Loading...
RDY logo

Dr. Reddy's Laboratories LimitedNYSE:RDY Stock Report

Market Cap US$11.5b
Share Price
US$13.43
US$13.64
1.5% undervalued intrinsic discount
1Y1.9%
7D-1.5%
Portfolio Value
​
View

Dr. Reddy's Laboratories Limited

NYSE:RDY Stock Report

Market Cap: US$11.5b

Dr. Reddy's Laboratories (RDY) Stock Overview

Operates as an integrated pharmaceutical company North America, Europe, India, Russia, and internationally. More details

RDY fundamental analysis
Snowflake Score
Valuation1/6
Future Growth0/6
Past Performance3/6
Financial Health5/6
Dividends0/6

Rewards

Earnings grew by 5.4% over the past year

Risk Analysis

No risks detected for RDY from our risk checks.

RDY Community Fair Values

Create Narrative

See what others think this stock is worth. Follow their fair value or set your own to get alerts.

View all narratives

Dr. Reddy's Laboratories Limited Competitors

Price History & Performance

Summary of share price highs, lows and changes for Dr. Reddy's Laboratories
Historical stock prices
Current Share Price₹13.43
52 Week High₹16.17
52 Week Low₹12.77
Beta0.29
1 Month Change3.71%
3 Month Change-4.62%
1 Year Change1.90%
3 Year Change22.63%
5 Year Change-7.43%
Change since IPO1,229.70%

Recent News & Updates

Recent updates

Seeking Alpha • Aug 04

Dr. Reddy's: Needs To Invest $0.95 To Produce $1 Of New Revenues

Summary Dr. Reddy’s Laboratories is in a late-cycle earnings phase, due to rising capital intensity and margin pressure despite revenue momentum. Profitability and free cash flow are under strain, with a $0.95 investment needed for every $1 of new sales, tying up cash and eroding corporate value. While RDY enjoys high margins and pricing power in generics, reinvestment needs remain high, and growth is modest at ~3% annually. Upcoming catalysts like semaglutide and abatacept launches are promising, but regulatory hurdles and capital efficiency must improve for a more bullish stance. Read the full article on Seeking Alpha
Seeking Alpha • Jan 30

Dr. Reddy's Lab: Near-Term Worries And Underappreciated Potential Could Lead To Huge Returns

Summary Dr. Reddy's Lab is undervalued due to exaggerated concerns about Revlimid revenue decline and the underappreciated potential of new high-growth products like biosimilars and GLP-1 drugs. Despite the anticipated Revlimid revenue drop, RDY's new product launches in biosimilars and GLP-1 segments are expected to offset losses, driving future growth. RDY's current P/E ratio of 17.7x is near historical lows; a conservative 23x PE, which is equal to the peer median and slightly lower than the median of the historical range. RDY's target price comes up ~55% higher than the current stock price using the 23x PE ratio and FY28 EPS estimates. Read the full article on Seeking Alpha
Seeking Alpha • Aug 13

Dr. Reddy's Laboratories: Economic Factors Square Off To Reiterate Buy

Summary Dr. Reddy's Laboratories stock has risen 29% since my last publication, with additional tailwinds from legislative changes and strong business momentum. The company's enduring competitive advantage as a generics pharmaceutical manufacturer produces abnormally high and persistent returns on capital. Quarterly insights show growth in U.S. generics, Europe, and India markets, with high-quality economic characteristics supporting $107/share intrinsic value. Read the full article on Seeking Alpha
Seeking Alpha • Nov 29

Dr. Reddy's Laboratories: Q2 Earnings Reveals Strong Growth And Promising Advancements

Summary Dr. Reddy's Laboratories reports impressive financial results, with record-breaking sales and profitability in their recent quarter. The company shows strong growth in their India, North America, Europe, and Emerging Markets businesses. Dr. Reddy's focuses on innovation, geographic diversification, and responsible corporate practices for sustained success in the pharmaceutical industry. Read the full article on Seeking Alpha
Seeking Alpha • Oct 27

Dr. Reddy's: Continued Q2 Earnings Growth, Supports Long-Term Investment Outlook

Summary Generic pharmaceutical manufacturers could benefit from structural tailwinds and are attractive in the current market environment. Dr. Reddy's Laboratories Limited (RDY) has posted impressionable Q2 fiscal '24 results, supporting a long-term investment outlook. The data supports a buy over the mid to long-term horizon, with a potential short-term pullback as an attractive entry point. Read the full article on Seeking Alpha
Seeking Alpha • Aug 23

