Dr. Reddy's Laboratories Ltd Common Stock (RDY)

FairStock Score: 54/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

As a value investor, I start with the business: Dr. Reddy's is an integrated pharmaceutical company with 27,527 employees, selling generics and active ingredients across North America, Europe, India, Russia, and other markets. Generics can be a hard, competitive trade, so I want evidence of durable returns and pricing power. The balance sheet looks conservative—D/E 0.19—and the low beta of 0.24 suggests defensiveness. Yet returns are only modest: FairStock shows ROE 8.84% and ROCE 4.01%. In fiscal Q2 2026, the company reported revenue of $80.7B and net income of $4.4B, a 5.50% margin. The supplied growth figures for the period covered by the data are negative, with revenue growth of -5.56% and profit growth of -68.72%, so the trajectory is weak. Valuation is contradictory. At the 2026-10-13 close of $12.77, FairStock calculates P/E 31.15 and P/B 15.77—not cheap on earnings or book. But it also calculates Graham Number $65.16, an 80.40% margin of safety, FCF yield 81.0%, and EV/EBITDA 1.08, which look extraordinarily cheap. The Piotroski F-Score is 5/9 and Altman Z-Score 1.36, suggesting average momentum and some distress risk. FairStock's Lynch category is 'none' because only 0 years of filed results are available against the need for 3. I see no obvious moat in generic drugs, and conflicting signals demand caution. The business is not clearly broken, but growth and returns need to improve before the price looks safely attractive.

In plain English: Dr. Reddy's makes generic and specialty medicines and sells them in several regions, including North America, Europe, India and Russia. In fiscal Q2 2026 it reported sales of $80.7B and profit of $4.4B, but growth and returns look weak. The share price looks cheap by some value measures and expensive by others, so it is not a clear bargain.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer