Dr Reddys Laboratories Ltd (DRREDDY) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

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Comparison

Company

Score

Quality

Valuation

Financial

Technical

Lupin

Sun Pharma.Inds.

Divi's Lab.

Torrent Pharma

Dr Reddy's Labs

Aurobindo Pharma

Alkem Lab

Cipla

Zydus Lifesci.

Abbott India

Mankind Pharma

Why is Dr Reddys Laboratories Ltd ?

Low Debt Company with Strong Long Term Fundamental Strength

Healthy long term growth as Net Sales has grown by an annual rate of 13.54% and Operating profit at 29.93%
Company has a low Debt to Equity ratio (avg) at 0.01 times
The company has been able to generate a Return on Equity (avg) of 15.78% signifying high profitability per unit of shareholders funds

Negative results in Sep 25

INVENTORY TURNOVER RATIO(HY) Lowest at 0.47 times
DPR(Y) Lowest at 11.80%
DEBTORS TURNOVER RATIO(HY) Lowest at 0.35 times

With ROE of 16, it has a Attractive valuation with a 3 Price to Book Value

The stock is trading at a fair value compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of 2.81%, its profits have risen by 8.1% ; the PEG ratio of the company is 2.3

High Institutional Holdings at 63.5%

These investors have better capability and resources to analyse fundamentals of companies than most retail investors.

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Dr Reddy's Labs should be less than 10%
Overall Portfolio exposure to Pharmaceuticals & Biotechnology should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Pharmaceuticals & Biotechnology)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Dr Reddy's Labs for you?

Low Risk, Medium Return

Absolute

Risk Adjusted

Volatility

Dr Reddy's Labs

2.89%

0.13

21.14%

Sensex

4.85%

0.39

11.83%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

13.54%

EBIT Growth (5y)

29.93%

EBIT to Interest (avg)

28.95

Debt to EBITDA (avg)

0.54

Net Debt to Equity (avg)

Sales to Capital Employed (avg)

0.93

Tax Ratio

23.80%

Dividend Payout Ratio

11.80%

Pledged Shares

Institutional Holding

63.50%

ROCE (avg)

20.50%

ROE (avg)

15.78%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

2.97

EV to EBIT

16.29

EV to EBITDA

12.62

EV to Capital Employed

2.97

EV to Sales

3.11

PEG Ratio

2.29

Dividend Yield

0.63%

ROCE (Latest)

18.24%

ROE (Latest)

16.03%

Loading Valuation Snapshot...

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Mildly Bearish

RSI

No Signal

Bollinger Bands

Bullish

Moving Averages

Bullish (Daily)

KST

Bearish

Mildly Bearish

Dow Theory

Mildly Bullish

Mildly Bearish

OBV

Mildly Bullish

Mildly Bearish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

4What is working for the Company

NET SALES(Q)

Highest at Rs 8,828.30 cr

CASH AND CASH EQUIVALENTS(HY)

Highest at Rs 10,414.00 cr

-12What is not working for the Company

INVENTORY TURNOVER RATIO(HY)

Lowest at 0.47 times

DPR(Y)

Lowest at 11.80%

DEBTORS TURNOVER RATIO(HY)

Lowest at 0.35 times

OPERATING PROFIT TO NET SALES (Q)

Lowest at 22.77%

PBT LESS OI(Q)

Lowest at Rs 1,420.90 cr.

PAT(Q)

At Rs 1,347.10 cr has Fallen at -5.1% (vs previous 4Q average

Loading Valuation Snapshot...

Here's what is working for Dr Reddy's Labs

Net Sales - Quarterly

Highest at Rs 8,828.30 cr and Grown

each quarter in the last five quarters

MOJO Watch

Near term sales trend is very positive

Net Sales (Rs Cr)

Cash and Cash Equivalents - Half Yearly

Highest at Rs 10,414.00 cr

in the last six half yearly periods

MOJO Watch

Short Term liquidity is improving

Cash and Cash Equivalents

Here's what is not working for Dr Reddy's Labs

Profit Before Tax less Other Income (PBT) - Quarterly

At Rs 1,420.90 cr has Fallen at -11.6% (vs previous 4Q average)

over average PBT of the previous four quarters of Rs 1,607.95 Cr

MOJO Watch

Near term PBT trend is very negative

PBT less Other Income (Rs Cr)

Inventory Turnover Ratio- Half Yearly

Lowest at 0.47 times and Fallen

each half year in the last five half yearly periods

MOJO Watch

Company's pace of selling inventory has slowed

Inventory Turnover Ratio

Operating Profit Margin - Quarterly

Lowest at 22.77%

in the last five quarters

MOJO Watch

Company's efficiency has deteriorated

Operating Profit to Sales

Profit Before Tax less Other Income (PBT) - Quarterly

Lowest at Rs 1,420.90 cr.

in the last five quarters

MOJO Watch

Near term PBT trend is negative

PBT less Other Income (Rs Cr)

Profit After Tax (PAT) - Quarterly

At Rs 1,347.10 cr has Fallen at -5.1% (vs previous 4Q average)

over average PAT of the previous four quarters of Rs 1,420.20 Cr

MOJO Watch

Near term PAT trend is negative

PAT (Rs Cr)

Debtors Turnover Ratio- Half Yearly

Lowest at 0.35 times

in the last five half yearly periods

MOJO Watch

Company's pace of settling its Debtors has slowed

Debtors Turnover Ratio

Dividend Payout Ratio (DPR) - Annually

Lowest at 11.80%

in the last five years

MOJO Watch

Company is distributing lower proportion of profits generated as dividend

DPR (%)