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Dr Reddy's Laboratories
(NYSE:RDY)
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Rating:62Neutral
Price Target:
$12.50
▲(6.02% Upside)
Action:Reiterated
Date:07/27/26
RDY scores in the low 60s primarily due to solid underlying financial quality (healthy balance sheet and ongoing profitability) but weakened near-term cash flow and margin/revenue trends. Technicals are a notable drag with the stock trading below all major moving averages. Valuation is middling with a ~29 P/E and modest dividend yield, while the latest earnings call was mixed—constructive guidance for a second-half recovery but with clear execution and regulatory risks tied to semaglutide and the biologics site.
Positive Factors
Balance sheet strength
A low leverage profile and a net cash surplus give the company durable financial flexibility to fund launches, capex and R&D without large refinancing risk. This conservatively capitalized structure lowers solvency risk and supports multi‑year investment in biologics and complex generics.
Negative Factors
Semaglutide supply disruption
Quality and supply setbacks on a high‑value product create persistent revenue and margin risk until resolved. Lost commercial volumes and related provisions can reshape product mix and investor confidence, and repeated supply interruptions could erode payer and distributor relationships over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance sheet strength
A low leverage profile and a net cash surplus give the company durable financial flexibility to fund launches, capex and R&D without large refinancing risk. This conservatively capitalized structure lowers solvency risk and supports multi‑year investment in biologics and complex generics.
Read all positive factors
Dr Reddy's Laboratories (RDY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$10.06B
Dividend Yield0.7%
Average Volume (3M)2.48M
Price to Earnings (P/E)28.9
Beta (1Y)0.37
Revenue Growth-6.76%
EPS Growth-44.33%
CountryUS
Employees27,527
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - Specialty & Generic
Share Statistics
EPS (TTM)39.83
Shares Outstanding834,636,800
10 Day Avg. Volume1,463,425
30 Day Avg. Volume2,476,967
Financial Highlights & Ratios
PEG Ratio-1.17
Price to Book (P/B)2.91
Price to Sales (P/S)3.05
P/FCF Ratio33.56
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$16.18Price Target Upside37.22% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)0.45
Revenue Forecast (FY)$3.65B
Dr Reddy's Laboratories Business Overview & Revenue Model
Company Description
Dr. Reddy's Laboratories Limited, alongside its associated companies, functions as a holistic pharmaceutical entity with a global footprint. Its business operations are divided into several key divisions. The Global Generics segment is responsible...
How the Company Makes Money
Dr. Reddy's makes money primarily by selling pharmaceutical products and related manufacturing outputs across multiple geographies. Key revenue streams include: (1) Generics (finished dosage formulations): The largest driver is typically the sale ...
Dr Reddy's Laboratories Earnings Call Summary
Earnings Call Date:Jul 22, 2026
(Q1-2027)
| % Change Since: |
Next Earnings Date:Oct 23, 2026
Earnings Call Sentiment Neutral
The call presents a mixed but balanced picture. Positive operational momentum is evident in the underlying base business (double-digit growth across geographies), multiple new product launches, regulatory progress on key biologics (abatacept goal date intact) and a healthy balance sheet (net cash INR 3,057 crores). However, near-term performance was meaningfully impacted by the semaglutide API issues (INR 240 crores provision, lost pen volumes), a YoY revenue decline driven by lower lenalidomide sales, notable margin pressure and a Form 483 at the biologics site that introduces execution risk. Management provided mitigation plans, expects semaglutide supply resumption by November, and reiterated medium-term margin targets (around 20% EBITDA ex-sema), but several uncertainties remain in the near term.Positive Updates
Consolidated Revenue and Sequential Recovery
Consolidated revenue of INR 8,071 crores ($853M) for Q1 FY2027, down 5.6% YoY but up 7.4% sequentially, showing quarter-on-quarter recovery despite YoY headwinds.
Negative Updates
YoY Revenue Decline Driven by Key Product Shortfall
Consolidated revenue declined 5.6% YoY primarily due to lower lenalidomide sales and semaglutide disruptions; North America revenues $236M (27% of overall) down 41% YoY (lenalidomide impact) despite +19% QoQ sequential growth.
Read all updates
Q1-2027 Updates
Positive
Negative
Consolidated Revenue and Sequential Recovery
Consolidated revenue of INR 8,071 crores ($853M) for Q1 FY2027, down 5.6% YoY but up 7.4% sequentially, showing quarter-on-quarter recovery despite YoY headwinds.
