Dr. Reddy's Laboratories RDY
IndiaHealthcare · Drug Manufacturers - Specialty & GenericUSD
13.24 USD (+7.9%)
5 analysts
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Dr. Reddy's Laboratories is an Indian pharmaceutical company that develops, manufactures, and markets generic and branded medicines, with a global presence in markets such as the U.S., Europe, and India.
Key points
from its scores- ✕Weak growth0.8
- ✕Poor share-price trend2.0
- ✕Little competitive advantage3.3
AI analysis
bottom line, main risk, context and newsThe company has a sound balance sheet but faces operational and growth challenges that limit its re-rating potential.
Dr. Reddy's shows solid financial health with net cash, but its quality and growth are weak: operating margin is low (4.25%), cash conversion is negative, and earnings are down -68.70%, which weighs on its valuation and appeal.
The main risk is the sharp decline in earnings (-68.70%) and negative cash conversion, indicating underlying operational issues that could persist.
Context and risks
Dr. Reddy's is domiciled in India, a market with weak institutional governance and limited minority shareholder protection, adding a governance risk not captured by financial metrics. Additionally, its U.S. generics business is exposed to a competitive regulatory and pricing environment, with constant pressure on margins.
Is Dr. Reddy's Laboratories stock cheap or expensive?
at the analysis dateOn P/E and EV / EBITDA, it trades in line with the Healthcare median (within 15%).
| Multiple | Company | Sector | Difference |
|---|---|---|---|
| P/E | 27.9 | 26.7 | +4% |
| EV / EBITDA | 17.9 | 14.5 | +24% |
| Price / book | 2.6 | 4.1 | −36% |
| Price / sales | 3.0 | 3.4 | −13% |
Sector: median of the 217 Healthcare companies analysed. In bold, the multiples used for the comparison.
Valuation score: 3.9 out of 10 (median for Healthcare: 4.7).
Average analyst target: 13.24 USD, +7.9% versus the price.
Classic formulas with standard assumptions (10.0% growth, 8-9% discount rate). Indicative only: they change a lot with the assumptions and are not a recommendation.
Work out its fair value yourself →How much would you have made investing every month? →
Comparing it with its sector does not say whether it is a good buy: this is not investment advice.
Score by category
0 to 10 · hover overtap each one to see what it measuresKey metrics
at the analysis date · compared with the Healthcare medianValuation
- P/E
- 27.9
- Forward P/E
- 19.0
- EV / EBITDA
- 17.9
- Price / book
- 2.6
- Price / sales
- 3.0
- PEG
- 1.67
- Market cap
- 10.2B USD
- Enterprise value
- 978.4B INR
Profitability
- ROE
- 8.8%
- ROA
- 4.0%
- ROIC (approx.)
- 3.1%
- Gross margin
- 50.2%
- Operating margin
- 4.3%
- Net margin
- 10.0%
- Free cash flow
- −3.9B INR
- FCF yield
- −0.4%
- Cash conversion
- −7%
Solvency
- Total debt
- 72.0B INR
- Net debt
- −9.5B INR
- Cash
- 81.4B INR
- EBITDA
- 54.7B INR
- Net debt / EBITDA
- −0.17
- Debt / equity
- 18.61
- Current ratio
- 1.90
- Quick ratio
- 1.16
Growth
- Revenue growth
- −5.6%
- Earnings growth
- −68.7%
- EPS (TTM)
- 0.44 USD
- EPS (forward)
- 0.64 USD
Dividend
- Dividend yield
- 0.7%
- Payout
- 19.7%
Risk and market
- Beta
- 0.25
- Analyst consensus
- none (5)
- Target price
- 13.24 USD
- 52-week range
- 11.36 – 15.67
Recent news
All RDY news →Compare it with its sector
All 217 in Healthcare →Frequently asked questions about Dr. Reddy's Laboratories
Is Dr. Reddy's Laboratories stock cheap or expensive?
On P/E and EV / EBITDA, it trades in line with the Healthcare median (within 15%). Valuation score: 3.9 out of 10 (median for Healthcare: 4.7). Average analyst target: 13.24 USD, +7.9% versus the price. This is not investment advice.
What score does Dr. Reddy's Laboratories get on MeridIAn Screener?
It scores 4.0 out of 10, rank 1,973 of 2,130 (better than 7% of the companies analysed). Its strongest category is Financial health (6.6) and its weakest, Growth (0.8). Analysis of 08/10/2026.
What is Dr. Reddy's Laboratories's P/E ratio?
Its P/E is 27.9: the share price equals 27.9 times earnings per share over the last 12 months. The Healthcare median is 26.7. Based on the earnings analysts expect, the forward P/E is 19.0.
How much is Dr. Reddy's Laboratories worth on the stock market?
Its market capitalisation is 10.2B USD and its enterprise value, debt included, is 978.4B USD.
How much debt does Dr. Reddy's Laboratories have?
It has more cash than debt: net cash of 9.5B INR.
Does Dr. Reddy's Laboratories pay a dividend?
Yes: its dividend yield is 0.65% and it pays out 20% of its earnings.
How has Dr. Reddy's Laboratories stock performed over the last year?
It has fallen 13.8% over the last year, excluding dividends. Over the last 52 weeks it has traded between 11.36 and 15.67 USD. Past performance does not guarantee future results.
What do analysts think of Dr. Reddy's Laboratories?
5 analysts cover it; their average recommendation is “none” and their average target is 13.24 USD (+7.9% versus the price). It is an estimate, not market data.