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

• Market Cap: ₹1.07T
• Dividend Yield: 0.63%
• Average Volume (3M): 225.11K
• Price to Earnings (P/E): 18.2
• Beta (1Y): 0.77
• 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): 17.25
• Shares Outstanding: 834,591,300
• 10 Day Avg. Volume: 499,682
• 30 Day Avg. Volume: 225,111
• PEG Ratio: 11.98
• Price to Book (P/B): 2.88
• Price to Sales (P/S): 2.95
• P/FCF Ratio: 50.79
• 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: ₹1,433.33
• Price Target Upside: 11.94% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: ₹1,394.00 ▲(8.87% Upside)

Dr. Reddy's Laboratories Ltd. demonstrates strong financial performance with consistent profitability and robust cash generation. However, technical indicators suggest a neutral trend, and valuation metrics indicate the stock is fairly valued. The earnings call highlighted growth in emerging markets but also pointed out challenges in the U.S. generics market and regulatory issues. These factors collectively contribute to a balanced overall stock score.

Positive Factors

Revenue Growth

The consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term financial stability.

Emerging Markets Performance

Strong performance in emerging markets suggests successful market penetration and expansion, which can drive future growth.

Strong India Business Growth

Robust growth in the India market underscores the company's competitive position and potential for continued domestic expansion.

Negative Factors

Decline in U.S. Generics Business

The decline in the U.S. generics market highlights competitive pressures and pricing challenges, potentially impacting profitability.

Gross Profit Margin Decline

A declining gross profit margin suggests cost pressures and pricing challenges, which may affect long-term profitability.

Regulatory Challenges

Regulatory challenges can lead to operational disruptions and increased compliance costs, affecting the company's market position.

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 shows strong financial health with consistent revenue growth and solid profitability. The income statement is robust, with a Revenue Growth Rate of 11.4% TTM and a Gross Profit Margin of 57.6% TTM. The balance sheet is stable with a low Debt-to-Equity Ratio of 0.14 TTM. However, there is room for improvement in operational efficiency, as indicated by slight declines in EBIT and EBITDA margins.

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: Positive
• Last Price: 1280.40
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:DRREDDY, the sentiment is Positive. The current price of 1280.4 is above the 20-day moving average (MA) of 1261.36, above the 50-day MA of 1249.54, and above the 200-day MA of 1234.01, indicating a bullish trend. The MACD of 8.31 indicates Negative momentum. The RSI at 55.74 is Neutral, neither overbought nor oversold. The STOCH value of 80.21 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
DRREDDY	74 Outperform	₹1.07T	18.20	―	0.63%	14.10%	9.72%
AUROPHARMA	74 Outperform	₹684.30B	19.99	―	0.34%	7.33%	-3.79%
LUPIN	72 Outperform	₹954.47B	22.06	―	0.57%	15.49%	64.37%
ZYDUSLIFE	72 Outperform	₹919.60B	18.69	―	1.20%	14.01%	14.62%
CIPLA	68 Neutral	₹1.21T	22.27	―	0.87%	6.93%	21.55%
TORNTPHARM	66 Neutral	₹1.27T	59.42	―	0.85%	9.11%	18.76%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Dr. Reddy's Laboratories Ltd. Corporate Events

Dr. Reddy’s Laboratories Releases Q2 FY26 Earnings Call Transcript

Dr. Reddy’s Laboratories Ltd. has released the transcript of its earnings call for the quarter and half-year ending September 30, 2025. This disclosure is part of the company’s compliance with regulatory requirements, and the transcript is available on their website. The earnings call, conducted on October 24, 2025, featured key management figures, including the CEO and CFO, discussing the company’s financial performance and strategic outlook. This announcement provides stakeholders with insights into the company’s operational and financial health, potentially impacting investor decisions and market perceptions.

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.