Dr. Reddy's: Growth Supported By New Labels, Profitability

Summary Dr. Reddy's Laboratories stock remains an attractive long-term investment. The company's Q1 FY'24 earnings showed strong growth in total revenues and gross margins, driven by sales expansion in its generic business. RDY's growth is supported by manageable working capital and cash flows, allowing for sustainable expansion. Net-net, reiterate buy. Read the full article on Seeking Alpha
Seeking Alpha • Jun 07

Dr. Reddy's Laboratories: Unpacking The Critical Factors, Reiterate Buy

Summary Dr. Reddy's Laboratories Ltd. (RDY) remains an attractive investment due to its strong Q4 and FY'23 numbers, exposure to the Indian generics market, and consistent new product launches. RDY is well-positioned in the high-growth generics market, along with other favorable business economics. Findings suggest RDY stock could be a buy with a target price of $60/share. Read the full article on Seeking Alpha
Seeking Alpha • Feb 16

Dr. Reddy's Laboratories: Positive Q3 Results, Growth Supportive Of Buy

Summary Growth in key emerging markets, including India and Russian footprint. Positive Q3 FY23 results with top–bottom line growth. Solid FCF conversion and returns on capital. Reinvesting into growth at high rates of return, sporting respectable valuations. Buy thesis supported by these points. Investment Summary Now that we're cemented into the new year our hunt for under-exploited names positioned at all points along the broad healthcare spectrum continues. In this vein, it's essential to get the 'theme' right, especially given the pace of new developments in the biopharma and med-tech domains. One emergent theme that's spurred up in the past 12–24 months has been the skew of distribution of generic drug volumes away from the U.S. towards Indian pharmaceutical companies. This is propelled by FDA regulatory/approval policies and U.S. patent roadblocks facing competing labels. On this front we turned to Dr. Reddy's Laboratories Ltd. (RDY) given its differentiated geographic exposure to generic pharmaceuticals. The firm's Q3 FY23 results [corresponding to Q4 CY22] resulted in strong top-line and core EBITDA growth and we've observed the company is reinvesting ~11% of post-tax earnings at good rates of return to fund its future growth initiatives. Specifically, we've observed several themes in RDY's growth engine that warrant a constructive view, including 1) investment into differentiated and speciality products; 2) exposure to key markets including India and Russia; 3) new investment into its 'Horizon 2' segments; 3) attractive returns on capital; 4) respectable valuation[s]. RDY guides to a long-term 25% EBITDA margin and c.25% long-term return on capital, and, per CEO Erez Israeli's language on the call "double-digit growth and no debt". Subsequently, our observations posit the company is well positioned to achieve these numbers. Net-net, rate buy, seeking objectives of $60–$64 at 21x forward P/E. Exhibit 1. RDY reinvestment into growth Data: RDY Q3 FY23' Investor Presentation RDY Q3 results analysis It was another period of top-bottom line growth for RDY highlighted by its exposure to key growth markets in India and other emerging markets. In particular, revenue at $880mm was a 27% YoY expansion and also 700bps up sequentially, underscored by upsides across the entire company's operating architecture. Looking at the numbers in greater detail, key observations include: Top-line growth accompanied core EBITDA of $238mm on a margin of 29%, above RDY's long-term growth forecasts. This is after a quarterly capital investment of $35mm. A 545bps decompression in gross margin to 59.2%, driven by more favourable product mix and the tail of growth from new product segments. The highlight was pharmaceutical services and active ingredients ("PSAI") gross margin at ~64.5%, in-line with internal estimates. As expected, the firm lost ~17 percentage points of leverage at the SG&A line, given its heavy reinvestment in growth opportunities and broader expense base with new launches. Despite this, the SG&A margin was ~240bps lower YoY at 26.6%. Related to point 3), the R&D investment came in to $58mm at ~7% of top-line sales. Again, this reflected further investment into its pipeline assets, but also reflected digitalization and marketing efforts as well. It pulled this down to earnings of $151mm and converted FCFF of $239mm from operating cash flow of $281mm, a growth of 21%. Turning our optics to the geographic highlights, the standout in our eyes was emerging markets led by its Russian exposure [Exhibit 2]. It launched 29 products in the quarter across its emerging market footprint, leading to 14% YoY expansion in emerging markets and YoY growth in Russia of 29% specifically. In an otherwise unaccessible segment of the market, this provides investors a unique entry to pharmaceuticals in this region. Noteworthy, upsides were realized on the back of biosimilars sales, replicating strong momentum in this segment. Exhibit 2. Data: RDY Q3 FY23' Investor Presentation Key support for the buy thesis is the firm's incremental profitability and returns on capital. Each remain a standout in the RDY investment debate. These trends continued into the last quarter and form quintessential data that must be extrapolated for forward estimates and valuation. Remember, a firm creates value when its ROIC exceeds the hurdle rate, and growth only requires a small reinvestment of post-tax earnings. Here we use rolling TTM periods for a wider look-back window from Q2 CY20'–Q4 CY22'. At the end of the company's third quarter, it realized ~19% TTM ROIC, in-line with historical averages. It's important to note that we recalibrated the company's accounting profits to reflect its investing and earning profile, by capitalizing R&D as an investment at a 12% p.a. amortization schedule. You'll note RDY is a long-term compounder of post-tax earnings, accumulating $4.8Bn in NOPAT and $3.3Bn in earnings over the timeframe listed above. The additional growth on these figures was $78mm and $192mm, respectively [Exhibit 3]. As part of its growth initiatives, the firm invested an additional $530mm to generate these numbers, in other words, it reinvested ~11% of NOPAT for the future growth [~16% of earnings]. Supporting the buy thesis, the incremental return on invested capital ("ROIIC") pulls to ~15% [36% for earnings], supporting the company's high distributions of cash to equity holders. Note, after reinvestment for growth, RDY's earnings growth rate was 5.8% over this period, aligned with the 3-year CAGR in its stock price. Looking ahead, this is critical information in understanding RDY's future growth expectations. We'd remind readers also demonstrates management's propensity to create shareholder value: c.16% reinvestment, for c.36% return, with 84% of earnings distributed as residual cash flows for equity holders. Exhibit 3. Note: EBITA and Intangibles reconciled to include R&D as investment versus OpEx; EBITA with 12% p.a. amortization schedule (Data: Author's LT ROIC analysis, RDY SEC Filings)
Seeking Alpha • Jan 20