Read all positive updates
Company Guidance
Management reiterated targets for margin recovery and a stronger second half, guiding that semaglutide commercial supplies should resume by November (180,000 pens sold pre-stop; ~3–4 million pens of lost opportunity; targeting 6–7 million pens Nov–Mar) after taking an INR 240 crore API/inventory provision; Q1 consolidated revenue was INR 8,071 crore ($853M), down 5.6% y/y but up 7.4% sequentially, with consolidated gross margin at 46.5% (down 1,039 bps y/y, up 169 bps q/q; ex-provision 49.4%) and EBITDA of INR 1,009 crore ($107M) or 12.5% (ex-provision 15.4%; management says the run-rate excluding semaglutide is in the high teens—around 18%—and aims for ~20% EBITDA ex-sema), PBT INR 553 crore ($58M, 6.8% margin; ex-provision 9.8%), PAT INR 443 crore ($47M) and diluted EPS INR 5.32; cost and cash metrics include SG&A INR 2,082 crore (36% of revenues), R&D INR 577 crore (7.1% of revenues; R&D guidance 7–8%), Q1 CapEx INR 307 crore with full-year CapEx ~INR 1,800 crore, operating working capital INR 14,353 crore ($1.52B), cash flow before acquisitions -INR 216 crore and net cash surplus INR 3,057 crore ($323M); tax guidance ~24–25% and FX hedges of $354M (at INR 92.34–94.63) and RUB 2.8bn at 1.26.Dr Reddy's Laboratories Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
84
Very Positive
Cash Flow
58
Neutral
| Breakdown | TTM | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 332.83B | 353.47B | 325.54B | 279.16B | 245.88B | 214.39B |
| Gross Profit | 166.92B | 186.52B | 190.43B | 163.61B | 139.34B | 113.84B |
| EBITDA | 55.60B | 83.29B | 96.67B | 88.42B | 74.43B | 45.08B |
| Net Income | 33.17B | 45.09B | 56.54B | 55.68B | 45.07B | 23.57B |
Balance Sheet | ||||||
| Total Assets | 575.30B | 567.88B | 492.99B | 387.52B | 321.85B | 292.83B |
| Cash, Cash Equivalents and Short-Term Investments | 81.43B | 86.08B | 57.91B | 81.47B | 61.80B | 44.37B |
| Total Debt | 71.95B | 75.81B | 46.77B | 20.02B | 13.47B | 33.84B |
| Total Liabilities | 188.57B | 194.95B | 155.82B | 106.97B | 90.86B | 102.30B |
| Stockholders Equity | 383.43B | 369.60B | 333.39B | 280.55B | 230.99B | 190.53B |
Cash Flow | ||||||
| Free Cash Flow | 15.15B | 32.10B | 12.03B | 18.00B | 40.01B | 9.06B |
| Operating Cash Flow | 40.99B | 56.65B | 46.43B | 45.43B | 58.88B | 28.11B |
| Investing Cash Flow | -44.22B | -70.53B | -58.08B | -40.28B | -41.37B | -26.39B |
| Financing Cash Flow | 4.08B | 13.40B | 18.91B | -3.76B | -26.86B | -2.42B |
Dr Reddy's Laboratories Risk Analysis
Dr Reddy's Laboratories disclosed 60 risk factors in its most recent earnings report. Dr Reddy's Laboratories reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Dr Reddy's Laboratories Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $16.77B | 23.66 | 20.67% | ― | 34.42% | 102.44% | |
71 Outperform | $41.33B | 55.63 | 9.30% | ― | 4.33% | ― | |
64 Neutral | $5.85B | 37.58 | -327.25% | ― | 9.28% | 4917.17% | |
62 Neutral | $10.06B | 28.90 | 9.08% | 0.95% | -6.76% | -44.33% | |
57 Neutral | $20.61B | -66.54 | -1.97% | 2.78% | 2.14% | 91.93% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
49 Neutral | $1.40B | -0.77 | -50.65% | 11.50% | -3.62% | -932.84% |
* Healthcare Sector Average
RDY
Dr Reddy's Laboratories
12.07
-1.64
-11.99%
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TEVA
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34.46
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Dr Reddy's Laboratories Corporate Events
Dr. Reddy’s Investors Approve FY26 Accounts, Dividend and New Auditor at 42nd AGM
Jul 23, 2026
Dr. Reddy’s Laboratories convened its 42nd Annual General Meeting on July 23, 2026, via video conferencing and other audio-visual means, in line with Indian corporate and securities regulators’ pandemic-era digital meeting frameworks. ...
Dr. Reddy’s Shareholders Approve New Independent Director and Auditor Appointments at AGM
Jul 23, 2026
On July 23, 2026, Dr. Reddy’s Laboratories reported that shareholders at the 42nd Annual General Meeting approved key governance resolutions. They endorsed the re-appointment of former IAS officer and public policy expert Dr. K.P. Krishnan a...
