QualityDipStocks / Health Care · Pharmaceuticals
Dr. Reddy's Laboratories RDY
Outside our quality screen, so we don’t track its dips. It’s 8% below its 52-week high.
Outside our quality screen, trading well above our fair value estimate.
- Fair value est.
- $9.77−31%
- Market Value
- —
- Off 52-wk high
- −8%
- Risk vs market
- Lowbeta 0.30
3 bullish · 5 bearish See why
Valuation
What we estimate it's worth, and how it ranks on value vs every stock we cover.
Fair value estimate
How the range is computed
Ten-year free-cash-flow DCF. Same 10-year free-cash-flow model as the base: discount rate 9.5% ±1 point and growth 9.7% ±2 points. Bear = 10.5% and 7.7%; bull = 8.5% and 11.7% (both fade to 3%). A model estimate from public filings, not a forecast of where the price will go.
Price is above even the bull case.
What the price implies To be worth today’s price, RDY’s free cash flow would need to grow about 16% a year for five years; our estimate uses 10%.
Risk vs market
How risk vs market is measured
One year of daily returns (Oct 31 to Nov 2, 252 sessions). Beta = how much RDY moved for each 1% move in the S&P 500 (SPY); 1.0 moves with the market. Volatility is the yearly standard deviation of daily returns. Past behavior, not a forecast.
Moves much less than the market, but its own price swings are 2.1× the S&P 500’s (it moves on its own news).
- Beta vs S&P 500
- 0.30
- Volatility
- 27% vs 13% SPY
- Correlation SPY
- 0.15
- Correlation QQQ
- 0.08
How it ranks
Where RDY stands vs every one of the 1,996 stocks we cover that has the number. Longer bar = better.
Not in the top quarter on any of these 5 measures
- Discount to fair value estimate31% · price above our base caseLowest 26%of 1,314
- Free cash flow yield3% · free cash flow vs market capLowest 38%of 1,391
- Dividends + buybacks yield0.6% · cash paid out or used to retire shares, vs market capLowest 26%of 1,836
- Revenue growth, last 12 months+3.2% · vs the 12 months beforeLowest 22%of 1,814
- Operating margin15% · of sales kept as operating profitTop 40%of 1,288
From SEC filings and our fair value estimate model. A ranking, not advice.
Valuation details
DCF $9.77
Assumes 9.7% growth for 5 years (revenue grew 9.7% a year FY24–FY26), fading to 3%; 9.5% discount rate, 3% terminal growth. FCF base $0.42 a share (fiscal year to Mar 31, 2026, converted from INR at 0.01056), from the 20-F filed May 29, 2026. Capex: purchases of property, plant and equipment (from the filing).
Fundamentals
The business itself: sales, profits, cash and debt, from SEC filings.
Bull vs bear
Rule-based from the data on this page, strongest first. Not advice.
Top bullish points 3 of 5
Cash returnsFree cash flow grew 77% over the last 12 months vs the 12 months before.
GrowthSales compounded 11% a year from FY2023 to FY2026.
ValuationPrice / book of 3.0×, below the 5.2× median for the 217 Health Care companies we cover.
Top bearish points 5 of 5
ValuationOur DCF fair value estimate is $9.77, 31% below the price.
ProfitabilityOperating margin narrowed to 15.0% in FY2026 from 24.3% in FY2024 (SEC filings).
ProfitabilityGross margin narrowed to 52.8% in FY2026 from 58.6% in FY2024 (SEC filings).
ProfitabilityReturn on equity fell 8 points in two fiscal years, to 11% in FY2026.
QualityDoesn’t pass our quality screen: no positive free cash flow; ROE under 12% and ROIC under 10%; sales down vs the year-ago quarter.
All fundamentals
P/E 26.0 · FCF yield 3.0% · ROE 12%
Valuation
- P/E
- 26.0×Health Care median 29.0×
- Price / FCF
- 33.4×
- FCF yield
- 3.0%
- EV / EBITDA
- n/aD&A or debt not tagged in SEC data
- Price / sales
- 3.32×
- Price / book
- 2.96×
- Market cap
- $11.8Bprice × diluted shares
- Enterprise value
- n/anot reported in its SEC filings
Growth
- Revenue, 12 months
- $3.5B
- Sales growth, 12 months
- +3.2%vs the 12 months before
- Sales growth, 3 yrs
- +11.0%/yrfrom FY2023
- Diluted EPS, 12 months
- $51.42
- EPS growth, last FY
- −24.1%
- Net income, 12 months
- $452M
- Net income growth
- −24%12 months vs before
Profitability
- Gross margin
- 52.8%
- Operating margin
- 15.0%
- Net margin
- 12.8%
- FCF margin
- 10.0%
- Return on equity
- 12%
- Return on invested capital
- n/aoperating income, debt, equity or cash not tagged
Balance sheet
- Cash & short-term inv.
- $162M
- Total debt
- n/anot reported in its SEC filings
- Net cash
- n/acash or debt not tagged in SEC data
- Debt / equity
- n/adebt or equity not tagged in SEC data
- Interest coverage
- 13.5×operating income / interest
Cash flow & returns
- Free cash flow, 12 months
- $353M
- FCF growth, 12 months
- +77%
- Dividend yield
- 0.60%$70M paid
- Payout ratio
- 16%
- Buybacks, 12 months
- n/anot reported in its SEC filings
- Share count, 1 year
- n/ano quarterly diluted share count
- Stock-based comp
- n/anot reported in its SEC filings
Trailing 12 months to Mar 31, 2026; balance sheet at Mar 31, 2026. From Dr. Reddy's Laboratories’s SEC filings, reported in INR and converted to US dollars. Sparklines show up to six fiscal years. n/a means we don’t hold that number, with the reason. How each is computed.
The business
FCF $-6.6B · Sales −2%
- Free cash flow, 12 months−$6.6B
- Free-cash-flow yield3.0%
- Free-cash-flow margin−2%
- Gross margin50%
- Operating margin15%
- Return on equity7%
- Sales growth (latest quarter vs year-ago quarter)−2%
- Net debt / EBITDA−0.1×
Chart & levels
Where the price is vs its key levels and trends.
Key levels
Every level vs today’s $14.13
- Fair value est.base case$9.77−30.9%
- 52-wk lowlowest close, 1 year$11.38−19.5%
- PriceMon Nov 2 close$14.13you are here
- 52-wk highhighest close, 1 year$15.38+8.8%
Momentum & 52-week range
RSI 76 · 5 days +2.8%
Signals
Reversal signal setups, the public ledger and the next earnings date.
Setup & signals
No setup armed
No setup armed, so there’s no trigger or stop to track yet. Reversal signal rules only run on companies that pass our quality screen.
RDY is outside our quality screen
One text when a published rule fires on one of the 332 quality companies we track: the ticker, the price, the stop and a link to the numbers. Nothing else.
Voices & buzz
Who is talking about it, and how it compares with peers.
Who’s talking about it
Notable investors, executives, analysts and public figures on Dr. Reddy's Laboratories in the last 48 hours. Headlines as published, each linked. Their words, not ours.
No notable mentions in the last 48 hours. Checked Nov 3, 1:01 PM ET.
Compare with peers
Closest in size in Pharmaceuticals
Information only, not investment advice. Fair value estimates and talking points are rule-based model output from public data and can be wrong; stop levels are reference points, not orders. How every number is computed.