Dr. Reddy's prepare to file for Rituxan biosimilar in US, EU as trials completed

Dr. Reddy's Laboratories (NYSE:RDY) said it successfully completed the full set of DRL_RI, a potential biosimilar of Roche's (OTCQX:RHHBY) (OTCQX:RHHBF) and Biogen's (BIIB) blockbuster drug Rituxan (rituximab), for filing in markets including the U.S., Europe and other regions. The Indian drugmaker said DRL_RI is being developed as a biosimilar of rituximab for various indications which include treatment of adults with rheumatoid arthritis, non-Hodgkin's lymphoma, chronic lymphocytic leukemia, pemphigus vulgaris, granulomatosis with polyangiitis and microscopic polyangiitis. Dr. Reddy's noted that rituximab biosimilar has already been approved for marketing in India and over 25 emerging markets. The company undertook further clinical studies — RI-01-003, RI-01-006 (FLINTER) and RI-01-007 — to meet regulatory requirements of highly regulated markets and is now preparing to file applications in the U.S. and EU and other regions globally. Dr. Reddy's added that it collaborating with its partner Fresenius Kabi, a unit of Fresenius Medical Care (FMS), to commercialize the biosimilar in the U.S. Dr. Reddy's plans to sell the product in Europe and other geographies directly.
Seeking Alpha • Nov 07