Dr. Reddy’s Announces Regulator-Driven Auditor Change to Deloitte
Jul 23, 2026
Dr. Reddy’s Laboratories Limited is a global pharmaceutical company headquartered in Hyderabad, India, focused on developing, manufacturing and marketing generic and branded formulations, active pharmaceutical ingredients and biosimilars. Th...
Dr. Reddy’s Files Form 6-K on Publication of Q1 FY27 Unaudited Results
Jul 23, 2026
On July 23, 2026, Dr. Reddy’s Laboratories filed a Form 6-K with the U.S. Securities and Exchange Commission and informed Indian and international stock exchanges that its unaudited financial results for the quarter ended June 30, 2026 had b...
Dr. Reddy’s posts audio of Q1 FY27 earnings call, files July Form 6-K
Jul 23, 2026
Dr. Reddy’s Laboratories filed a Form 6-K with the U.S. Securities and Exchange Commission in July 2026, providing an update to international investors as part of its ongoing reporting obligations as a foreign private issuer. The filing, sig...
Dr. Reddy’s Q1 FY2026 Interim Financials Cleared in Independent Review
Jul 22, 2026
Dr. Reddy’s Laboratories released its unaudited condensed consolidated interim financial statements for the quarter ended June 30, 2026, prepared under IAS 34 and presented in Indian rupees with a certified convenience exchange rate of Rs.94...
Dr. Reddy’s Unveils Q1 FY2027 Results, Bolsters Biologics Leadership and U.S. Audit Oversight
Jul 22, 2026
On July 22, 2026, Dr. Reddy’s Laboratories disclosed that its Board had approved unaudited consolidated and standalone financial results for the quarter ended June 30, 2026, prepared under both IFRS and Indian Accounting Standards, and furni...
Dr. Reddy’s Strengthens Biologics Leadership and Aligns Global Audits with Deloitte
Jul 22, 2026
On July 22, 2026, Dr. Reddy’s Board approved the appointment of biopharmaceutical veteran Dr. Sridevi Khambhampaty as Global Head of Biologics and member of the Management Council, strengthening leadership in biosimilars and biologics RD. He...
Dr. Reddy’s Laboratories Files Form 6-K and Shares Q1 FY27 Results Presentation
Jul 22, 2026
Dr. Reddy’s Laboratories has filed a Form 6-K with the U.S. Securities and Exchange Commission dated July 22, 2026, confirming compliance as a foreign private issuer under the Securities Exchange Act. The filing, signed by Company Secretary ...
Dr. Reddy’s Grants New Employee Stock Options Under 2018 ESOP Scheme
Jul 22, 2026
On July 22, 2026, Dr. Reddy’s Laboratories disclosed that its Nomination, Governance and Compensation Committee had, by resolution passed on the same date, approved a grant of 15,933 Indian stock options to an eligible employee under the Dr....
Dr. Reddy’s to Announce Q1 FY27 Results and Host Earnings Call on July 22, 2026
Jul 13, 2026
Dr. Reddy’s Laboratories announced on July 13, 2026 that it will release its financial results for the quarter ended June 30, 2026 (Q1 FY27) on Wednesday, July 22, 2026, following a meeting of its board of directors. The company plans to dis...
Dr. Reddy’s Files Form 6-K and Publishes July 9 Investor Call Recording
Jul 10, 2026
On July 10, 2026, Dr. Reddy’s Laboratories filed a Form 6-K with the U.S. Securities and Exchange Commission, confirming regulatory compliance as a foreign private issuer. The filing was signed by Company Secretary K Randhir Singh and includ...
Dr. Reddy’s Delays Semaglutide Supply After API Quality Issue Identified
Jul 9, 2026
On July 9, 2026, Dr. Reddy’s Laboratories disclosed that certain batches of its semaglutide product were found to be out of specification due to an issue linked to the active pharmaceutical ingredient used. The company has begun investigatin...
Dr. Reddy’s Sets July 22 Board Meet, Imposes Trading Blackout for Q1 FY27 Results
Jun 22, 2026
Dr. Reddy’s Laboratories has notified exchanges that its board will meet on July 22, 2026, to consider the company’s unaudited standalone and consolidated financial results for the quarter ended June 30, 2026. The move underscores the ...
Dr. Reddy’s Allots 6,730 ESOP Shares, Expands Issued Capital
Jun 22, 2026
On June 19, 2026, Dr. Reddy’s Laboratories allotted 6,730 fully paid equity shares of Re.1 each to eligible employees under its 2002 employee stock option scheme and its 2007 ADR stock option scheme. The allotment followed the exercise of st...
