| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 30 | 36.4x | 17.3x | Bottom tier | |
Growth | 19 | 1.6% | 7.1% | Bottom tier | |
Quality | 58 | 4.7% | 4.5% | Around median | |
Safety | 79 | 1.0x | 2.6x | Top tier | |
Capital Return | 18 | 0.64% | 0.06% | Bottom tier | |
Momentum | 57 | -12.0% | -1.6% | Around median | |
Sentiment | 86 | 2 | 3 | Top tier |
The floor: what the company is worth if growth stopped today
82% of today's price is what a buyer pays for growth that has not happened yet.
10-year US Treasury yield 4.96% as of 2026-10-22. Estimates computed from company data and analyst targets, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Dr. Reddy's Laboratories Limited manufactures and markets generic and complex generic drugs, branded pharmaceuticals, active pharmaceutical ingredients through its PSAI business, and consumer health products such as nicotine replacement therapies. The company is targeting additional growth drivers in peptides, biosimilars, and innovation; in Q1 FY2027, North America generics represented 27% of revenue, while branded businesses, including India, emerging markets, and nicotine replacement therapies, accounted for 42%, and PSAI contributed 11%.
In Q1 FY2027, consolidated revenue was INR 8,071 crore, or $853 million, down 5.6% year over year and up 7.4% sequentially. Gross margin was 46.5%, down 1,039 basis points year over year, and EBITDA was INR 1,009 crore, or $107 million, at a margin of 12.5%, while net profit attributable to shareholders of the parent company was INR 443 crore, or $47 million, and diluted earnings per share were INR 5.32. The decline in lenalidomide, the INR 240 crore semaglutide provision, and higher solvent and freight costs related to the Middle East conflict weighed on results.
EDGAR filings show annual growth before the weakness recorded in Q1 FY2027; FY2025 revenue increased to $325.5 billion from $279.2 billion in FY2024, and net income rose to $57.2 billion from $55.7 billion. Gross profit reached $190.4 billion in FY2025, compared with $163.6 billion in FY2024, equivalent to a gross margin of approximately 58.5% in both years based on the figures provided.
The provided analyst consensus is “Buy,” but the data does not include a consensus price target that can be compared with the 52-week range of $11.36 to $15.67. The displayed price-to-earnings ratio also does not provide a usable figure, so the valuation assessment rests on balancing core business growth and the potential of semaglutide and abatacept against margin pressure, the INR 240 crore provision, and the legal investigation related to the disclosure.
Figures in the text are as of 2026-08-29; the live price is shown at the top of the page.
Revenue declined 5.6% year over year to INR 8,071 crore, or $853 million, due to lower lenalidomide sales despite double-digit growth in the core business. The company also recorded a provision of INR 240 crore related to out-of-specification semaglutide batches and other associated costs. Gross margin fell to 46.5% and EBITDA margin to 12.5%, with an additional impact from higher solvent and freight costs related to the Middle East conflict.
The company identified the root cause of the issue and began remediation work at the production sites, targeting completion of active ingredient testing in the third week of September 2026. It plans to resume commercial supplies in November 2026 after selling 180 thousand pens before the interruption. It expects to supply 6 to 7 million pens between November 2026 and March 2027, compared with a lost opportunity that management estimated at approximately 3 to 4 million pens.
Emerging markets revenue grew 31% year over year to INR 1,833 crore in Q1 FY2027 following the launch of 43 products. India revenue increased 17% to INR 1,780 crore, with organic growth of 15.5% and seven new brand launches. In North America, the company launched six products, including bosutinib and nintedanib, and is targeting 27 launches during FY2027.
Automated analysis for informational purposes only — not investment advice.
Abatacept represents a key product in the company's biosimilars expansion, and management set mid-December 2026 as the target review date, with plans to launch upon approval. The product was manufactured at the Bachupally facility, which was inspected by the U.S. Food and Drug Administration in June 2026 and received seven observations to which the company responded within the deadline. Biologics represent approximately 2% of sales, and management expects the biologics business to become profitable upon the launch of abatacept, while the risk of delay remains if additional regulatory inquiries are received.
The net cash surplus was INR 3,057 crore, or $323 million, as of June 30, 2026. Operating working capital was INR 14,353 crore, while cash capital expenditure was INR 307 crore in Q1 FY2027. The company expects capital expenditure of approximately INR 1,800 crore during FY2027, with investments directed toward peptides, biosimilars, and regular production capacity.
The first risk is the success of the semaglutide remediation and the resumption of supplies in November 2026, as management estimated the probability of success at approximately 80% to 90%. The second risk is weak margins, after EBITDA margin reached 12.5% in Q1 FY2027, in addition to the approximately one-percentage-point impact of the Middle East conflict. Risks also include the decline in lenalidomide, U.S. generic price erosion, the seven Form 483 observations at the Bachupally facility, and the legal investigation announced on July 31, 2026.