Dr. Reddy's Needs Time For Generics Sales To Replace Sputnik Revenue

Summary Dr. Reddy's Laboratories is seeing its push into the generics market bear some fruit. However, RDY is also seeing a 23% decline in sales in key segments, due to a drop-off in Sputnik vaccine sales. The decline of COVID related products and the refocusing to new generics has RDY reliant on product launches and dividends to provide shareholder value. Long term share price analysis and sales opportunities from recent generics shows RDY is slightly overvalued and a wait and see. Investment Summary Dr. Reddy's Laboratories (RDY) had large revenue growth in 2021 due to sales of its Sputnik COVID vaccine product offering. Over a million doses were administered in India. Now, after cancellations as well as a drop in demand for the vaccine internationally, RDY needs to refocus on new generics in order to keep pace with revenue targets. Shareholders should be excited but also wary of the success of these new generic launches and acquisitions. Company Recent Financial News RDY's involvement in the Sputnik COVID-19 vaccine in 2021 has boosted EPS, but now, RDY is trying to replace that revenue this year with it's other product segments. Recent profits shows a mixed offering. Gross profit margins rose to 59% in the latest quarter, compared with 53% from last year. Sales in the company's key North American market increased 48% this past quarter. 12% growth in consolidated net profit was reported in Q2 2022 compared to 2021, and revenues improved by 9%. Drilling down, their Global Generics business posted revenue that is +18%. Pharmaceutical Services and Active Ingredients revenue was however down 23%, and 'Others' revenue was down 63%. In the Global Generics segment, North America recorded revenue growth of 48%. The emerging Markets division saw a decrease of 6% since last year. Profit before tax was up 27% in Q2 from last year as well. Long Term Share Price Performance Based on the 5 year stock performance, RDY has generated a YTD gain of 55.27%. By benchmarking this performance against the S&P500, it has performed only slightly better than the S&P500, which has only generated a YTD gain of 50.39%. RDY Moving Averages, 50 vs 200 (Yahoo! Finance) RDY stock price has dropped below MA50 on 26, June 2021 and has stayed below it ever since. However, it is looking to cross the MA50 line if there is further upside to the price. Historically when the price drops below the MA200 line, there is a strong rebound shortly. When the stock price first drops below MA200 in February of 2022, there was still a rebound rally although it was not at the levels of 2020. This was partially due to negative macroeconomic headwinds, recession fears, rising interest rates and supply chain disruption. Currently, the stock price is nearing the MA200 line and if there is any retracement, it could be an opportunity to start a position once it dips below the MA200 line. Currently, RDY is trading at a forward P/E of 20+ which is slightly higher than the average forward PE of the healthcare industry of 15.1. However, this is warranted as the company has been paying a consistent dividend with a payout ratio of at least 15%. The company has also been growing their EPS consistently and even with the recent poor outlook of 2021 and 2022, their EPS and revenue did not miss outside of normal estimates. Hence, this would warrant a higher forward P/E ratio compared to the average healthcare industry. Financial Insights The EBITDA and profit margin has increased from 2018 while gross margin has maintained around the same for the past 5 years. This is a mixed sign as it shows the resilience of management and their ability to maintain cost, given the current supply chain and inflation headwinds that most company are facing, but also possible headwinds and a reliance on new products replacing older ones. Asset productivity has increased over the past 5 years, which shows that management is efficiently using their assets to generate return. Current ratio has increased which shows that there is sufficient liquidity in the balance sheet for management to repay all of their current liabilities if they choose to do so. Interest coverage ratio has also increased which means that management has reduced their debt leverage. RDY Financials (SEC Filing) EPS has increased steadily for the past 5 years, and overall, the company has shown some improvement in the past 5 years. Assuming a market risk premium to be 5.60%, the equity beta of RDY is 0.22. CAPM = 4.01% + (5.60% x 0.22) = 5.24%. Based on their annual report, the interest expense is $644m and the total debt borrowings is $21,711m. Cost of debt was 2.97%, and the equity financing ratio (E/V) was 0.75. The debt financing ratio (D/V) was 0.25. RDY Income Statement, Consolidated (SEC Filing) Dividend payout ratio has been 15%-25%, which is the average dividend payout ratio in the past 5 years. Although it has never reached a bottom of 15%, the outlook of the current macro economy is questionable, and it would be more prudent to forecast a lower dividend payout ratio in the worst case scenario. RDY cash on hand for 2022 was $0.61B. Revenue Insights and Near Term Price Takeaway RDY continues its push into the generics market in both its acquisitions as well as its licensing deals and new product launches. Most recently, RDY's first-to-launch generic versions of extended release antihistamines as well as sorafenib for the treatment of kidney and liver cancers has shown that RDY is pushing towards a broad lineup of generics. It has also increased it's pace of acquisitions and licenses, with Biorphen and related hypotension drugs as well as Lumify white labels for the treatment of eye redness. Off-loading it's non-generic portfolio continues, with I/ONTAK/e7777 coming to mind, an oncology drug focusing on CTCL and potentially PTCL that was a reformulation of a previously approved drug. Fexofenadine HCI and Pseuudoephedrine HCI extended release antihistamines are a generic drug replacement for Allegra-D 24 hr, which had U.S. retail sales of approximately $45 million as of May 2022. Sorafenib tablets are a generic replacement for Nexavar, which had over $750 million in sales in 2020. Cysteine hydrochloride injections are generics for Biorphen and Rezipres injections, with a total addressable market of $174 million in 2022. Brimonidine Tartrate ophthalmic solution, a generic to replace Lumify OTC eyedrops, has a total addressable market of $130 million in 2022. I/ONTAK/e7777 represents a total of $100+ million in one time payments once approved, with revenue share afterwards of an immediately addressable market of $330 million +/-. All told, with several acquisitions and new generic drugs coming online, RDY is hoping to capture part of $634 million in addressable markets as well as part of ~$800 million in ongoing sales from current brand name drug sales from the above generic launches. These represent the largest product launches that aren't hampered by legal action or FDA approval delays, and whose sales should help boost sales across segments to help meet the Sputnik vaccine shortfalls. Incorporating relatively conservative estimates of these sales of 10-20% in the near term as well as applying a margin of safety of 10%, the fair value of RDY would be around $49-$51 per share, in comparison to the current stock price of ~$54. Hence, RDY seems to be slightly overvalued at the moment. To fully capture income from these new generics, RDY needs at least 3-4 quarters to ramp up. Therefore, a higher than $54 share price is justified after sales are reflected of these new generics, assuming RDY is able to capture 40%+ of their addressable market and sales targets. Potential Outside Factors and Downside Risks Fluctuation of Commodity Price
Seeking Alpha • Jul 28