Dr. Reddy’s Announces 42nd AGM via Video Conference and Final Dividend Details
Jun 22, 2026
Dr. Reddy’s Laboratories on June 20, 2026, filed a Form 6-K with the U.S. Securities and Exchange Commission, indicating it had circulated an intimation dated the same day regarding shareholder communications. The filing underscores the comp...
Dr. Reddy’s launches first-to-market generic Bosutinib 400mg in U.S. oncology market
Jun 15, 2026
On June 13, 2026, Dr. Reddy’s Laboratories announced the first-to-market launch of Bosutinib Tablets 400mg, a generic equivalent of Bosulif, in the United States, expanding its oncology portfolio and international footprint. Developed and ma...
Dr. Reddy’s Schedules June 2026 Analyst and Investor Meetings in Mumbai and Hyderabad
Jun 3, 2026
On June 3, 2026, Dr. Reddy’s Laboratories announced that its management will participate in upcoming analyst and institutional investor meetings in India. The company is scheduled to attend an in-person group meeting organized by ICICI Secur...
Dr. Reddy’s Files Clean Secretarial Compliance Report for FY 2026
May 28, 2026
On May 28, 2026, Dr. Reddy’s Laboratories filed a Form 6-K with the U.S. SEC and notified the NSE, BSE, NYSE and NSE IFSC that it had submitted its Annual Secretarial Compliance Report for the year ended March 31, 2026, as required under Reg...
Dr. Reddy’s to Ring NYSE Closing Bell Marking 25 Years on Wall Street
May 28, 2026
Dr. Reddy’s Laboratories announced on May 28, 2026 that it will ring the Closing Bell at the New York Stock Exchange on May 29, 2026 to mark 25 years since its NYSE listing, a milestone dating back to April 2001 when it became the first Asia...
Dr. Reddy’s Files Form 6-K and Publishes FY26 Earnings Call Transcript
May 18, 2026
Dr. Reddy’s Laboratories has filed a Form 6-K with the U.S. Securities and Exchange Commission in May 2026, providing an update to investors and complying with its foreign private issuer reporting obligations. The filing, signed on May 18, 2...
Dr. Reddy’s Schedules Global Investor Meetings for Late May–Early June 2026
May 18, 2026
Dr. Reddy’s Laboratories has disclosed its upcoming schedule of analyst and institutional investor meetings under Indian listing regulations, signaling continued engagement with global capital markets. The disclosure was filed on May 16, 202...
Dr. Reddy’s Launches First Generic Semaglutide Injection in Canada After Health Canada Nod
May 15, 2026
On May 15, 2026, Dr. Reddy’s Laboratories announced the launch of its generic Semaglutide Injection in Canada for once-weekly treatment of adults with type 2 diabetes, following a Notice of Compliance from Health Canada issued on April 28, 2...
Dr. Reddy’s Unveils FY 2026 Results, Dividend and Board, Auditor Changes
May 12, 2026
On 12 May 2026, Dr. Reddy’s Laboratories disclosed to the U.S. SEC that it had published its audited financial results for the quarter and full year ended 31 March 2026, making IFRS and Ind AS consolidated and standalone statements publicly ...
Dr. Reddy’s Files Q4 FY26 Audited Results Presentation with Exchanges
May 12, 2026
On May 12, 2026, Dr. Reddy’s Laboratories filed a Form 6-K with the U.S. Securities and Exchange Commission, furnishing an intimation to stock exchanges about its audited financial results for the quarter and financial year ended March 31, 2...
Dr. Reddy’s posts audio of March-quarter 2026 earnings call for investors
May 12, 2026
Dr. Reddy’s Laboratories has notified stock exchanges that it has made available an audio recording of its earnings call for the quarter ended March 31, 2026, which was conducted on May 12, 2026. The disclosure, made under India’s list...
Dr. Reddy’s Revamps Board, Auditors and Senior Leadership in May 12 Governance Push
May 12, 2026
On May 12, 2026, Dr. Reddy’s Laboratories’ board approved several governance and leadership changes, reinforcing its oversight structure ahead of upcoming shareholder meetings. The company moved to reappoint former civil servant and po...
Dr. Reddy’s Schedules May 2026 Investor Conferences in Mumbai and Singapore
May 12, 2026
On May 11, 2026, Dr. Reddy’s Laboratories announced its upcoming participation in a series of analyst and institutional investor meetings organized by international banks. The company notified stock exchanges in India and the U.S., underscor...
Dr. Reddy’s Grants Over 1.19 Million Employee Stock Options Under ESOP and ADR Schemes
May 11, 2026
On May 11, 2026, Dr. Reddy’s Laboratories’ Nomination, Governance and Compensation Committee approved a significant grant of employee stock options under its existing share-based compensation plans. The company granted 816,119 Indian s...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.