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INVESTMENT INSIGHTS

Check Before You Invest : Dr. Reddys Laboratories Ltd

BSE: 500124 NSE: DRREDDY ISIN: INE089A01031
  |   Sector:  Healthcare   |   Industry:  Pharmaceuticals & Drugs

Snapshot

Q.1 Which industry/sub-sector does Dr. Reddys Laboratories Ltd belong to?
Dr. Reddys Laboratories Ltd belongs to the Healthcare sector, operating specifically within the Pharmaceuticals & Drugs segment.
Q.2 Is Dr. Reddys Laboratories Ltd a good quality company?
Dr. Reddys Laboratories Ltd is a good quality company, based on a consistently good 10 year financial track record.
Q.3 Is Dr. Reddys Laboratories Ltd undervalued or overvalued?
Dr. Reddys Laboratories Ltd appears Somewhat Undervalued, as its key valuation ratios are below with their past averages.
Q.4 Is Dr. Reddys Laboratories Ltd a good buy now?
Dr. Reddys Laboratories Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of Dr. Reddys Laboratories Ltd?
Dr. Reddys Laboratories Ltd revenue growth is 16.5% for FY-2025 , which is above its 5 year CAGR of 13.3% , indicating faster growth.
Q.2 Gross Profit margin of Dr. Reddys Laboratories Ltd?
Dr. Reddys Laboratories Ltd Gross profit margin which is the profit after deduction of direct costs, is 28.7% for FY-2025 , which is in line with its 5 year median of 28.7% , indicating stable margins.
Q.3 Operating Profit Margin of Dr. Reddys Laboratories Ltd?
Dr. Reddys Laboratories Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 26.18% for FY-2025 , which is in line with its 5 year median of 26.18% indicating stable margins.
Q.4 Net Profit Margin of Dr. Reddys Laboratories Ltd?
Dr. Reddys Laboratories Ltd Net Profit Margin is 17.54% for FY-2025 , is in line with with its 5 year median of 17.54%, indicating stable margins.
Current Level Historic Median
Gross Profit Margin 28.7 28.7
Operating Profit Margin 26.18 26.18
Net Profit Margin 17.54 17.54
Q.5 Return on Asset of Dr. Reddys Laboratories Ltd?
Dr. Reddys Laboratories Ltd Return on Asset is 13.41%, which is in line with its 5 year historical median of 13.41%, indicating stable asset utilization efficiency.
Q.6 Return on Equity (ROE) of Dr. Reddys Laboratories Ltd?
Dr. Reddys Laboratories Ltd Return on equity is 18.61% for FY-2025 , which is in line with its historical median of 18.61%, indicating the business is making similar use of its shareholders capital.
Q.7 Return on capital employed (ROCE) of Dr. Reddys Laboratories Ltd?
Dr. Reddys Laboratories Ltd Return on capital employed is 23.25% for FY-2025 , which is above its estimated weighted average cost of capital(WACC) 11.25%, indicating value creation.
Q.8 Cash conversion cycle of Dr. Reddys Laboratories Ltd?
Dr. Reddys Laboratories Ltd Cash conversion cycle is 131 days, above its historical median of 131 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level Historic Median
Asset Turnover 0.76 0.8
ROE 18.61 18.61
ROCE 23.25 23.25
Cash Conversion Cycle 131 days 131 days
Q.9 Debt to Equity ratio of Dr. Reddys Laboratories Ltd?
Dr. Reddys Laboratories Ltd Debt-to-Equity ratio is 0.14 , which is above with the industry average of 0.13 , indicating higher debt levels in the industry.
Q.10 Debt to cash flow from operations of Dr. Reddys Laboratories Ltd?
Dr. Reddys Laboratories Ltd Debt to cash flow from operations is 1.01 , which is at a healthy level.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Dr. Reddys Laboratories Ltd?
Promoters hold 26.63% of the Dr. Reddys Laboratories Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of Dr. Reddys Laboratories Ltd vs industry peers?
Dr. Reddys Laboratories Ltd revenue CAGR is 13.26% , compared to the industry median CAGR of 8.87% , indicating faster growth and gaining its market share.
Profit Metrics
Current Level Industry Median
Revenue 32,643.9 8,127.2
Gross Profit 9,368.8 1,337.7
Operating Profit 8,547 1,810
Net Profit 5,725 970
Operating Efficiency
Current Level Industry Median
Asset Turnover 0.76 0.8
ROE 18.61 18.61
ROCE 23.25 17.96
Cash Conversion Cycle (days) 130.54 76

Valuation & price assessment

Q.1 Stock return of Dr. Reddys Laboratories Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 7.8% based on the current price.
Q.2 What return has the stock given over the last decade?
9Y 5Y 3Y 1Y
Share Price 7.8% 5.6% 11% 12.4%
Q.3 Valuation ratios of Dr. Reddys Laboratories Ltd vs historical?
The current P/E is lower that its historical median.
Q.4 How do the current valuation ratios measure up against the historic numbers and the current industry numbers?
Valuation Ratios Current Historic Median Industry Median
Price to Earnings 18.24 20.07 40.28
Price to Book 2.73 3.48 2.77
Price to Sales 2.98 3.47 2.65
EV to EBITDA 10.98 11.63 15.67

Check more companies

1. Dr. Reddys Lab
2. Lupin
3. Zydus Lifesciences
4. Mankind Pharma
5. Aurobindo Pharma
6. Alkem Laboratories
7. Glenmark Pharma
8. Laurus Labs
9. Biocon
10. Abbott India
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