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Dr. Reddy's Laboratories Ltd.
(DRREDDY)
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Rating:63Neutral
Price Target:
₹1,438.00
▲(22.09% Upside)
Action:Reiterated
Date:10/24/26
IN:DRREDDY scores as a balanced setup: strong balance-sheet positioning and a constructive earnings-call outlook are offset by weakened TTM operating momentum (sharp revenue decline) and softer cash-flow conversion. Technicals are mildly supportive but not decisively bullish, while valuation appears relatively expensive with a low dividend yield.
Positive Factors
Conservative balance sheet
Low leverage and reported net cash provide financial flexibility for research, product launches, partnerships and targeted investment. This reduces balance-sheet strain and gives Dr. Reddy’s greater capacity to fund growth while absorbing variability in operating performance.
Negative Factors
Sharp revenue and margin deterioration
The latest TTM deterioration indicates that recent earnings momentum is materially weaker than prior annual performance. Lower revenue and margins could constrain internal funding for innovation and make the company more dependent on successful launches and portfolio recovery.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative balance sheet
Low leverage and reported net cash provide financial flexibility for research, product launches, partnerships and targeted investment. This reduces balance-sheet strain and gives Dr. Reddy’s greater capacity to fund growth while absorbing variability in operating performance.
Read all positive factors
Dr. Reddy's Laboratories Ltd. (DRREDDY) vs. iShares MSCI India ETF (INDA)
Market Cap
₹1.13T
Dividend Yield0.59%
Average Volume (3M)110.90K
Price to Earnings (P/E)40.2
Beta (1Y)0.47
Revenue Growth-3.60%
EPS Growth-52.23%
CountryIN
Employees27,527
SectorGeneral
Sector StrengthN/A
IndustryDrug Manufacturers - Specialty & Generic
Share Statistics
EPS (TTM)33.60
Shares Outstanding834,641,240
10 Day Avg. Volume117,665
30 Day Avg. Volume110,898
Financial Highlights & Ratios
PEG Ratio-1.01
Price to Book (P/B)2.77
Price to Sales (P/S)3.11
P/FCF Ratio34.24
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
₹1,346.67Price Target Upside14.34% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)43.31
Revenue Forecast (FY)₹350.44B
Dr. Reddy's Laboratories Ltd. Business Overview & Revenue Model
Company Description
Established in 1984 and headquartered in Hyderabad, India, Dr. Reddy's Laboratories Limited functions as a fully integrated global pharmaceutical entity. Its business is structured into several core divisions. The Global Generics segment is respon...
Dr. Reddy's Laboratories Ltd. Earnings Call Summary
Earnings Call Date:Oct 23, 2026
(Q2-2027)
| % Change Since: |
Next Earnings Date:Jan 22, 2027
Earnings Call Sentiment Positive
The call was broadly positive. Management highlighted double-digit underlying growth, strong emerging-market and India performance, improved sequential margins, progress across semaglutide and biosimilars, a strong cash position and multiple strategic partnerships. These positives were partly offset by the 1.5% consolidated revenue decline, lower North America revenue due to Lenalidomide, declines in Europe and PSAI, higher SG&A and raw-material and logistics costs, ongoing semaglutide validation requirements, and regulatory and capacity-related risks. Highlights significantly outweighed the lowlights.Positive Updates
Underlying Base Business Delivered Double-Digit Growth
Excluding Lenalidomide in North America, the underlying base business maintained its growth momentum and delivered double-digit growth overall as well as across North America, emerging markets and India.
Negative Updates
Overall Revenue Declined Year Over Year
Consolidated revenue declined 1.5% year over year to ₹8.01 thousand crores, or US$905 million, primarily reflecting lower Lenalidomide sales in North America.
Read all updates
Q2-2027 Updates
Positive
Negative
Underlying Base Business Delivered Double-Digit Growth
Excluding Lenalidomide in North America, the underlying base business maintained its growth momentum and delivered double-digit growth overall as well as across North America, emerging markets and India.
