DR. REDDY'S LABORATORIES-ADR (RDY) Stock Fundamental Analysis
NYSE:RDY - US2561352038 - ADR
14.21 USD
-0.25 (-1.73%)
14.2103 USD
0 (0%)
We assign a fundamental rating of 6 out of 10 to RDY. RDY was compared to 193 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.
Each year in the past 5 years RDY has been profitable.
RDY had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 11.44%, RDY belongs to the top of the industry, outperforming 92.75% of the companies in the same industry.
RDY has a Return On Equity of 16.86%. This is amongst the best in the industry. RDY outperforms 90.16% of its industry peers.
With an excellent Return On Invested Capital value of 14.58%, RDY belongs to the best of the industry, outperforming 93.26% 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 15.38%.
| 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 91.19% of its industry peers.
In the last couple of years the Profit Margin of RDY has grown nicely.
RDY's Operating Margin of 21.39% is amongst the best of the industry. RDY outperforms 88.60% of its industry peers.
RDY's Operating Margin has improved in the last couple of years.
RDY has a better Gross Margin (69.43%) than 77.72% 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), RDY is creating some value.
RDY has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for RDY has been increased compared to 5 years ago.
Compared to 1 year ago, RDY has a worse debt to assets ratio.
2.2 Solvency
RDY has an Altman-Z score of 6.35. This indicates that RDY is financially healthy and has little risk of bankruptcy at the moment.
RDY has a Altman-Z score of 6.35. This is amongst the best in the industry. RDY outperforms 80.83% 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.
With an excellent Debt to FCF ratio value of 3.89, RDY belongs to the best of the industry, outperforming 87.56% of the companies in the same industry.
A Debt/Equity ratio of 0.02 indicates that RDY is not too dependend on debt financing.
RDY has a Debt to Equity ratio of 0.02. This is comparable to the rest of the industry: RDY outperforms 56.48% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.02 | ||
| Debt/FCF | 3.89 | ||
| Altman-Z | 6.35 |
ROIC/WACC1.42
WACC10.24%
2.3 Liquidity
RDY has a Current Ratio of 1.92. This is a normal value and indicates that RDY is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.92, RDY is not doing good in the industry: 60.10% of the companies in the same industry are doing better.
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.
With a Quick ratio value of 1.37, RDY is not doing good in the industry: 63.21% of the companies in the same industry are doing better.
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
The Earnings Per Share has been growing slightly by 2.10% over the past year.
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.
The Revenue has grown by 15.79% in the past year. This is quite good.
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
Based on estimates for the next years, RDY will show a decrease in Earnings Per Share. The EPS will decrease by -1.26% on average per year.
The Revenue is expected to grow by 6.43% on average over the next years.
EPS Next Y-1.87%
EPS Next 2Y-7.62%
EPS Next 3Y-1.26%
EPS Next 5YN/A
Revenue Next Year6.3%
Revenue Next 2Y4.11%
Revenue Next 3Y5.5%
Revenue Next 5Y6.43%
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
Based on the Price/Earnings ratio of 18.22, 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 82.90% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 27.08. RDY is valued slightly cheaper when compared to this.
A Price/Forward Earnings ratio of 21.49 indicates a rather expensive valuation of RDY.
Compared to the rest of the industry, the Price/Forward Earnings ratio of RDY indicates a somewhat cheap valuation: RDY is cheaper than 73.58% of the companies listed in the same industry.
RDY is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.67, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.22 | ||
| Fwd PE | 21.49 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, RDY is valued cheaper than 86.01% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, RDY is valued a bit cheaper than the industry average as 76.68% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 86.09 | ||
| EV/EBITDA | 11.43 |
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-7.62%
EPS Next 3Y-1.26%
5. Dividend
5.1 Amount
RDY has a yearly dividend return of 0.63%, which is pretty low.
Compared to an average industry Dividend Yield of 3.83, RDY pays a better dividend. On top of this RDY pays more dividend than 89.12% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.34, RDY's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.63% |
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.
The Dividend Rate of RDY has been decling, while earnings will also be declining. This means the current dividend is most likely not sustainable.
DP11.78%
EPS Next 2Y-7.62%
EPS Next 3Y-1.26%
14.21
-0.25 (-1.73%)
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 Cap11.83B
Analysts64.55
Price Target15.09 (6.19%)
Short Float %1.68%
Short Ratio6.67
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.63% |
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)-0.23%
PT rev (3m)-6%
EPS NQ rev (1m)-5.03%
EPS NQ rev (3m)-5.04%
EPS NY rev (1m)-8.66%
EPS NY rev (3m)-8.4%
Revenue NQ rev (1m)1.62%
Revenue NQ rev (3m)1.62%
Revenue NY rev (1m)-2.65%
Revenue NY rev (3m)-2.65%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.22 | ||
| Fwd PE | 21.49 | ||
| P/S | 3.17 | ||
| P/FCF | 86.09 | ||
| P/OCF | 22.31 | ||
| P/B | 3.09 | ||
| P/tB | 4.59 | ||
| EV/EBITDA | 11.43 |
EPS(TTM)0.78
EY5.49%
EPS(NY)0.66
Fwd EY4.65%
FCF(TTM)0.17
FCFY1.16%
OCF(TTM)0.64
OCFY4.48%
SpS4.48
BVpS4.6
TBVpS3.09
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 | 6.35 |
F-Score3
WACC10.24%
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-1.26%
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 5Y6.43%
EBIT growth 1Y8.16%
EBIT growth 3Y25.68%
EBIT growth 5Y18.58%
EBIT Next Year27.07%
EBIT Next 3Y5.96%
EBIT Next 5Y9.97%
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%