DR. REDDY'S LABORATORIES-ADR (RDY) Stock Fundamental Analysis
USA - NYSE:RDY - US2561352038 - ADR
14.66 USD
-0.07 (-0.48%)
14.66 USD
0 (0%)
We assign a fundamental rating of 6 out of 10 to RDY. RDY was compared to 195 industry peers in the Pharmaceuticals industry. RDY gets an excellent profitability rating and is at the same time showing great financial health properties. 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.
In the past 5 years RDY has always 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 (11.44%) is better than 92.86% of its industry peers.
RDY has a better Return On Equity (16.86%) than 90.31% of its industry peers.
RDY has a better Return On Invested Capital (14.58%) than 93.37% of its industry peers.
The Average Return On Invested Capital over the past 3 years for RDY is in line with the industry average of 15.28%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.44% | ||
| ROE | 16.86% | ||
| ROIC | 14.58% |
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 (17.32%) than 91.33% of its industry peers.
In the last couple of years the Profit Margin of RDY has grown nicely.
The Operating Margin of RDY (21.39%) is better than 88.78% of its industry peers.
In the last couple of years the Operating Margin of RDY has grown nicely.
RDY has a Gross Margin of 69.43%. This is in the better half of the industry: RDY outperforms 77.55% 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 | 21.39% | ||
| PM (TTM) | 17.32% | ||
| GM | 69.43% |
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.
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.
2.2 Solvency
An Altman-Z score of 6.44 indicates that RDY is not in any danger for bankruptcy at the moment.
RDY's Altman-Z score of 6.44 is amongst the best of the industry. RDY outperforms 81.63% of its industry peers.
RDY has a debt to FCF ratio of 3.89. This is a good value and a sign of high solvency as RDY would need 3.89 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 3.89, RDY belongs to the best of the industry, outperforming 87.76% of the companies in the same industry.
RDY has a Debt/Equity ratio of 0.02. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.02, RDY is in line with its industry, outperforming 56.12% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.02 | ||
| Debt/FCF | 3.89 | ||
| Altman-Z | 6.44 |
ROIC/WACC1.42
WACC10.29%
2.3 Liquidity
A Current Ratio of 1.92 indicates that RDY should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.92, RDY is doing worse than 60.71% of the companies in the same industry.
A Quick Ratio of 1.37 indicates that RDY should not have too much problems paying its short term obligations.
RDY's Quick ratio of 1.37 is on the low side compared to the rest of the industry. RDY is outperformed by 63.78% 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 | 1.37 |
3. Growth
3.1 Past
RDY shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 2.10%.
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 15.79% 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)2.1%
EPS 3Y33.55%
EPS 5Y23.62%
EPS Q2Q%1.94%
Revenue 1Y (TTM)15.79%
Revenue growth 3Y14.86%
Revenue growth 5Y13.26%
Sales Q2Q%11.38%
3.2 Future
The Earnings Per Share is expected to decrease by -0.97% on average over the next years.
The Revenue is expected to grow by 6.61% on average over the next years.
EPS Next Y-1.87%
EPS Next 2Y-7.62%
EPS Next 3Y-0.97%
EPS Next 5YN/A
Revenue Next Year6.3%
Revenue Next 2Y4.11%
Revenue Next 3Y5.5%
Revenue Next 5Y6.61%
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
A Price/Earnings ratio of 19.04 indicates a rather expensive valuation of RDY.
Based on the Price/Earnings ratio, RDY is valued cheaper than 82.65% of the companies in the same industry.
RDY is valuated rather cheaply when we compare the Price/Earnings ratio to 27.30, which is the current average of the S&P500 Index.
RDY is valuated rather expensively with a Price/Forward Earnings ratio of 22.35.
Based on the Price/Forward Earnings ratio, RDY is valued a bit cheaper than 73.98% of the companies in the same industry.
RDY is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.73, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.04 | ||
| Fwd PE | 22.35 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, RDY is valued cheaply inside the industry as 86.73% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, RDY is valued a bit cheaper than 77.55% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 89.54 | ||
| EV/EBITDA | 11.7 |
4.3 Compensation for Growth
RDY has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.81
EPS Next 2Y-7.62%
EPS Next 3Y-0.97%
5. Dividend
5.1 Amount
With a yearly dividend of 0.61%, RDY is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 5.03, RDY pays a better dividend. On top of this RDY pays more dividend than 88.78% of the companies listed in the same industry.
With a Dividend Yield of 0.61, RDY pays less dividend than the S&P500 average, which is at 2.41.
| Industry Rank | Sector 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
5.3 Sustainability
RDY pays out 11.78% of its income as dividend. This is a sustainable payout ratio.