Read all positive updates
Company Guidance
Guidance included gross margin in the range 50% to 55%, R&D in the range of 7% to 8%, full-year CapEx of around ₹1.6 thousand crore to ₹1.7 thousand crore versus earlier guidance of around ₹1.8 thousand crore, and SG&A at 32% with no significant changes expected in this year; semaglutide validation takes about 3 weeks, reload is expected by November 2026, Brazil is likely in Q4, smaller markets are targeted for the end of Q3 or the beginning of Q4, guidance remains 6 to 7 million devices this year and a run rate of 12 to 15 million pens, and approvals now cover 89 markets; NRT is expected to grow somewhere between a high single digit to maybe even double digit, Europe is expected to show growth but it will not be significant growth this year, and ex-NRT Europe should grow probably single-digit this year; India is expected to stay a high level of double digit and be higher than the market growth; EBITDA is expected to remain 20%-plus, reach 21 plus if semaglutide launches successfully, with a longer-term objective of 25%; abatacept has a December 22nd goal date, ramp up is expected after 6 months, fair market share is estimated at 15% to 25% for the IV version, and the subcu version is expected in February 2028; and the CDMO business is expected to reach 2x to 3x of these numbers in the next 3 to 4 years.Dr. Reddy's Laboratories Ltd. Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
78
Positive
Cash Flow
45
Neutral
| Breakdown | TTM | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 329.84B | 335.93B | 325.54B | 279.16B | 245.88B | 214.39B |
| Gross Profit | 163.24B | 177.26B | 190.43B | 163.61B | 139.34B | 113.84B |
| EBITDA | 59.53B | 79.16B | 90.09B | 80.43B | 65.92B | 47.74B |
| Net Income | 27.98B | 42.85B | 56.54B | 55.68B | 45.07B | 23.57B |
Balance Sheet | ||||||
| Total Assets | 574.48B | 579.35B | 492.99B | 387.52B | 322.85B | 296.65B |
| Cash, Cash Equivalents and Short-Term Investments | 76.24B | 87.81B | 57.91B | 81.47B | 61.80B | 44.37B |
| Total Debt | 72.29B | 89.54B | 46.77B | 20.02B | 13.47B | 33.84B |
| Total Liabilities | 185.11B | 198.89B | 155.82B | 106.97B | 89.99B | 106.13B |
| Stockholders Equity | 386.18B | 377.06B | 333.39B | 280.55B | 230.99B | 190.53B |
Cash Flow | ||||||
| Free Cash Flow | 11.54B | 30.51B | 18.92B | 18.00B | 40.01B | 9.06B |
| Operating Cash Flow | 28.89B | 53.84B | 46.43B | 45.43B | 58.87B | 28.11B |
| Investing Cash Flow | -30.05B | -67.03B | -51.02B | -40.28B | -41.37B | -26.39B |
| Financing Cash Flow | 3.54B | 12.73B | 11.86B | -3.76B | -26.86B | -2.42B |
Dr. Reddy's Laboratories Ltd. Technical Analysis
Positive
1177.80
Price Trends
1202.21
Positive
1221.13
Positive
1239.93
Positive
Market Momentum
31.20
Negative
73.44
Negative
90.54
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:DRREDDY, the sentiment is Positive. The current price of 1177.8 is below the 20-day moving average (MA) of 1239.63, below the 50-day MA of 1202.21, and below the 200-day MA of 1239.93, indicating a bullish trend. The MACD of 31.20 indicates Negative momentum. The RSI at 73.44 is Negative, neither overbought nor oversold. The STOCH value of 90.54 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IN:DRREDDY.
Dr. Reddy's Laboratories Ltd. Risk Analysis
Dr. Reddy's Laboratories Ltd. disclosed 60 risk factors in its most recent earnings report. Dr. Reddy's Laboratories Ltd. 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 Ltd. Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | ₹965.37B | 26.27 | ― | 0.24% | 9.09% | 9.61% | |
69 Neutral | ₹918.70B | 16.62 | ― | 0.90% | 28.19% | 49.25% | |
69 Neutral | ₹4.27T | 35.26 | ― | 0.90% | 11.41% | 16.62% | |
67 Neutral | ₹1.76T | 75.58 | ― | 0.32% | 42.06% | -3.48% | |
63 Neutral | ₹1.13T | 40.24 | ― | 0.59% | -3.60% | -52.23% | |
57 Neutral | ₹1.24T | 27.76 | ― | 0.08% | 21.11% | -1.28% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% |
* General Sector Average
IN:DRREDDY
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Dr. Reddy's Laboratories Ltd. Corporate Events
Dr. Reddy’s Wins DCGI Nod for Zytorvi in Advanced Esophageal Cancer, Expanding Its Oncology Reach
Oct 21, 2026
Dr. Reddy’s has received approval from India’s Central Drugs Standard Control Organisation for Zytorvi (toripalimab) in combination with cisplatin and paclitaxel as a first-line treatment for adult patients with unresectable advanced, ...
Dr. Reddy’s Issues Public Notice on Lost Share Certificates
Sep 16, 2026
Dr. Reddy’s Laboratories has notified the stock exchanges that it has published newspaper notices regarding the loss of share certificates reported by certain shareholders. The company cautions the public against dealing in the affected cert...
USFDA Issues Observations After Reviewing Dr. Reddy’s Mexico API Facility
Sep 11, 2026
Dr. Reddy’s Laboratories has reported that the U.S. Food and Drug Administration has completed a records assessment of its API manufacturing facility in Jiutepec, Morelos, Mexico, operated through Industrias Químicas Falcón de M...
Dr. Reddy’s Mirfield API Plant Cleared as FDA Closes Inspection With VAI Rating
Aug 14, 2026
Dr. Reddy’s Laboratories has announced that the United States Food Drug Administration has completed its Good Manufacturing Practice inspection of the company’s API manufacturing facility in Mirfield, West Yorkshire, U.K. The inspecti...
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.