DR. REDDY'S LABORATORIES-ADR (RDY) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:RDY - US2561352038 - ADR
13.91 USD
+0.01 (+0.07%)
13.91 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 has a great profitability rating, there are some minor concerns on its financial health. RDY is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
RDY had positive earnings in the past year.
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
With an excellent Return On Assets value of 10.62%, RDY belongs to the best of the industry, outperforming 92.19% of the companies in the same industry.
With an excellent Return On Equity value of 16.03%, RDY belongs to the best of the industry, outperforming 89.58% of the companies in the same industry.
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 in line with the industry average of 13.48%.
| 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
The Profit Margin of RDY (16.82%) is better than 89.58% 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 19.62%, RDY belongs to the best of the industry, outperforming 86.46% of the companies in the same industry.
RDY's Operating Margin has improved in the last couple of years.
RDY has a better Gross Margin (66.88%) than 75.00% 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 | 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
RDY has an Altman-Z score of 5.64. This indicates that RDY is financially healthy and has little risk of bankruptcy at the moment.
RDY has a better Altman-Z score (5.64) than 78.65% of its industry peers.
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.
The Debt to FCF ratio of RDY (3.17) is better than 88.54% of its industry peers.
RDY has a Debt/Equity ratio of 0.03. This is a healthy value indicating a solid balance between debt and equity.
RDY has a Debt to Equity ratio of 0.03. This is comparable 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 | 5.64 |
ROIC/WACC1.28
WACC10.2%
2.3 Liquidity
A Current Ratio of 1.85 indicates that RDY should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.85, RDY is doing worse than 63.54% of the companies in the same industry.
A Quick Ratio of 1.35 indicates that RDY should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.35, RDY is not doing good in the industry: 67.71% 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 | 1.85 | ||
| Quick Ratio | 1.35 |
3. Growth
3.1 Past
RDY shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 8.21%, which is quite good.
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 14.04%.
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)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
The Earnings Per Share is expected to decrease by -0.91% on average over the next years.
The Revenue is expected to grow by 6.24% on average over the next years.
EPS Next Y-5.63%
EPS Next 2Y-8.15%
EPS Next 3Y-0.91%
EPS Next 5YN/A
Revenue Next Year5.28%
Revenue Next 2Y3.93%
Revenue Next 3Y5.85%
Revenue Next 5Y6.24%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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
The Price/Earnings ratio is 18.06, which indicates a rather expensive current valuation of RDY.
RDY's Price/Earnings ratio is rather cheap when compared to the industry. RDY is cheaper than 83.33% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 25.45. RDY is valued slightly cheaper when compared to this.
RDY is valuated rather expensively with a Price/Forward Earnings ratio of 21.79.
Based on the Price/Forward Earnings ratio, RDY is valued a bit cheaper than 74.48% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of RDY to the average of the S&P500 Index (34.46), we can say RDY is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.06 | ||
| Fwd PE | 21.79 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of RDY indicates a rather cheap valuation: RDY is cheaper than 84.90% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, RDY is valued a bit cheaper than the industry average as 76.04% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 56.19 | ||
| EV/EBITDA | 11.1 |
4.3 Compensation for Growth
The excellent profitability rating of RDY may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.76
EPS Next 2Y-8.15%
EPS Next 3Y-0.91%
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 7.87. RDY pays more dividend than 90.10% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, 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 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
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-0.91%
13.91
+0.01 (+0.07%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners50.91%
Inst Owner Change-1.54%
Ins Owners21.86%
Ins Owner ChangeN/A
Market Cap11.58B
Revenue(TTM)343.10B
Net Income(TTM)57.72B
Analysts57.33
Price Target15.04 (8.12%)
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)-0.57%
PT rev (3m)-0.37%
EPS NQ rev (1m)-3.06%
EPS NQ rev (3m)-3.06%
EPS NY rev (1m)-4.01%
EPS NY rev (3m)-3.86%
Revenue NQ rev (1m)-0.24%
Revenue NQ rev (3m)-0.24%
Revenue NY rev (1m)-0.97%
Revenue NY rev (3m)-0.96%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.06 | ||
| Fwd PE | 21.79 | ||
| P/S | 3.03 | ||
| P/FCF | 56.19 | ||
| P/OCF | 17.65 | ||
| P/B | 2.88 | ||
| P/tB | 4.23 | ||
| EV/EBITDA | 11.1 |
EPS(TTM)0.77
EY5.54%
EPS(NY)0.64
Fwd EY4.59%
FCF(TTM)0.25
FCFY1.78%
OCF(TTM)0.79
OCFY5.67%
SpS4.6
BVpS4.83
TBVpS3.29
PEG (NY)N/A
PEG (5Y)0.76
Graham Number9.14
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 | 5.64 |
F-Score4
WACC10.2%
ROIC/WACC1.28
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-0.91%
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 3Y5.85%
Revenue Next 5Y6.24%
EBIT growth 1Y1.53%
EBIT growth 3Y25.68%
EBIT growth 5Y18.58%
EBIT Next Year18.8%
EBIT Next 3Y6.2%
EBIT Next 5Y8.93%
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 18.06 and the Price/Book (PB) ratio is 2.88.
How financially healthy is DR. REDDY'S LABORATORIES-ADR?
The financial health rating of DR. REDDY'S LABORATORIES-ADR (RDY) is 6 / 10.