DR. REDDY'S LABORATORIES-ADR (RDY) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:RDY - US2561352038 - ADR
13.09 USD
-0.21 (-1.58%)
13.09 USD
0 (0%)
RDY gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 190 industry peers in the Pharmaceuticals industry. RDY scores excellent on profitability, 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 Return On Assets of 10.62%. This is amongst the best in the industry. RDY outperforms 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
- RDY has a better Profit Margin (16.82%) than 88.95% of its industry peers.
- RDY's Profit Margin has improved in the last couple of years.
- RDY's Operating Margin of 19.62% is amongst the best of the industry. RDY outperforms 86.84% of its industry peers.
- In the last couple of years the Operating Margin of RDY has grown nicely.
- RDY has a better Gross Margin (66.88%) than 75.79% 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
- RDY has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- RDY has about the same amout of shares outstanding than it did 1 year ago.
- Compared to 5 years ago, RDY has more shares outstanding
- RDY has a worse debt/assets ratio than last year.
2.2 Solvency
- RDY has an Altman-Z score of 5.46. This indicates that RDY is financially healthy and has little risk of bankruptcy at the moment.
- The Altman-Z score of RDY (5.46) is better than 75.26% 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 88.95% of its industry peers.
- A Debt/Equity ratio of 0.03 indicates that RDY is not too dependend on debt financing.
- RDY has a Debt to Equity ratio (0.03) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.03 | ||
| Debt/FCF | 3.17 | ||
| Altman-Z | 5.46 |
ROIC/WACC1.29
WACC10.1%
2.3 Liquidity
- A Current Ratio of 1.85 indicates that RDY should not have too much problems paying its short term obligations.
- The Current ratio of RDY (1.85) is worse 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.
- The Quick ratio of RDY (1.35) is worse 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
- 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
- The Revenue has grown by 14.04% 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)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.
- RDY is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.63% 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 5Y6.63%
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.
- 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
- RDY is valuated rather expensively with a Price/Earnings ratio of 17.00.
- 83.68% of the companies in the same industry are more expensive than RDY, based on the Price/Earnings ratio.
- When comparing the Price/Earnings ratio of RDY to the average of the S&P500 Index (27.54), we can say RDY is valued slightly cheaper.
- The Price/Forward Earnings ratio is 20.69, which indicates a rather expensive current valuation of RDY.
- Based on the Price/Forward Earnings ratio, RDY is valued a bit cheaper than 76.84% of the companies in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 24.31. RDY is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17 | ||
| Fwd PE | 20.69 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, RDY is valued cheaply inside the industry as 88.42% of the companies are valued more expensively.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of RDY indicates a somewhat cheap valuation: RDY is cheaper than 77.89% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 53.27 | ||
| EV/EBITDA | 10.47 |
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
- With a yearly dividend of 0.66%, RDY is not a good candidate for dividend investing.
- Compared to an average industry Dividend Yield of 0.35, RDY pays a better dividend. On top of this RDY pays more dividend than 90.53% of the companies listed in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.92, RDY's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.66% |
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%
13.09
-0.21 (-1.58%)
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 Cap10.90B
Revenue(TTM)343.10B
Net Income(TTM)57.72B
Analysts56.89
Price Target14.92 (13.98%)
Short Float %1.72%
Short Ratio9.08
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.66% |
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 | 20.69 | ||
| P/S | 2.87 | ||
| P/FCF | 53.27 | ||
| P/OCF | 16.73 | ||
| P/B | 2.73 | ||
| P/tB | 4.01 | ||
| EV/EBITDA | 10.47 |
EPS(TTM)0.77
EY5.88%
EPS(NY)0.63
Fwd EY4.83%
FCF(TTM)0.25
FCFY1.88%
OCF(TTM)0.78
OCFY5.98%
SpS4.56
BVpS4.79
TBVpS3.26
PEG (NY)N/A
PEG (5Y)0.72
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
WACC10.1%
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%.