Is Dr Reddy's Labs overvalued or undervalued?

Oct 14 2025 08:05 AM IST
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As of October 13, 2025, Dr Reddy's Labs is considered very attractive and undervalued, with a PE ratio of 18.54, an EV to EBITDA of 12.23, and a ROCE of 20.88%, significantly lower than its peers like Sun Pharma and Divi's Lab, indicating a compelling investment opportunity despite recent stock performance.
As of 13 October 2025, the valuation grade for Dr Reddy's Labs has moved from attractive to very attractive. The company is currently assessed as undervalued. Key ratios include a PE ratio of 18.54, an EV to EBITDA of 12.23, and a ROCE of 20.88%.

In comparison to its peers, Dr Reddy's Labs stands out with a significantly lower PE ratio than Sun Pharma, which has a PE of 34.9, and Divi's Lab, which has a PE of 75.45. Additionally, while Dr Reddy's has a PEG ratio of 9.19, Cipla, which is rated as attractive, has a PEG of 1.1. Despite recent stock performance lagging behind the Sensex over the year, the strong valuation metrics suggest that Dr Reddy's Labs presents a compelling investment opportunity.
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