Dr. Reddy's GAAP EPS of $0.90, revenue of $660M misses by $12.78M

Dr. Reddy's press release (NYSE:RDY): Q1 GAAP EPS of $0.90. Revenue of $660M (+5.9% Y/Y) misses by $12.78M.
Seeking Alpha • Jul 22

Dr. Reddy's launches generic drugs for allergies in US

Dr. Reddy's Laboratories Ltd. (NYSE:RDY) announced the first-to-market launch of over-the-counter (OTC) fexofenadine HCl 180 mg and pseudoephedrine HCl 240 mg extended release tablets, the store-brand equivalent of Allegra-D 24 HR in the U.S. market. The company said the drug is an oral antihistamine and nasal decongestant for temporary relief of nasal and sinus congestion due to colds or allergies.
Seeking Alpha • Jul 05

Dr. Reddy's, EQRx team up to develop drugs for cancer, immune-inflammatory diseases

Dr. Reddy's Laboratories said its unit Aurigene, and EQRx are collaborating to develop drug candidates for cancer and immune-inflammatory diseases. Under the agreement, Aurigene will use its small molecule drug discovery platform and will lead drug discovery and pre-clinical development efforts while EQRx will assume responsibility for clinical development, manufacturing, regulatory and commercialization efforts. The companies said they would share funding on development and any commercialization of potential drug candidates.

Shareholder Returns

RDYUS PharmaceuticalsUS Market
7D-1.5%6.2%3.2%
1Y1.9%33.4%31.0%

Return vs Industry: RDY underperformed the US Pharmaceuticals industry which returned 33.4% over the past year.

Return vs Market: RDY underperformed the US Market which returned 31% over the past year.

Price Volatility

Is RDY's price volatile compared to industry and market?
RDY volatility
RDY Average Weekly Movement3.6%
Pharmaceuticals Industry Average Movement9.6%
Market Average Movement7.1%
10% most volatile stocks in US Market16.1%
10% least volatile stocks in US Market3.2%

Stable Share Price: RDY has not had significant price volatility in the past 3 months compared to the US market.

Volatility Over Time: RDY's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
198427,811Erez Israeliwww.drreddys.com

Dr. Reddy's Laboratories Limited, together with its subsidiaries, operates as an integrated pharmaceutical company North America, Europe, India, Russia, and internationally. It operates through Global Generics, Pharmaceutical Services and Active Ingredients (PSAI), and Others segment. The Global Generics segment manufactures and markets prescription and over-the-counter finished pharmaceutical products that are marketed under a brand name or as a generic finished dosages with therapeutic equivalence to branded formulations, as well as engages in the biologics business.

Dr. Reddy's Laboratories Limited Fundamentals Summary

How do Dr. Reddy's Laboratories's earnings and revenue compare to its market cap?
RDY fundamental statistics
Market capUS$11.51b
Earnings (TTM)US$598.86m
Revenue (TTM)US$3.66b
19.2x
P/E Ratio
3.1x
P/S Ratio

Is RDY overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report (TTM)
RDY income statement (TTM)
Revenue₹345.83b
Cost of Revenue₹155.00b
Gross Profit₹190.84b
Other Expenses₹134.25b
Earnings₹56.59b

Last Reported Earnings

Dec 31, 2025

Next Earnings Date

May 12, 2026

Earnings per share (EPS)67.96
Gross Margin55.18%
Net Profit Margin16.36%
Debt/Equity Ratio14.4%

How did RDY perform over the long term?

See historical performance and comparison

Dividends

0.6%
Current Dividend Yield
12%
Payout Ratio

Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2026/05/07 13:35
End of Day Share Price 2026/05/07 00:00
Earnings2025/12/31
Annual Earnings2025/03/31

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* Example for US securities, for non-US equivalent regulatory forms and sources are used.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the world class team who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on Github.

Analyst Sources

Dr. Reddy's Laboratories Limited is covered by 82 analysts. 33 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
Rohit Bhat360 ONE Capital Market Private Limited
Prashant NairAmbit Capital
Nitin BhasinAmbit Capital