DR. REDDY'S LABORATORIES-ADR (RDY) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:RDY - US2561352038 - ADR
14.05 USD
+0.06 (+0.43%)
14.05 USD
0 (0%)
We assign a fundamental rating of 6 out of 10 to RDY. RDY was compared to 192 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
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.
Each year in the past 5 years RDY had a positive operating cash flow.
1.2 Ratios
RDY has a Return On Assets of 10.62%. This is amongst the best in the industry. RDY outperforms 92.19% of its industry peers.
RDY has a Return On Equity of 16.03%. This is amongst the best in the industry. RDY outperforms 89.58% of its industry peers.
RDY's Return On Invested Capital of 13.03% is amongst the best of the industry. RDY outperforms 92.19% of its industry peers.
The Average Return On Invested Capital over the past 3 years for RDY is above the industry average of 12.71%.
| 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's Profit Margin of 16.82% is amongst the best of the industry. RDY outperforms 89.58% of its industry peers.
In the last couple of years the Profit Margin of RDY has grown nicely.
RDY's Operating Margin of 19.62% is amongst the best of the industry. RDY outperforms 86.46% of its industry peers.
RDY's Operating Margin has improved in the last couple of years.
The Gross Margin of RDY (66.88%) is better than 75.00% 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.
The number of shares outstanding for RDY remains at a similar level compared to 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 5.67 indicates that RDY is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 5.67, RDY is in the better half of the industry, outperforming 77.08% of the companies in the same industry.
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 88.54% of the companies in the same industry.
RDY has a Debt/Equity ratio of 0.03. This is a healthy value indicating a solid balance between debt and equity.
RDY's Debt to Equity ratio of 0.03 is in line compared to the rest of the industry. RDY outperforms 54.69% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.03 | ||
| Debt/FCF | 3.17 | ||
| Altman-Z | 5.67 |
ROIC/WACC1.27
WACC10.22%
2.3 Liquidity
A Current Ratio of 1.85 indicates that RDY should not have too much problems paying its short term obligations.
With a Current ratio value of 1.85, RDY is not doing good in the industry: 63.54% of the companies in the same industry are doing better.
RDY has a Quick Ratio of 1.35. This is a normal value and indicates that RDY is financially healthy and should not expect problems in meeting its short term obligations.
RDY's Quick ratio of 1.35 is on the low side compared to the rest of the industry. RDY is outperformed by 67.71% 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 | 1.85 | ||
| 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
RDY shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.04%.
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 -0.50% yearly.
The Revenue is expected to grow by 6.48% on average over the next years.
EPS Next Y-5.63%
EPS Next 2Y-8.15%
EPS Next 3Y-0.5%
EPS Next 5YN/A
Revenue Next Year5.28%
Revenue Next 2Y3.93%
Revenue Next 3Y6.3%
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.
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
With a Price/Earnings ratio of 18.25, RDY is valued on the expensive side.
Based on the Price/Earnings ratio, RDY is valued cheaper than 83.33% of the companies in the same industry.
When comparing the Price/Earnings ratio of RDY to the average of the S&P500 Index (26.31), we can say RDY is valued slightly cheaper.
A Price/Forward Earnings ratio of 21.97 indicates a rather expensive valuation of RDY.
Based on the Price/Forward Earnings ratio, RDY is valued a bit cheaper than 76.04% of the companies in the same industry.
RDY's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 36.56.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.25 | ||
| Fwd PE | 21.97 |
4.2 Price Multiples
RDY's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. RDY is cheaper than 85.42% of the companies in the same industry.
RDY's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. RDY is cheaper than 76.04% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 56.66 | ||
| EV/EBITDA | 11.2 |
4.3 Compensation for Growth
The excellent profitability rating of RDY may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.77
EPS Next 2Y-8.15%
EPS Next 3Y-0.5%
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 6.81, RDY pays a better dividend. On top of this RDY pays more dividend than 90.10% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.32, 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 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
11.54% 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.
DP11.54%
EPS Next 2Y-8.15%
EPS Next 3Y-0.5%
14.05
+0.06 (+0.43%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners50.91%
Inst Owner Change-1.5%
Ins Owners21.86%
Ins Owner ChangeN/A
Market Cap11.70B
Revenue(TTM)343.10B
Net Income(TTM)57.72B
Analysts57.33
Price Target15.04 (7.05%)
Short Float %1.45%
Short Ratio7.99
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-Date
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)-1.42%
PT rev (3m)-0.37%
EPS NQ rev (1m)-0.02%
EPS NQ rev (3m)-3.06%
EPS NY rev (1m)-4%
EPS NY rev (3m)-3.86%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.24%
Revenue NY rev (1m)-0.97%
Revenue NY rev (3m)-0.96%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.25 | ||
| Fwd PE | 21.97 | ||
| P/S | 3.05 | ||
| P/FCF | 56.66 | ||
| P/OCF | 17.79 | ||
| P/B | 2.91 | ||
| P/tB | 4.27 | ||
| EV/EBITDA | 11.2 |
EPS(TTM)0.77
EY5.48%
EPS(NY)0.64
Fwd EY4.55%
FCF(TTM)0.25
FCFY1.76%
OCF(TTM)0.79
OCFY5.62%
SpS4.61
BVpS4.83
TBVpS3.29
PEG (NY)N/A
PEG (5Y)0.77
Graham Number9.15
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 | 5.67 |
F-Score4
WACC10.22%
ROIC/WACC1.27
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-5.63%
EPS Next 2Y-8.15%
EPS Next 3Y-0.5%
EPS Next 5YN/A
Revenue 1Y (TTM)14.04%
Revenue growth 3Y14.86%
Revenue growth 5Y13.26%
Sales Q2Q%9.83%
Revenue Next Year5.28%
Revenue Next 2Y3.93%
Revenue Next 3Y6.3%
Revenue Next 5Y6.48%
EBIT growth 1Y1.53%
EBIT growth 3Y25.68%
EBIT growth 5Y18.58%
EBIT Next Year18.8%
EBIT Next 3Y6.64%
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.
Can you provide the valuation status for DR. REDDY'S LABORATORIES-ADR?
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 PE and PB ratios for RDY stock?
The Price/Earnings (PE) ratio for DR. REDDY'S LABORATORIES-ADR (RDY) is 18.25 and the Price/Book (PB) ratio is 2.91.
How financially healthy is DR. REDDY'S LABORATORIES-ADR?
The financial health rating of DR. REDDY'S LABORATORIES-ADR (RDY) is 6 / 10.