DR. REDDY'S LABORATORIES-ADR (RDY)

US2561352038 - ADR

73.35  +1.04 (+1.44%)

After market: 73.35 0 (0%)

Fundamental Rating

7

Taking everything into account, RDY scores 7 out of 10 in our fundamental rating. RDY was compared to 203 industry peers in the Pharmaceuticals industry. Both the health and profitability get an excellent rating, making RDY a very profitable company, without any liquidiy or solvency issues. RDY has a correct valuation and a medium growth rate. This makes RDY very considerable for quality investing!



8

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.
In the past 5 years RDY always reported a positive cash flow from operatings.

1.2 Ratios

The Return On Assets of RDY (14.63%) is better than 94.53% of its industry peers.
RDY's Return On Equity of 19.97% is amongst the best of the industry. RDY outperforms 91.54% of its industry peers.
RDY's Return On Invested Capital of 17.24% is amongst the best of the industry. RDY outperforms 94.03% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for RDY is below the industry average of 16.07%.
The last Return On Invested Capital (17.24%) for RDY is above the 3 year average (12.90%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 14.63%
ROE 19.97%
ROIC 17.24%
ROA(3y)9.54%
ROA(5y)9.21%
ROE(3y)13.93%
ROE(5y)13.73%
ROIC(3y)12.9%
ROIC(5y)11.89%

1.3 Margins

RDY's Profit Margin of 19.02% is amongst the best of the industry. RDY outperforms 92.04% of its industry peers.
RDY's Profit Margin has improved in the last couple of years.
RDY's Operating Margin of 23.35% is amongst the best of the industry. RDY outperforms 91.04% of its industry peers.
RDY's Operating Margin has improved in the last couple of years.
RDY has a Gross Margin of 70.71%. This is in the better half of the industry: RDY outperforms 77.61% 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 RankSector Rank
OM 23.35%
PM (TTM) 19.02%
GM 70.71%
OM growth 3Y7.89%
OM growth 5Y19.17%
PM growth 3Y16.46%
PM growth 5Y22.48%
GM growth 3Y0.33%
GM growth 5Y-0.6%

7

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.
RDY has about the same amout of shares outstanding than it did 1 year ago.
RDY has about the same amout of shares outstanding than it did 5 years ago.
The debt/assets ratio for RDY has been reduced compared to a year ago.

2.2 Solvency

RDY has an Altman-Z score of 9.40. This indicates that RDY is financially healthy and has little risk of bankruptcy at the moment.
RDY has a better Altman-Z score (9.40) than 85.07% of its industry peers.
The Debt to FCF ratio of RDY is 0.27, which is an excellent value as it means it would take RDY, only 0.27 years of fcf income to pay off all of its debts.
RDY's Debt to FCF ratio of 0.27 is amongst the best of the industry. RDY outperforms 96.52% 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.
RDY has a Debt to Equity ratio of 0.02. This is comparable to the rest of the industry: RDY outperforms 51.74% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.02
Debt/FCF 0.27
Altman-Z 9.4
ROIC/WACC1.78
WACC9.7%

2.3 Liquidity

RDY has a Current Ratio of 2.59. This indicates that RDY is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of RDY (2.59) is comparable to the rest of the industry.
A Quick Ratio of 1.91 indicates that RDY should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.91, RDY is doing worse than 62.69% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 2.59
Quick Ratio 1.91

6

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 63.67% 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 36.59% on average per year.
Looking at the last year, RDY shows a quite strong growth in Revenue. The Revenue has grown by 19.61% in the last year.
Measured over the past years, RDY shows a quite strong growth in Revenue. The Revenue has been growing by 11.55% on average per year.
EPS 1Y (TTM)63.67%
EPS 3Y32.14%
EPS 5Y36.59%
EPS growth Q2Q32.74%
Revenue 1Y (TTM)19.61%
Revenue growth 3Y12.09%
Revenue growth 5Y11.55%
Revenue growth Q2Q9.01%

3.2 Future

Based on estimates for the next years, RDY will show a small growth in Earnings Per Share. The EPS will grow by 4.96% on average per year.
Based on estimates for the next years, RDY will show a quite strong growth in Revenue. The Revenue will grow by 8.22% on average per year.
EPS Next Y19.47%
EPS Next 2Y11.87%
EPS Next 3Y8.25%
EPS Next 5Y4.96%
Revenue Next Year14.31%
Revenue Next 2Y10.46%
Revenue Next 3Y8.85%
Revenue Next 5Y8.22%

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.

6

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 19.99, which indicates a rather expensive current valuation of RDY.
Based on the Price/Earnings ratio, RDY is valued cheaply inside the industry as 83.58% of the companies are valued more expensively.
RDY's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.48.
With a Price/Forward Earnings ratio of 18.01, RDY is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of RDY indicates a rather cheap valuation: RDY is cheaper than 80.60% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of RDY to the average of the S&P500 Index (22.79), we can say RDY is valued slightly cheaper.
Industry RankSector Rank
PE 19.99
Fwd PE 18.01

4.2 Price Multiples

RDY's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. RDY is cheaper than 84.58% of the companies in the same industry.
82.59% of the companies in the same industry are more expensive than RDY, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 20.72
EV/EBITDA 11.82

4.3 Compensation for Growth

The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of RDY may justify a higher PE ratio.
PEG (NY)1.03
PEG (5Y)0.55
EPS Next 2Y11.87%
EPS Next 3Y8.25%

5

5. Dividend

5.1 Amount

With a yearly dividend of 0.65%, RDY is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 4.27, RDY pays a better dividend. On top of this RDY pays more dividend than 90.05% 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 RankSector Rank
Dividend Yield 0.65%

5.2 History

The dividend of RDY has a limited annual growth rate of 4.51%.
RDY has paid a dividend for at least 10 years, which is a reliable track record.
RDY has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)4.51%
Div Incr Years4
Div Non Decr Years4

5.3 Sustainability

RDY pays out 13.06% of its income as dividend. This is a sustainable payout ratio.
The dividend of RDY is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP13.06%
EPS Next 2Y11.87%
EPS Next 3Y8.25%

DR. REDDY'S LABORATORIES-ADR

NYSE:RDY (3/28/2024, 8:04:00 PM)

After market: 73.35 0 (0%)

73.35

+1.04 (+1.44%)

Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap12.21B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 0.65%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE 19.99
Fwd PE 18.01
P/S
P/FCF
P/OCF
P/B
P/tB
EV/EBITDA
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.03
PEG (5Y)0.55
Profitability
Industry RankSector Rank
ROA 14.63%
ROE 19.97%
ROCE
ROIC
ROICexc
ROICexgc
OM 23.35%
PM (TTM) 19.02%
GM 70.71%
FCFM
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.77
Health
Industry RankSector Rank
Debt/Equity 0.02
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 2.59
Quick Ratio 1.91
Altman-Z
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)63.67%
EPS 3Y32.14%
EPS 5Y
EPS growth Q2Q
EPS Next Y19.47%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)19.61%
Revenue growth 3Y12.09%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y