Dr. Reddy's Laboratories Limited

DRREDDY.BO•drug-manufacturers-specialty-generic

Current Price

1,293.45INR

per share

Fair Value

923.99INR

Overvalued

40.0%

Valuation Overview

Growth Story

Over the next few years, revenue is expected to grow by 5.79%, lower than industry average of 12.71%.

Growth Trajectory

Profitability

In the growth phase company makes 22.40% profit on every dollar of sales, higher than industry average of 20.42%.

Profitability Trajectory

Risk Profile

Investors expect at least 8.61% return to justify the risk of holding stock.

Risk vs Return

Required Return (Cost of Capital) (%)

Return on Invested Capital (%)

Financial Health Overview

Enterprise Value

751.05B INR

Equity Value

769.10B INR

FCF Yield

51.91%

Average ROIC

16.97%

Cost of Capital

8.70%

P/E Ratio

17.41x

Financial Metric	Most Recent 12 months (INR)	Previous Year (INR)
Revenues	334.26B INR	279.16B INR
Operating Income or EBIT	80.29B INR	76B INR
Interest Expense	3.06B INR	1.71B INR
Book Value Of Equity	350.06B INR	280.55B INR
Book Value Of Debt	48.64B INR	20.02B INR
Cash and Marketable Securities	66.69B INR	81.47B INR
Number of Shares Outstanding	832.37M	--
Minority interests	0 INR	0 INR
Current Stock Price	1293.45 INR	--
Effective Tax Rate	23.00%	--
Marginal Tax Rate	30.00%	--

Performance vs Industry

Revenue Growth

+7.02%

19.73%Company

12.71%Industry

Above Industry

Operating Margin

+3.60%

24.02%Company

20.41%Industry

Above Industry

Dr. Reddy's Laboratories Limited demonstrates superior performance in both growth and profitability compared to industry peers, indicating strong competitive advantages and operational excellence.

Terminal Value Analysis

Growth Rate

4.65%

Cost of Capital

8.88%

Return on Capital

8.88%

Reinvestment Rate

52.36%

Terminal value represents 55% of total enterprise value, based on 4.65% perpetual growth and 8.88% discount rate.

Equity Value Breakdown

Component	Value	Type
Present Value (Terminal Value)	415.83B INR	Add
Present Value (Cash Flow Over Next 10 Years)	335.22B INR	Add
Value of Operating Assets	751.05B INR	Sub-total
Debt	48.64B INR	Subtract
Minority Interests	—	Subtract
Cash	66.68B INR	Add
Value of Equity	769.10B INR	Sub-total
Number of Shares	832.37M shares	Divisor
Estimated Value per Share (Fair Value)	923.99 INR	Total
Current Market Price	1.29K INR	Reference

Financial Projections

Total FCF Present Value

335.22B INR

Avg Revenue Growth

4.55%

Avg Operating Margin

22.03%

Avg ROIC

16.97%

Year	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal Year
REVENUE
Revenue	338.67B INR	358.29B INR	379.05B INR	401.01B INR	424.25B INR	447.86B INR	471.76B INR	495.85B INR	520.04B INR	544.23B INR	569.53B INR
Growth Rate	1.32%	5.79%	5.79%	5.79%	5.79%	5.56%	5.33%	5.10%	4.87%	4.65%	4.65%
PROFITABILITY
Operating Income	81.35B INR	82.18B INR	84.89B INR	87.64B INR	90.42B INR	95.45B INR	100.54B INR	105.68B INR	110.84B INR	115.99B INR	121.38B INR
Operating Margin	24.02%	22.93%	22.39%	21.85%	21.31%	21.31%	21.31%	21.31%	21.31%	21.31%	21.31%
EBIT (1-tax)	62.64B INR	63.28B INR	65.36B INR	67.48B INR	69.62B INR	72.16B INR	74.60B INR	76.93B INR	79.14B INR	81.19B INR	84.97B INR
CASH FLOW
Reinvestment	13.31B INR	14.08B INR	14.89B INR	15.76B INR	16.01B INR	23.54B INR	23.74B INR	23.83B INR	23.82B INR	24.93B INR	44.49B INR
Free Cash Flow	49.33B INR	49.20B INR	50.47B INR	51.72B INR	53.61B INR	48.61B INR	50.86B INR	53.10B INR	55.31B INR	56.26B INR	40.47B INR
Terminal Value	--	--	--	--	--	--	--	--	--	--	956.89B INR
Present Value	45.42B INR	41.71B INR	39.39B INR	37.17B INR	35.47B INR	29.60B INR	28.48B INR	27.34B INR	26.17B INR	24.44B INR	—
EFFICIENCY
ROIC	18.86%	18.32%	18.18%	18.02%	17.84%	17.77%	17.36%	16.97%	16.58%	16.20%	8.88%
Cost of Capital	8.61%	8.61%	8.61%	8.61%	8.61%	8.66%	8.71%	8.77%	8.82%	8.88%	8.88%
Sales/Capital	1.47x	1.47x	1.47x	1.47x	1.47x	1.01x	1.01x	1.01x	1.01x	1.01x	—

Profitability & Efficiency

Operating Margin (%)

ROIC (%)

Value Creation Analysis

ROIC (%)

Cost of Capital (%)

Operational Cash Flow Analysis

Free Cash Flow (₹B)

Reinvestment (₹B)