1%
Revenue Next 5Y8.1%
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.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 18.27, the valuation of RDY can be described as rather expensive.
Compared to the rest of the industry, the Price/Earnings ratio of RDY indicates a rather cheap valuation: RDY is cheaper than 86.02% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of RDY to the average of the S&P500 Index (28.28), we can say RDY is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 16.22, the valuation of RDY can be described as correct.
82.26% of the companies in the same industry are more expensive than RDY, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 91.29, RDY is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.27 | ||
| Fwd PE | 16.22 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, RDY is valued cheaper than 83.33% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, RDY is valued a bit cheaper than 78.49% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 115.94 | ||
| EV/EBITDA | 11.07 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of RDY may justify a higher PE ratio.
RDY's earnings are expected to decrease with -4.63% in the coming years. This may justify a cheaper valuation.
PEG (NY)9.66
PEG (5Y)0.75
EPS Next 2Y3.86%
EPS Next 3Y-4.63%
5. Dividend
5.1 Amount
RDY has a yearly dividend return of 0.68%, which is pretty low.
RDY's Dividend Yield is rather good when compared to the industry average which is at 4.29. RDY pays more dividend than 89.25% of the companies in the same industry.
With a Dividend Yield of 0.68, RDY pays less dividend than the S&P500 average, which is at 2.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.68% |
5.2 History
The dividend of RDY decreases each year by -19.81%.
RDY has paid a dividend for at least 10 years, which is a reliable track record.
RDY has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)-19.81%
Div Incr Years4
Div Non Decr Years4
5.3 Sustainability
12.48% 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.
DP12.48%
EPS Next 2Y3.86%
EPS Next 3Y-4.63%
DR. REDDY'S LABORATORIES-ADR
NYSE:RDY (1/29/2025, 8:04:00 PM)
After market: 13.52 0 (0%)13.52
-0.01 (-0.07%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners49.28%
Inst Owner Change44.05%
Ins Owners21.85%
Ins Owner ChangeN/A
Market Cap11.26B
Analysts57.14
Price Target15.63 (15.61%)
Short Float %2.23%
Short Ratio9.75
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.68% |
Yearly Dividend7.99
Dividend Growth(5Y)-19.81%
DP12.48%
Div Incr Years4
Div Non Decr Years4
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-3.2%
Min EPS beat(2)-13.1%
Max EPS beat(2)6.71%
EPS beat(4)3
Avg EPS beat(4)2.06%
Min EPS beat(4)-13.1%
Max EPS beat(4)9.8%
EPS beat(8)7
Avg EPS beat(8)11.96%
EPS beat(12)9
Avg EPS beat(12)10.66%
EPS beat(16)10
Avg EPS beat(16)2.82%
Revenue beat(2)2
Avg Revenue beat(2)3.2%
Min Revenue beat(2)2.79%
Max Revenue beat(2)3.62%
Revenue beat(4)3
Avg Revenue beat(4)1.71%
Min Revenue beat(4)-1.99%
Max Revenue beat(4)3.62%
Revenue beat(8)6
Avg Revenue beat(8)2.46%
Revenue beat(12)8
Avg Revenue beat(12)2%
Revenue beat(16)9
Avg Revenue beat(16)1.21%
PT rev (1m)-0.74%
PT rev (3m)-80.44%
EPS NQ rev (1m)-4.15%
EPS NQ rev (3m)-78.31%
EPS NY rev (1m)-0.69%
EPS NY rev (3m)-80.12%
Revenue NQ rev (1m)1.75%
Revenue NQ rev (3m)8.01%
Revenue NY rev (1m)2.7%
Revenue NY rev (3m)2.87%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.27 | ||
| Fwd PE | 16.22 | ||
| P/S | 3.24 | ||
| P/FCF | 115.94 | ||
| P/OCF | 28.62 | ||
| P/B | 3.17 | ||
| P/tB | 4.82 | ||
| EV/EBITDA | 11.07 |
EPS(TTM)0.74
EY5.47%
EPS(NY)0.83
Fwd EY6.16%
FCF(TTM)0.12
FCFY0.86%
OCF(TTM)0.47
OCFY3.49%
SpS4.17
BVpS4.26
TBVpS2.8
PEG (NY)9.66
PEG (5Y)0.75
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.43% | ||
| ROE | 17.36% | ||
| ROCE | 19.61% | ||
| ROIC | 14.9% | ||
| ROICexc | 18.55% | ||
| ROICexgc | 30.29% | ||
| OM | 22.04% | ||
| PM (TTM) | 17.75% | ||
| GM | 70.69% | ||
| FCFM | 2.8% |
ROA(3y)11.88%
ROA(5y)10.34%
ROE(3y)16.82%
ROE(5y)14.9%
ROIC(3y)14.78%
ROIC(5y)13.87%
ROICexc(3y)19.53%
ROICexc(5y)17.63%
ROICexgc(3y)24.1%
ROICexgc(5y)22.07%
ROCE(3y)20.69%
ROCE(5y)19.74%
ROICexcg growth 3Y12.52%
ROICexcg growth 5Y12.86%
ROICexc growth 3Y14.7%
ROICexc growth 5Y16.53%
OM growth 3Y9.78%
OM growth 5Y11.65%
PM growth 3Y24.79%
PM growth 5Y9.55%
GM growth 3Y1.28%
GM growth 5Y0.09%
F-Score3
Asset Turnover0.64
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.02 | ||
| Debt/FCF | 5.77 | ||
| Debt/EBITDA | 0.09 | ||
| Cap/Depr | 168.94% | ||
| Cap/Sales | 8.53% | ||
| Interest Coverage | 22.89 | ||
| Cash Conversion | 41.81% | ||
| Profit Quality | 15.75% | ||
| Current Ratio | 1.92 | ||
| Quick Ratio | 1.36 | ||
| Altman-Z | 6 |
F-Score3
WACC10.38%
ROIC/WACC1.44
Cap/Depr(3y)167.01%
Cap/Depr(5y)131.16%
Cap/Sales(3y)8.76%
Cap/Sales(5y)7.27%
Profit Quality(3y)54.18%
Profit Quality(5y)79.65%
High Growth Momentum
Growth
EPS 1Y (TTM)2.56%
EPS 3Y42.67%
EPS 5Y24.21%
EPS Q2Q%2.28%
EPS Next Y1.89%
EPS Next 2Y3.86%
EPS Next 3Y-4.63%
EPS Next 5YN/A
Revenue 1Y (TTM)13.54%
Revenue growth 3Y13.72%
Revenue growth 5Y12.64%
Sales Q2Q%15.81%
Revenue Next Year15.32%
Revenue Next 2Y12.03%
Revenue Next 3Y7.1%
Revenue Next 5Y8.1%
EBIT growth 1Y6.1%
EBIT growth 3Y24.84%
EBIT growth 5Y25.76%
EBIT Next Year34.37%
EBIT Next 3Y6.72%
EBIT Next 5Y10.71%
FCF growth 1Y-61.54%
FCF growth 3Y-8.04%
FCF growth 5Y-2.41%
OCF growth 1Y-19.62%
OCF growth 3Y8.36%
OCF growth 5Y9.62%