Dr. Reddy's Laboratories Limited

NSEI:DRREDDY Stock Report

Market Cap: ₹993.4b

Dr. Reddy's Laboratories Valuation

Is DRREDDY undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of DRREDDY when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: DRREDDY (₹1191.95) is trading above our estimate of fair value (₹973.46)

Significantly Below Fair Value: DRREDDY is trading above our estimate of fair value.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for DRREDDY?

Key metric: As DRREDDY is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for DRREDDY. This is calculated by dividing DRREDDY's market cap by their current earnings.
What is DRREDDY's PE Ratio?
PE Ratio18.6x
Earnings₹53.33b
Market Cap₹993.43b

Price to Earnings Ratio vs Peers

How does DRREDDY's PE Ratio compare to its peers?

The above table shows the PE ratio for DRREDDY vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average36x
ZYDUSLIFE Zydus Lifesciences
22.3x0.6%₹954.6b
500420 Torrent Pharmaceuticals
60.2x22.7%₹1.1t
500257 Lupin
34.7x16.4%₹911.9b
CIPLA Cipla
26.9x7.3%₹1.2t
DRREDDY Dr. Reddy's Laboratories
18.6x-1.0%₹993.4b

Price-To-Earnings vs Peers: DRREDDY is good value based on its Price-To-Earnings Ratio (18.6x) compared to the peer average (36x).

Price to Earnings Ratio vs Industry

How does DRREDDY's PE Ratio compare vs other companies in the IN Pharmaceuticals Industry?

2 CompaniesPrice / EarningsEstimated GrowthMarket Cap
INDSWFTLAB Ind-Swift Laboratories
1.5xn/aUS$64.93m
524652 Ind-Swift
2.1xn/aUS$13.44m
No more companies available in this PE range
DRREDDY 18.6xIndustry Avg. 33.7xNo. of Companies17PE020406080100+
2 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: DRREDDY is good value based on its Price-To-Earnings Ratio (18.6x) compared to the Indian Pharmaceuticals industry average (33.7x).

Price to Earnings Ratio vs Fair Ratio

What is DRREDDY's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

DRREDDY PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio18.6x
Fair PE Ratio34.9x

Price-To-Earnings vs Fair Ratio: DRREDDY is good value based on its Price-To-Earnings Ratio (18.6x) compared to the estimated Fair Price-To-Earnings Ratio (34.9x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst DRREDDY forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
Current₹1,191.95
₹1,336.87
+12.2%
12.0%₹1,655.00₹969.00n/a39
Nov ’25₹1,259.60
₹1,322.95
+5.0%
12.3%₹1,713.00₹941.00n/a39
Oct ’25₹1,349.82
₹1,327.00
-1.7%
11.5%₹1,602.00₹941.00n/a38
Sep ’25₹1,406.27
₹1,324.06
-5.8%
11.3%₹1,602.00₹941.00n/a37
Aug ’25₹1,377.59
₹1,313.21
-4.7%
11.4%₹1,602.00₹941.00n/a36
Jul ’25₹1,270.74
₹1,232.29
-3.0%
11.7%₹1,500.00₹849.00n/a36
Jun ’25₹1,158.37
₹1,218.68
+5.2%
11.4%₹1,500.00₹849.00n/a37
May ’25₹1,240.86
₹1,199.06
-3.4%
10.8%₹1,357.00₹783.00n/a36
Apr ’25₹1,250.07
₹1,195.52
-4.4%
11.3%₹1,517.40₹783.00n/a36
Mar ’25₹1,238.71
₹1,193.77
-3.6%
11.2%₹1,517.40₹783.00n/a37
Feb ’25₹1,198.63
₹1,191.63
-0.6%
11.1%₹1,517.40₹783.00n/a37
Jan ’25₹1,164.33
₹1,134.35
-2.6%
10.7%₹1,310.00₹754.60n/a37
Dec ’24₹1,149.88
₹1,132.06
-1.5%
10.7%₹1,310.00₹754.60n/a38
Nov ’24₹1,069.29
₹1,137.22
+6.4%
10.9%₹1,312.00₹754.60₹1,259.6038
Oct ’24₹1,117.40
₹1,109.61
-0.7%
11.7%₹1,312.00₹758.80₹1,349.8238
Sep ’24₹1,115.71
₹1,103.21
-1.1%
12.2%₹1,312.00₹758.80₹1,406.2739
Aug ’24₹1,133.41
₹1,099.05
-3.0%
12.0%₹1,312.00₹758.80₹1,377.5939
Jul ’24₹1,031.92
₹994.76
-3.6%
11.5%₹1,200.00₹710.00₹1,270.7436
Jun ’24₹910.41
₹993.51
+9.1%
11.3%₹1,200.00₹710.00₹1,158.3738
May ’24₹985.97
₹993.14
+0.7%
9.8%₹1,178.00₹710.00₹1,240.8638
Apr ’24₹924.55
₹982.24
+6.2%
9.5%₹1,178.00₹710.00₹1,250.0738
Mar ’24₹868.84
₹978.80
+12.7%
9.4%₹1,178.00₹710.00₹1,238.7139
Feb ’24₹870.30
₹976.71
+12.2%
9.6%₹1,178.00₹710.00₹1,198.6339
Jan ’24₹847.51
₹1,000.25
+18.0%
9.3%₹1,192.00₹720.00₹1,164.3338
Dec ’23₹894.87
₹1,000.25
+11.8%
9.3%₹1,192.00₹720.00₹1,149.8838
Nov ’23₹907.06
₹1,000.52
+10.3%
9.2%₹1,192.00₹720.00₹1,069.2938

Analyst Forecast: Target price is less than 20% higher than the current share price.

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