DR. REDDY'S LABORATORIES-ADR (RDY) Stock Fundamental Analysis
USA - NYSE:RDY - US2561352038 - ADR
14.07 USD
+0.1 (+0.72%)
14.35 USD
+0.28 (+1.99%)
Overall RDY gets a fundamental rating of 6 out of 10. We evaluated RDY against 195 industry peers in the Pharmaceuticals industry. RDY scores excellent points on both the profitability and health parts. This is a solid base for a good stock. RDY is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year RDY was profitable.
RDY had a positive operating cash flow in the past year.
RDY had positive earnings in each of the past 5 years.
Each year in the past 5 years RDY had a positive operating cash flow.
1.2 Ratios
RDY has a better Return On Assets (11.44%) than 93.33% of its industry peers.
The Return On Equity of RDY (16.86%) is better than 90.26% of its industry peers.
With an excellent Return On Invested Capital value of 14.58%, RDY belongs to the best of the industry, outperforming 93.33% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for RDY is in line with the industry average of 15.30%.
| 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 Profit Margin of 17.32%. This is amongst the best in the industry. RDY outperforms 91.79% of its industry peers.
In the last couple of years the Profit Margin of RDY has grown nicely.
With an excellent Operating Margin value of 21.39%, RDY belongs to the best of the industry, outperforming 88.72% of the companies in the same industry.
In the last couple of years the Operating Margin of RDY has grown nicely.
RDY has a better Gross Margin (69.43%) than 76.41% of its industry peers.
RDY's Gross Margin has been stable in the last couple of years.
| 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.
Compared to 1 year ago, RDY has about the same amount of shares outstanding.
The number of shares outstanding for RDY has been increased compared to 5 years ago.
RDY has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 6.27 indicates that RDY is not in any danger for bankruptcy at the moment.
RDY has a Altman-Z score of 6.27. This is amongst the best in the industry. RDY outperforms 80.51% of its industry peers.
The Debt to FCF ratio of RDY is 3.89, which is a good value as it means it would take RDY, 3.89 years of fcf income to pay off all of its debts.
RDY has a better Debt to FCF ratio (3.89) than 87.69% 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.
With a Debt to Equity ratio value of 0.02, RDY perfoms like the industry average, outperforming 55.38% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.02 | ||
| Debt/FCF | 3.89 | ||
| Altman-Z | 6.27 |
ROIC/WACC1.43
WACC10.22%
2.3 Liquidity
A Current Ratio of 1.92 indicates that RDY should not have too much problems paying its short term obligations.
The Current ratio of RDY (1.92) is worse than 61.54% of its industry peers.
RDY has a Quick Ratio of 1.37. 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 1.37 is on the low side compared to the rest of the industry. RDY is outperformed by 64.10% 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 | 1.92 | ||
| 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%.
Measured over the past years, RDY shows a very strong growth in Earnings Per Share. The EPS has been growing by 23.62% on average per year.
RDY shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 15.79%.
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)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 -0.85% on average over the next years.
Based on estimates for the next years, RDY will show a small growth in Revenue. The Revenue will grow by 6.76% on average per year.
EPS Next Y-1.71%
EPS Next 2Y-7.64%
EPS Next 3Y-0.85%
EPS Next 5YN/A
Revenue Next Year6.3%
Revenue Next 2Y4.13%
Revenue Next 3Y5.56%
Revenue Next 5Y6.76%
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
A Price/Earnings ratio of 18.27 indicates a rather expensive valuation of RDY.
Based on the Price/Earnings ratio, RDY is valued cheaply inside the industry as 84.62% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.55, RDY is valued a bit cheaper.
With a Price/Forward Earnings ratio of 21.58, RDY is valued on the expensive side.
RDY's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. RDY is cheaper than 73.33% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of RDY to the average of the S&P500 Index (23.04), we can say RDY is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.27 | ||
| Fwd PE | 21.58 |
4.2 Price Multiples
87.69% of the companies in the same industry are more expensive than RDY, based on the Enterprise Value to EBITDA ratio.
76.92% 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 | 86.44 | ||
| EV/EBITDA | 11.19 |
4.3 Compensation for Growth
RDY has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.77
EPS Next 2Y-7.64%
EPS Next 3Y-0.85%
5. Dividend
5.1 Amount
With a yearly dividend of 0.64%, RDY is not a good candidate for dividend investing.
RDY's Dividend Yield is rather good when compared to the industry average which is at 6.60. RDY pays more dividend than 88.72% of the companies in the same industry.
With a Dividend Yield of 0.64, RDY pays less dividend than the S&P500 average, which is at 2.43.
| 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
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-7.64%
EPS Next 3Y-0.85%
14.07
+0.1 (+0.72%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners50.91%
Inst Owner Change0%
Ins Owners21.86%
Ins Owner ChangeN/A
Market Cap11.71B
Analysts57.33
Price Target15.12 (7.46%)
Short Float %1.7%
Short Ratio9.03
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.64% |
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)0.21%
PT rev (3m)0.36%
EPS NQ rev (1m)-5.03%
EPS NQ rev (3m)-5.03%
EPS NY rev (1m)0.16%
EPS NY rev (3m)-8.24%
Revenue NQ rev (1m)1.62%
Revenue NQ rev (3m)1.62%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-2.64%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.27 | ||
| Fwd PE | 21.58 | ||
| P/S | 3.19 | ||
| P/FCF | 86.44 | ||
| P/OCF | 22.4 | ||
| P/B | 3.1 | ||
| P/tB | 4.61 | ||
| EV/EBITDA | 11.19 |
EPS(TTM)0.77
EY5.47%
EPS(NY)0.65
Fwd EY4.63%
FCF(TTM)0.16
FCFY1.16%
OCF(TTM)0.63
OCFY4.46%
SpS4.42
BVpS4.54
TBVpS3.05
PEG (NY)N/A
PEG (5Y)0.77
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 | 6.27 |
F-Score3
WACC10.22%
ROIC/WACC1.43
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-1.71%
EPS Next 2Y-7.64%
EPS Next 3Y-0.85%
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 2Y4.13%
Revenue Next 3Y5.56%
Revenue Next 5Y6.76%
EBIT growth 1Y8.16%
EBIT growth 3Y25.68%
EBIT growth 5Y18.58%
EBIT Next Year18.8%
EBIT Next 3Y6.18%
EBIT Next 5Y10.31%
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%