Dr. Reddy's Laboratories Ltd. (DRREDDY) AI Stock Analysis

• Market Cap: ₹1.05T
• Dividend Yield: 0.62%
• Average Volume (3M): 225.11K
• Price to Earnings (P/E): 18.4
• Beta (1Y): 0.73
• Revenue Growth: 14.10%
• EPS Growth: 9.72%
• Country: IN
• Employees: 27,048
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 17.30
• Shares Outstanding: 834,574,700
• 10 Day Avg. Volume: 499,682
• 30 Day Avg. Volume: 225,111
• PEG Ratio: 11.95
• Price to Book (P/B): 2.88
• Price to Sales (P/S): 2.95
• P/FCF Ratio: 50.70
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: ₹1,283.33
• Price Target Upside: -0.56% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 3

• Rating: 75 Outperform
• Price Target: ₹1,445.00 ▲(11.97% Upside)

Dr. Reddy's Laboratories is well-positioned with strong financial performance and stable technical indicators. The company's valuation is fair, though challenges in the U.S. market and regulatory issues present risks. The stock's strengths in emerging markets and India provide growth potential.

Dr. Reddy's Laboratories Ltd. Business Overview & Revenue Model

Company Description

Dr. Reddy's Laboratories Ltd. (DRREDDY) is a global pharmaceutical company based in India, specializing in the development, manufacture, and marketing of a wide range of generic and branded medications. The company operates across various sectors, including pharmaceuticals, active pharmaceutical ingredients (APIs), and biotechnology. DRREDDY's core products include prescription medications across multiple therapeutic areas such as oncology, cardiology, and dermatology, as well as over-the-counter products and biosimilars.

How the Company Makes Money

Dr. Reddy's generates revenue primarily through the sale of generic pharmaceuticals, which constitute a significant portion of its earnings. The company develops and markets a diverse portfolio of generic drugs, often capitalizing on the expiration of patents for branded medications. In addition to generics, revenue is also derived from the sale of proprietary drugs and biosimilars. Dr. Reddy's has established partnerships with various healthcare organizations and distributors to enhance its market reach and expand its global footprint. The company's revenue is further supported by its focus on research and development, allowing it to innovate and introduce new products. Additionally, it derives income from the manufacturing of APIs for third-party clients, contributing to its overall financial performance.

Dr. Reddy's Laboratories Ltd. Financial Statement Overview

Summary

Dr. Reddy's Laboratories exhibits strong financial health with consistent revenue growth and solid profitability. The balance sheet is stable with low financial leverage, though there is room for operational efficiency improvements.

Income Statement

Dr. Reddy's Laboratories has demonstrated strong income statement performance with consistent revenue growth, achieving a Revenue Growth Rate of 11.4% TTM. The Gross Profit Margin improved to 57.6% TTM, indicating effective cost management. However, slight declines in EBIT and EBITDA margins to 21.4% and 28.2% respectively, from the previous year, suggest room for operational efficiency improvements.

Balance Sheet

The company maintains a solid balance sheet with a manageable Debt-to-Equity Ratio of 0.14 TTM, reflecting low financial leverage. The Return on Equity is robust at 16.2% TTM, showcasing effective use of equity capital. The Equity Ratio of 67.4% TTM indicates a stable capital structure, though a higher debt level compared to 2024 suggests increased leverage risk.

Cash Flow

Cash flow analysis shows robust Free Cash Flow generation with a growth rate of -4.8% TTM, reflecting stable cash generation capabilities. The Operating Cash Flow to Net Income ratio of 0.93 TTM indicates strong cash conversion efficiency. Despite a slight reduction in Free Cash Flow, the firm effectively supports its operations and investments.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	334.26B	325.54B	279.16B	245.88B	214.39B	189.72B
Gross Profit	192.71B	190.43B	163.61B	139.34B	113.84B	103.08B
EBITDA	88.38B	88.84B	79.29B	66.05B	47.74B	45.71B
Net Income	56.80B	56.54B	55.68B	45.07B	23.57B	17.24B
Balance Sheet
Total Assets	519.54B	492.99B	387.52B	322.85B	296.65B	265.49B
Cash, Cash Equivalents and Short-Term Investments	66.69B	57.91B	81.47B	61.80B	44.37B	34.57B
Total Debt	48.64B	46.77B	20.02B	13.47B	33.84B	30.31B
Total Liabilities	165.78B	155.82B	106.97B	89.99B	106.13B	90.51B
Stockholders Equity	350.06B	333.39B	280.55B	230.99B	190.53B	173.06B
Cash Flow
Free Cash Flow	18.02B	18.92B	18.00B	40.01B	9.06B	23.14B
Operating Cash Flow	52.56B	46.43B	45.43B	58.87B	28.11B	35.70B
Investing Cash Flow	-49.97B	-51.02B	-40.28B	-41.37B	-26.39B	-22.66B
Financing Cash Flow	1.11B	11.86B	-3.76B	-26.86B	-2.42B	-298.00M

Dr. Reddy's Laboratories Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1290.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:DRREDDY, the sentiment is Negative. The current price of 1290.5 is above the 20-day moving average (MA) of 1257.59, above the 50-day MA of 1271.22, and above the 200-day MA of 1232.91, indicating a neutral trend. The MACD of 2.14 indicates Negative momentum. The RSI at 45.44 is Neutral, neither overbought nor oversold. The STOCH value of 65.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IN:DRREDDY.

Dr. Reddy's Laboratories Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AUROPHARMA	―	₹630.26B	18.58	―	0.36%	7.76%	-2.84%
DRREDDY	―	₹1.05T	18.44	―	0.62%	14.10%	9.72%
CIPLA	―	₹1.27T	23.63	―	0.83%	6.40%	25.27%
ZYDUSLIFE	―	₹993.45B	21.73	―	1.10%	14.52%	9.46%
LUPIN	―	₹877.48B	23.70	―	0.62%	12.40%	63.16%
TORNTPHARM	―	₹1.22T	60.49	―	0.89%	7.63%	15.39%
Sector *	―	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Dr. Reddy's Laboratories Ltd. Corporate Events

Dr. Reddy’s Laboratories Receives Positive FDA Inspection Outcome

Dr. Reddy’s Laboratories Ltd. announced that the USFDA has concluded its inspection of the company’s formulations manufacturing facility in Srikakulam, India, with a classification of ‘Voluntary Action Indicated’ (VAI). This outcome indicates that while some issues were identified, they do not require immediate action, allowing the company to continue its operations without significant disruptions. The closure of this inspection is a positive development for Dr. Reddy’s, as it maintains its compliance with regulatory standards, potentially strengthening its market position and reassuring stakeholders about its operational integrity.

Dr. Reddy’s Laboratories Ensures Compliance with SEBI Regulations

Dr. Reddy’s Laboratories Ltd. has submitted a confirmation certificate under Regulation 74(5) of the SEBI (Depositories and Participants) Regulations, 2018, for the quarter ending September 30, 2025. This submission ensures that securities received for dematerialization have been processed and listed appropriately, reflecting the company’s adherence to regulatory compliance and its ongoing commitment to maintaining transparency and trust with its stakeholders.

Dr. Reddy’s Laboratories Releases Q1 FY26 Earnings Call Transcript

Dr. Reddy’s Laboratories Ltd. has released the transcript of its earnings call for the quarter ended June 30, 2025. The call, conducted on July 23, 2025, provides insights into the company’s financial performance and strategic direction. This release is part of their compliance with regulatory requirements and aims to keep stakeholders informed about the company’s operations and market positioning.