Dr. Reddy's Laboratories Stock Analysis, Valuation (NYSE:RDY)

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$32.37 $0.8 (2.41%) RDY stock closing price Mar 22, 2018 (Closing)
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Dr. Reddy's Laboratories
Updated on : Mar 22, 2018
previous close
RDY 33.2 (0%)
S&P 500 2711.9 (0%)
Closing Price On: Mar 21, 2018
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Medical-Generic Drugs
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Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
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Sector:   Medical.   *PE adjusted for one time items.
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RDY Stock Analysis

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View the Dr. Reddy's Laboratories stock analysis video on Amigobulls. This video puts forward our latest analysis highlighting the pros and cons for RDY stock.

Note: Amigobulls stock rating is our opinion based on the historical performance of the company's fundamentals. It is not indicative of the future performance of the stock.

Dr.Reddy's Laboratories Ltd (ADR) Stock Rating 3.3/5

We at Amigobulls use various financial measures including profit margins, revenue growth and dividends for RDY stock analysis. Dr. Reddy's Laboratories valuation analysis is based on relative valuation multiples like PE ratio and price to sales ratio. Based on a company's historical fundamentals we arrive at Dr. Reddy's Laboratories stock rating which is indicative of the company's financial performance.

Should you buy RDY stock?

  • Dr. Reddy's Laboratories's average operating margin of 9% was exceptional.
  • Net margins stood at a healthy 7% (average) for Dr. Reddy's Laboratories in the Trailing Twelve Months.
  • The company has an operating cash flow which is 2.3 times the net income.
  • The lower PS ratio 2.5 for RDY stock versus Medical-Generic Drugs industry average of 4.2 is a positive for the company.
  • Dr. Reddy's Laboratories generates a high return on invested capital of 5.8%.
  • The LTM ROE of 8.1% for Dr. Reddy's Laboratories is attractive.
  • The company has a good Free Cash Flow (FCF) margin of 13.9%.

Should you sell RDY stock?

  • Dr. Reddy's Laboratories is debt laden and has a high debt/equity ratio of  0.44.
  • Trading at a PE ratio of 33.4, RDY stock is overvalued in comparison to industry average multiple of 24.

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Comments on this video and Dr. Reddy's Laboratories stock

Amigobulls Dr. Reddy's Laboratories stock analysis helps in evaluating the financial statements of a company to arrive at a conclusion about the fair value of RDY stock. Company's fundamentals remain one of the key driver of RDY stock and helps investors in making good buy and sell decision.

Dr. Reddy's Laboratories revenue growth and profit or net income are the main underlying forces which could detremine the direction of the share price. One can also combine technical analysis and fundamental analysis to get a holistic picture about RDY stock.