DR. REDDY'S LABORATORIES-ADR (RDY) Stock Fundamental Analysis
NYSE:RDY - New York Stock Exchange, Inc. - US2561352038 - ADR - Currency: USD
RDY gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 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 has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year RDY was profitable.
In the past year RDY had a positive cash flow from operations.
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 92.75% of its industry peers.
RDY has a better Return On Equity (16.86%) than 90.16% of its industry peers.
RDY's Return On Invested Capital of 14.58% is amongst the best of the industry. RDY outperforms 92.75% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for RDY is in line with the industry average of 14.92%.
| 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 90.67% of its industry peers.
RDY's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 21.39%, RDY belongs to the top of the industry, outperforming 87.56% 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 77.20% 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so RDY is still 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
RDY has a worse debt/assets ratio than last year.
2.2 Solvency
RDY has an Altman-Z score of 6.17. This indicates that RDY is financially healthy and has little risk of bankruptcy at the moment.
RDY has a Altman-Z score of 6.17. This is amongst the best in the industry. RDY outperforms 81.35% 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.
Looking at the Debt to FCF ratio, with a value of 3.89, RDY belongs to the top of the industry, outperforming 88.08% 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 55.96% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.02 | ||
| Debt/FCF | 3.89 | ||
| Altman-Z | 6.17 |
ROIC/WACC1.43
WACC10.18%
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.
Looking at the Current ratio, with a value of 1.92, RDY is doing worse than 61.66% 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.
Looking at the Quick ratio, with a value of 1.37, RDY is doing worse than 65.28% of the companies in the same industry.
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
The Earnings Per Share has been growing slightly by 2.10% 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
Looking at the last year, RDY shows a quite strong growth in Revenue. The Revenue has grown by 15.79% in the last year.
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
RDY is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -2.15% yearly.
RDY is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.52% yearly.
EPS Next Y7.4%
EPS Next 2Y-7.21%
EPS Next 3Y-2.15%
EPS Next 5YN/A
Revenue Next Year6.58%
Revenue Next 2Y4.21%
Revenue Next 3Y5.66%
Revenue Next 5Y5.52%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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 17.60 indicates a rather expensive valuation of RDY.
Based on the Price/Earnings ratio, RDY is valued cheaply inside the industry as 82.38% of the companies are valued more expensively.
RDY is valuated rather cheaply when we compare the Price/Earnings ratio to 27.24, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 20.59 indicates a rather expensive valuation of RDY.
Based on the Price/Forward Earnings ratio, RDY is valued a bit cheaper than the industry average as 74.09% of the companies are valued more expensively.
RDY's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 36.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.6 | ||
| Fwd PE | 20.59 |
4.2 Price Multiples
84.97% of the companies in the same industry are more expensive than RDY, based on the Enterprise Value to EBITDA ratio.
RDY's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. RDY is cheaper than 77.72% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 83.24 | ||
| EV/EBITDA | 10.88 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
RDY has an outstanding profitability rating, which may justify a higher PE ratio.
A cheap valuation may be justified as RDY's earnings are expected to decrease with -2.15% in the coming years.
PEG (NY)2.38
PEG (5Y)0.75
EPS Next 2Y-7.21%
EPS Next 3Y-2.15%
5. Dividend
5.1 Amount
With a yearly dividend of 0.63%, 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 4.20. RDY pays more dividend than 89.12% of the companies in the same industry.
With a Dividend Yield of 0.63, RDY pays less dividend than the S&P500 average, which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.63% |
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-7.21%
EPS Next 3Y-2.15%
NYSE:RDY (8/5/2025, 3:13:11 PM)
13.725
-0.06 (-0.47%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners48.44%
Inst Owner Change1.67%
Ins Owners22.54%
Ins Owner ChangeN/A
Market Cap11.42B
Analysts67.5
Price Target15.13 (10.24%)
Short Float %2.08%
Short Ratio8.01
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)0.38%
PT rev (3m)-4.52%
EPS NQ rev (1m)-5.03%
EPS NQ rev (3m)3.03%
EPS NY rev (1m)0.27%
EPS NY rev (3m)-0.2%
Revenue NQ rev (1m)1.62%
Revenue NQ rev (3m)-1.01%
Revenue NY rev (1m)-2.39%
Revenue NY rev (3m)-2.51%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.6 | ||
| Fwd PE | 20.59 | ||
| P/S | 3.07 | ||
| P/FCF | 83.24 | ||
| P/OCF | 21.57 | ||
| P/B | 2.98 | ||
| P/tB | 4.44 | ||
| EV/EBITDA | 10.88 |
EPS(TTM)0.78
EY5.68%
EPS(NY)0.67
Fwd EY4.86%
FCF(TTM)0.16
FCFY1.2%
OCF(TTM)0.64
OCFY4.64%
SpS4.47
BVpS4.6
TBVpS3.09
PEG (NY)2.38
PEG (5Y)0.75
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 | 6.17 |
F-Score3
WACC10.18%
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 Y7.4%
EPS Next 2Y-7.21%
EPS Next 3Y-2.15%
EPS Next 5YN/A
Revenue 1Y (TTM)15.79%
Revenue growth 3Y14.86%
Revenue growth 5Y13.26%
Sales Q2Q%11.38%
Revenue Next Year6.58%
Revenue Next 2Y4.21%
Revenue Next 3Y5.66%
Revenue Next 5Y5.52%
EBIT growth 1Y8.16%
EBIT growth 3Y25.68%
EBIT growth 5Y18.58%
EBIT Next Year27.07%
EBIT Next 3Y5.69%
EBIT Next 5Y20.64%
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%