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Dr Reddy's Laboratories
(NYSE:RDY)
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Rating:67Neutral
Price Target:
$16.50
▲(17.94% Upside)
Action:Downgraded
Date:05/15/26
The score is driven mainly by solid but weakening fundamentals (margin/ROE compression and higher debt despite growth) and a balanced earnings-call outlook that points to FY27 margin recovery but highlights near-term profitability and working-capital risks. Technicals are neutral-to-soft and valuation support is limited given the P/E and low yield.
Positive Factors
Semaglutide / GLP-1 approvals & launches
Securing first-to-market semaglutide approvals and targeting ~12M pens creates durable exposure to the fast-growing GLP-1 category. Complex peptide capability and multi-market launches diversify revenue beyond commoditized generics and support recurring, higher-margin product streams over the medium term.
Negative Factors
Margin compression and falling profitability
A meaningful decline in net margin over the last two years indicates structural margin pressure from price erosion, product mix shifts and one-offs. Lower margins reduce reinvestment capacity, compress ROE and make long-term earnings more sensitive to competitive and cost dynamics in generics.
Read all positive and negative factors
Positive Factors
Negative Factors
Semaglutide / GLP-1 approvals & launches
Securing first-to-market semaglutide approvals and targeting ~12M pens creates durable exposure to the fast-growing GLP-1 category. Complex peptide capability and multi-market launches diversify revenue beyond commoditized generics and support recurring, higher-margin product streams over the medium term.
Read all positive factors
Dr Reddy's Laboratories (RDY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$11.09B
Dividend Yield0.64%
Average Volume (3M)2.48M
Price to Earnings (P/E)24.2
Beta (1Y)0.34
Revenue Growth-1.06%
EPS Growth-26.71%
CountryUS
Employees27,048
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - Specialty & Generic
Share Statistics
EPS (TTM)51.52
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 Cap101.97
Enterprise Value/Revenue3.35
Enterprise Value/Gross Profit6.36
Enterprise Value/Ebitda14.63
Forecast
1Y Price Target
$16.15Price Target Upside15.43% Upside
Rating ConsensusHold
Number of Analyst Covering2
EPS Forecast (FY)0.53
Revenue Forecast (FY)$3.76B
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:May 12, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Jul 22, 2026
Earnings Call Sentiment Neutral
Balanced. The call highlighted several strategic achievements — record annual revenues, robust product launch and filing cadence, first-to-market semaglutide approval in Canada, abatacept BLA acceptance, completed NRT integration, and strong sustainability recognition. However, Q4 was materially affected by one-off charges (notably a large shelf-stock adjustment and impairments), significant margin pressure (Q4 gross margin down ~760 bps YoY), a sharp quarterly EBITDA decline (-37% YoY), and North America revenue weakness tied to loss of lenalidomide. Management emphasized that many negatives are one-offs or timing/regulatory related and reiterated confidence in base business growth, margin recovery (>50% gross margin target) and semaglutide/abatacept-driven upside, but near-term profitability and working capital remain areas of concern.Positive Updates
Record Annual Revenues
Adjusted full-year revenue of INR 34,046 crores (USD 3.63B), a 4.6% year-over-year increase; company noted 'highest ever annual revenues' despite product-specific headwinds.
Negative Updates
Large One-Off Charges Impacting Reported Profit
Shelf-stock adjustment (SSA) on lenalidomide of INR 453 crores reduced Q4 revenue; additional VAT provision INR 114 crores in Q4 SG&A; impairment charges INR 259 crores in Q4 (INR 352 crores for year) including write-downs for discontinued CAR-T programs and a partnered asset.
Read all updates
Q4-2026 Updates
Positive
Negative
Record Annual Revenues
Adjusted full-year revenue of INR 34,046 crores (USD 3.63B), a 4.6% year-over-year increase; company noted 'highest ever annual revenues' despite product-specific headwinds.
