Dr Reddy's Laboratories (RDY) AI Stock Analysis

• Market Cap: $12.44B
• Dividend Yield: 0.64%
• Average Volume (3M): 1.59M
• Price to Earnings (P/E): 18.6
• Beta (1Y): 0.43
• Revenue Growth: 14.23%
• EPS Growth: -0.84%
• Country: US
• Employees: 27,048
• Sector: Healthcare
• Sector Strength: 47
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 0.22
• Shares Outstanding: 834,542,700
• 10 Day Avg. Volume: 1,593,355
• 30 Day Avg. Volume: 1,589,084
• PEG Ratio: 0.27
• Price to Book (P/B): 3.32
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 21.94
• 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: $16.90
• Price Target Upside: 13.12% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 77 Outperform
• Price Target: $17.50 ▲(17.14%Upside)

Dr Reddy's Laboratories' strong financial performance is the most significant factor, underscored by consistent revenue growth and profitability. Technical analysis supports a favorable stock trend, although valuation is fair with modest income potential. The absence of earnings call and corporate events data did not impact the overall score.

Dr Reddy's Laboratories Business Overview & Revenue Model

Company Description

Dr. Reddy's Laboratories Limited, together with its subsidiaries, operates as an integrated pharmaceutical company worldwide. It operates through Global Generics, Pharmaceutical Services and Active Ingredients (PSAI), Proprietary Products, and Others segments. The company's Global Generics segment manufactures and markets prescription and over-the-counter finished pharmaceutical products that are marketed under a brand name or as a generic finished dosages with therapeutic equivalence to branded formulations. This segment also engages in the biologics business. The PSAI segment manufactures and markets active pharmaceutical ingredients and intermediates, which are principal ingredients for finished pharmaceutical products. This segment also provides contract research services; and manufactures and sells active pharmaceutical ingredients and steroids in accordance with the specific customer requirements. Its Proprietary Products segment focuses on the research and development of differentiated formulations. The Others segment engages in developing therapies in the fields of oncology and inflammation. The therapeutic categories primarily include gastro-intestinal, cardiovascular, anti-diabetic, dermatology, oncology, respiratory, stomatology, urology, and nephrology. The company has a collaboration, license, and option agreement with Curis, Inc. to discover, develop, and commercialize small molecule antagonists for immuno-oncology and precision oncology targets. Dr. Reddy's Laboratories Limited was incorporated in 1984 and is headquartered in Hyderabad, India.

How the Company Makes Money

Dr. Reddy's Laboratories generates revenue through multiple streams. Its primary source of income is the sale of generic and branded pharmaceutical products across global markets, including India, the United States, and other international regions. The company also earns from the production and sale of active pharmaceutical ingredients (APIs) to other manufacturers. Furthermore, Dr. Reddy's is involved in the biosimilar segment, providing alternatives to biologic drugs, which is a growing area of revenue. Partnerships and collaborations with other pharmaceutical entities, research institutions, and healthcare organizations enhance its product offerings and market reach, contributing to its financial performance. Additionally, Dr. Reddy's invests in research and development to create innovative products, ensuring long-term revenue growth through new and improved therapeutic solutions.

Dr Reddy's Laboratories Financial Statement Overview

Summary

Dr Reddy's Laboratories demonstrates strong financial health overall, with impressive revenue growth and profitability metrics. The balance sheet is solid, with low leverage and high equity ratios, ensuring financial stability. However, there is room for improvement in cash flow management, particularly in enhancing free cash flow generation relative to net income.

Income Statement

Dr Reddy's Laboratories shows strong revenue growth with a 11.51% increase in TTM compared to the previous annual period. The gross profit margin stands at 59.32%, and the net profit margin is a healthy 17.24% for the TTM, indicating efficient cost management and profitability. EBIT and EBITDA margins are strong at 22.15% and 28.40% respectively, reflecting operational efficiency.

Balance Sheet

The company maintains a solid equity base, as evidenced by a debt-to-equity ratio of 0.16, indicating low financial leverage. Return on equity (ROE) for the TTM is robust at 16.89%, suggesting effective use of equity capital to generate profits. The equity ratio stands at 66.03%, highlighting financial stability and a strong balance sheet.

Cash Flow

Free cash flow has decreased from previous periods, with a notable drop in free cash flow growth rate. The operating cash flow to net income ratio is 0.67, indicating that net income is well-supported by operating cash flows, although this has declined compared to previous years. Free cash flow to net income ratio is 0.12, showing room for improvement in cash generation relative to earnings.

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement
Total Revenue	311.31B	279.16B	245.88B	214.39B	189.72B	174.60B
Gross Profit	184.65B	163.61B	202.97B	113.84B	103.08B	94.01B
EBITDA	88.43B	88.42B	74.43B	47.74B	45.71B	41.78B
Net Income	53.68B	55.68B	45.07B	23.57B	17.24B	19.50B
Balance Sheet
Total Assets	481.06B	387.52B	322.85B	296.65B	265.49B	232.24B
Cash, Cash Equivalents and Short-Term Investments	59.18B	81.47B	66.75B	44.37B	34.57B	25.74B
Total Debt	51.09B	20.02B	13.47B	33.84B	30.31B	22.10B
Total Liabilities	159.49B	106.97B	89.99B	106.13B	90.51B	77.25B
Stockholders Equity	317.72B	280.55B	232.86B	190.53B	174.98B	154.99B
Cash Flow
Free Cash Flow	6.52B	18.00B	40.01B	9.06B	23.14B	23.73B
Operating Cash Flow	35.95B	45.43B	58.87B	28.11B	35.70B	29.84B
Investing Cash Flow	-56.13B	-40.28B	-41.37B	-26.39B	-22.66B	-4.92B
Financing Cash Flow	25.75B	-3.76B	-26.86B	-2.42B	-298.00M	-25.16B

Dr Reddy's Laboratories Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 14.94
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RDY, the sentiment is Positive. The current price of 14.94 is below the 20-day moving average (MA) of 15.41, above the 50-day MA of 14.64, and above the 200-day MA of 14.48, indicating a neutral trend. The MACD of 0.10 indicates Positive momentum. The RSI at 45.20 is Neutral, neither overbought nor oversold. The STOCH value of 7.35 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RDY.

Dr Reddy's Laboratories Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RDY	77 Outperform	$12.44B	18.61	18.36%	0.64%	14.23%	-0.84%
LNTH	76 Outperform	$5.49B	22.59	24.11%	―	12.53%	-45.33%
NBIX	74 Outperform	$12.41B	42.62	12.43%	―	21.73%	-19.24%
ITCI	63 Neutral	$14.05B	―	-8.58%	―	46.62%	50.50%
TEVA	57 Neutral	$19.25B	―	-18.98%	―	3.38%	-175.90%
VTRS	54 Neutral	$10.77B	―	-21.25%	5.38%	-6.88%	-6809.78%
Sector *	51 Neutral	$7.55B	0.30	-61.90%	2.27%	17.11%	1.58%