RDY's earnings and Dividend Rate are declining. This means the current dividend is most likely not sustainable.
DP11.78%
EPS Next 2Y-7.62%
EPS Next 3Y-0.97%
14.66
-0.07 (-0.48%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners48.44%
Inst Owner Change-0.93%
Ins Owners22.54%
Ins Owner ChangeN/A
Market Cap12.20B
Analysts64.09
Price Target14.87 (1.43%)
Short Float %1.61%
Short Ratio7.1
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.61% |
Yearly Dividend0.09
Dividend Growth(5Y)-19.44%
DP11.78%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.24%
Min EPS beat(2)-3.24%
Max EPS beat(2)2.77%
EPS beat(4)2
Avg EPS beat(4)-1.72%
Min EPS beat(4)-13.1%
Max EPS beat(4)6.71%
EPS beat(8)6
Avg EPS beat(8)8.02%
EPS beat(12)10
Avg EPS beat(12)18.2%
EPS beat(16)11
Avg EPS beat(16)9.88%
Revenue beat(2)1
Avg Revenue beat(2)0.29%
Min Revenue beat(2)-0.42%
Max Revenue beat(2)1%
Revenue beat(4)3
Avg Revenue beat(4)1.75%
Min Revenue beat(4)-0.42%
Max Revenue beat(4)3.62%
Revenue beat(8)5
Avg Revenue beat(8)1.05%
Revenue beat(12)8
Avg Revenue beat(12)2.01%
Revenue beat(16)10
Avg Revenue beat(16)1.72%
PT rev (1m)-0.79%
PT rev (3m)-3.33%
EPS NQ rev (1m)-5.03%
EPS NQ rev (3m)-5.03%
EPS NY rev (1m)-8.63%
EPS NY rev (3m)-8.39%
Revenue NQ rev (1m)1.62%
Revenue NQ rev (3m)1.62%
Revenue NY rev (1m)-0.26%
Revenue NY rev (3m)-2.64%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.04 | ||
| Fwd PE | 22.35 | ||
| P/S | 3.3 | ||
| P/FCF | 89.54 | ||
| P/OCF | 23.2 | ||
| P/B | 3.21 | ||
| P/tB | 4.78 | ||
| EV/EBITDA | 11.7 |
EPS(TTM)0.77
EY5.25%
EPS(NY)0.66
Fwd EY4.47%
FCF(TTM)0.16
FCFY1.12%
OCF(TTM)0.63
OCFY4.31%
SpS4.44
BVpS4.57
TBVpS3.07
PEG (NY)N/A
PEG (5Y)0.81
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.44% | ||
| ROE | 16.86% | ||
| ROCE | 19.19% | ||
| ROIC | 14.58% | ||
| ROICexc | 17.52% | ||
| ROICexgc | 27.51% | ||
| OM | 21.39% | ||
| PM (TTM) | 17.32% | ||
| GM | 69.43% | ||
| FCFM | 3.69% |
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%
ROICexcg growth 3Y6.58%
ROICexcg 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-Score3
Asset Turnover0.66
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.02 | ||
| Debt/FCF | 3.89 | ||
| Debt/EBITDA | 0.09 | ||
| Cap/Depr | 201.9% | ||
| Cap/Sales | 10.54% | ||
| Interest Coverage | 20.05 | ||
| Cash Conversion | 53.44% | ||
| Profit Quality | 21.27% | ||
| Current Ratio | 1.92 | ||
| Quick Ratio | 1.37 | ||
| Altman-Z | 6.44 |
F-Score3
WACC10.29%
ROIC/WACC1.42
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)2.1%
EPS 3Y33.55%
EPS 5Y23.62%
EPS Q2Q%1.94%
EPS Next Y-1.87%
EPS Next 2Y-7.62%
EPS Next 3Y-0.97%
EPS Next 5YN/A
Revenue 1Y (TTM)15.79%
Revenue growth 3Y14.86%
Revenue growth 5Y13.26%
Sales Q2Q%11.38%
Revenue Next Year6.3%
Revenue Next 2Y4.11%
Revenue Next 3Y5.5%
Revenue Next 5Y6.61%
EBIT growth 1Y8.16%
EBIT growth 3Y25.68%
EBIT growth 5Y18.58%
EBIT Next Year27.07%
EBIT Next 3Y6.05%
EBIT Next 5Y10.16%
FCF growth 1Y-33.16%
FCF growth 3Y9.92%
FCF growth 5Y-12.7%
OCF growth 1Y2.19%
OCF growth 3Y18.21%
OCF growth 5Y9.24%