Dr. Reddy's Laboratories Limited Fundamental Analysis (BSE: DRREDDY.BO)
Dr. Reddy's Laboratories Limited Fundamental Analysis (BSE: DRREDDY.BO)
Dr. Reddy's Laboratories Limited (BSE: DRREDDY.BO) shows moderate financial fundamentals with a PE ratio of 28.97, profit margin of 10.00%, and ROE of 8.88%. The company generates $331.1B in annual revenue with strong year-over-year growth of 16.61%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 75.6/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze DRREDDY.BO's fundamental strength across five key dimensions:
Efficiency Score
WeakDRREDDY.BO struggles to generate sufficient returns from assets.
Valuation Score
ModerateDRREDDY.BO shows balanced valuation metrics.
Growth Score
ModerateDRREDDY.BO shows steady but slowing expansion.
Financial Health Score
ExcellentDRREDDY.BO maintains a strong and stable balance sheet.
Profitability Score
WeakDRREDDY.BO struggles to sustain strong margins.
Key Financial Metrics
Is DRREDDY.BO Expensive or Cheap?
P/E Ratio
DRREDDY.BO trades at 28.97 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, DRREDDY.BO's PEG of -0.69 indicates potential undervaluation.
Price to Book
The market values Dr. Reddy's Laboratories Limited at 2.50 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 15.62 times EBITDA. This signals the market has high growth expectations.
How Well Does DRREDDY.BO Make Money?
Net Profit Margin
For every $100 in sales, Dr. Reddy's Laboratories Limited keeps $10.00 as profit after all expenses.
Operating Margin
Core operations generate 10.62 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $8.88 in profit for every $100 of shareholder equity.
ROA
Dr. Reddy's Laboratories Limited generates $5.75 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Dr. Reddy's Laboratories Limited produces operating cash flow of $39.78B, showing steady but balanced cash generation.
Free Cash Flow
Dr. Reddy's Laboratories Limited produces free cash flow of $14.70B, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $17.66 in free cash annually.
FCF Yield
DRREDDY.BO converts 1.53% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
28.97
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-0.69
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.50
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.89
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.19
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.90
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.09
vs 25 benchmark
ROA
Return on assets percentage
0.06
vs 25 benchmark
ROCE
Return on capital employed
0.08
vs 25 benchmark
How DRREDDY.BO Stacks Against Its Sector Peers
| Metric | DRREDDY.BO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 28.97 | 29.15 | Neutral |
| ROE | 8.88% | 492.00% | Weak |
| Net Margin | 10.00% | -11540.00% (disorted) | Weak |
| Debt/Equity | 0.19 | 0.79 | Strong (Low Leverage) |
| Current Ratio | 1.90 | 5.18 | Neutral |
| ROA | 5.75% | -130.00% (disorted) | Weak |
DRREDDY.BO outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Dr. Reddy's Laboratories Limited's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
85.59%
Industry Style: Defensive, Growth, Innovation
High GrowthEPS CAGR
188.67%
Industry Style: Defensive, Growth, Innovation
High GrowthFCF CAGR
54.87%
Industry Style: Defensive, Growth, Innovation
High Growth