Read all positive updates
Company Guidance
Management guided that the underlying base business should sustain double‑digit growth and that gross margin will improve to above 50% in FY27; key targets and metrics called out included adjusted Q4 revenue excl. the lenalidomide SSA of INR 7,969 crore (USD 849m) and FY26 adjusted revenue INR 34,046 crore (USD 3.63bn), adjusted EBITDA of INR 1,554 crore (19.5%) in Q4 and INR 8,419 crore (24.7%) for FY26, adjusted PBT of INR 994 crore (12.5%) in Q4 and INR 6,463 crore (19%) for FY26 (reported PBTs INR 199 crore Q4 / INR 5,482 crore FY), PAT INR 220 crore Q4 / INR 4,285 crore FY, diluted EPS INR 2.64 Q4 / INR 51.42 FY, operating working capital INR 14,434 crore, capex guidance around INR 2,000 crore next year, FY26 free cash flow INR 2,004 crore and net cash surplus INR 3,271 crore; they expect SG&A to stay at roughly FY26 nominal levels (~31–33% of revenue), R&D to be 7–8% of revenue, and an effective tax rate of 24–25% in FY27. On semaglutide management reiterated prior volume guidance of ~12 million pens in FY27 (about 6–7m by end‑CY26), price floor in the c.$25–$30 per unit range, an expected 3–4m pens/quarter cadence from approved markets with ~50:50 direct vs partner sales and launches in 50+ markets (80+ in 12 months); abatacept IV BLA has been accepted with a likely early‑CY27 launch and biosimilars are expected to scale materially (management referenced potential biosimilar revenue in the mid‑hundreds of millions to roughly $0.5–0.7bn in coming years).Dr Reddy's Laboratories Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
74
Positive
Cash Flow
70
Positive
| Breakdown | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 353.47B | 325.54B | 279.16B | 245.88B | 214.39B |
| Gross Profit | 186.52B | 190.43B | 163.61B | 139.34B | 113.84B |
| EBITDA | 83.29B | 96.67B | 88.42B | 74.43B | 45.08B |
| Net Income | 45.09B | 56.54B | 55.68B | 45.07B | 23.57B |
Balance Sheet | |||||
| Total Assets | 567.88B | 492.99B | 387.52B | 321.85B | 292.83B |
| Cash, Cash Equivalents and Short-Term Investments | 86.08B | 57.91B | 81.47B | 61.80B | 44.37B |
| Total Debt | 75.81B | 46.77B | 20.02B | 13.47B | 33.84B |
| Total Liabilities | 194.95B | 155.82B | 106.97B | 90.86B | 102.30B |
| Stockholders Equity | 369.60B | 333.39B | 280.55B | 230.99B | 190.53B |
Cash Flow | |||||
| Free Cash Flow | 32.10B | 12.03B | 18.00B | 40.01B | 9.06B |
| Operating Cash Flow | 56.65B | 46.43B | 45.43B | 58.88B | 28.11B |
| Investing Cash Flow | -70.53B | -58.08B | -40.28B | -41.37B | -26.39B |
| Financing Cash Flow | 13.40B | 18.91B | -3.76B | -26.86B | -2.42B |
Dr Reddy's Laboratories Technical Analysis
Negative
13.99
Price Trends
13.65
Negative
13.75
Negative
13.84
Negative
Market Momentum
0.11
Positive
40.21
Neutral
12.26
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RDY, the sentiment is Negative. The current price of 13.99 is below the 20-day moving average (MA) of 14.06, above the 50-day MA of 13.65, and above the 200-day MA of 13.84, indicating a bearish trend. The MACD of 0.11 indicates Positive momentum. The RSI at 40.21 is Neutral, neither overbought nor oversold. The STOCH value of 12.26 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RDY.
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 |
|---|---|---|---|---|---|---|---|
86 Outperform | $18.15B | 26.37 | 21.64% | ― | 28.59% | 120.51% | |
67 Neutral | $11.09B | 24.19 | 11.76% | 0.64% | -1.06% | -26.71% | |
61 Neutral | $38.76B | 23.93 | 20.79% | ― | 5.76% | ― | |
59 Neutral | $5.44B | 44.87 | -144.72% | ― | 7.62% | ― | |
57 Neutral | $19.18B | -61.44 | -1.97% | 3.99% | 2.14% | 91.93% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
49 Neutral | $1.44B | -0.79 | -50.65% | 8.48% | -3.62% | -932.84% |
* Healthcare Sector Average
RDY
Dr Reddy's Laboratories
13.19
-1.25
-8.64%
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Dr Reddy's Laboratories Corporate Events
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...
Dr. Reddy’s Board to Weigh Final FY 2025–26 Dividend on April 16 Disclosure
Apr 16, 2026
On April 16, 2026, Dr. Reddy’s Laboratories filed a Form 6-K with the U.S. Securities and Exchange Commission, providing an update to investors as a foreign private issuer under the Securities Exchange Act of 1934. The filing, signed by the ...
Dr. Reddy’s Divests Svaas Wellness Subsidiary in Small April 2026 Deal
Apr 8, 2026
On April 7, 2026, Dr. Reddy’s Laboratories signed an agreement to sell its entire shareholding in its wholly owned subsidiary Svaas Wellness Limited to Enspirit Technology Services Private Limited for INR 2.23 crore. The sale, which was comp...
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.