Dr. Reddy's Laboratories Limited (RDY) AI Stock Analysis

Dr. Reddy's Laboratories Limited operates as a fully integrated global pharmaceutical company with segments including Global Generics, Pharmaceutical Services and Active Ingredients (PSAI), Proprietary Products, and Others. Its Global Generics segment manufactures and markets prescription and over-the-counter pharmaceuticals, alongside a biologics business. The PSAI unit produces active pharmaceutical ingredients and intermediates, while offering contract research and custom manufacturing. The Proprietary Products segment conducts research and development for differentiated formulations. Its portfolio covers therapeutic categories such as gastro-intestinal, cardiovascular, anti-diabetic, oncology, dermatology, respiratory, and nephrology, supported by collaborations including a partnership with Curis, Inc.

Revenue expanded from $214.39B in FY2022 to $353.47B in FY2026, delivering a 5-year revenue CAGR of 168.0%. Gross margin shifted from 53.1% in FY2022 to 58.5% in FY2025 before settling at 52.8% in FY2026. Operating margin stood at 13.8% in FY2026, down from 22.1% in FY2025. Annual net income peaked at $56.54B in FY2025 before declining to $45.09B in FY2026 with a net margin of 12.8%. In the latest quarter ended June 30, 2026, quarterly revenue growth declined 5.6% year-over-year, and quarterly earnings contracted 68.7% year-over-year, while TTM revenue reached $331.19B with EPS of $0.44.

As of June 30, 2026, the company held $81.43B in cash and short-term investments against total debt of $71.95B, resulting in net cash of $9.47B. Liquidity remained solid with a current ratio of 1.90 and a debt-to-equity ratio of 0.19 against shareholders' equity of $383.43B. In FY2026, operating cash flow reached $56.65B and free cash flow stood at $32.10B. Cash deployment in FY2026 included $24.54B in capital expenditures and $7.01B in dividends paid, while 5-year share count change was 0.1%.

Dr. Reddy's trades at a market capitalization of $10.89B and an enterprise value of $10.43B. Its trailing P/E of 29.7x and forward P/E of 27.0x stand above the median of its US-listed Healthcare peers, which post a trailing P/E of 24.6x and forward P/E of 17.3x. The company's EV to EBITDA is 15.0x compared to the peer median of 12.0x, while EV to revenue is 3.0x. Over the past year, the stock declined 7.2%, trailing the S&P 500 (SPY) return of 16.8%. Over five years, the stock returned 12.6% compared to 83.0% for the S&P 500.

The company pays an annual dividend forward of $0.08, providing a dividend yield of 0.64% with a payout ratio of 32.9%. Dr. Reddy's has paid dividends for 26 consecutive years on an annual schedule. However, its 5-year annualized dividend growth stands at -22.6%. The last ex-dividend date occurred on July 24, 2026.

Wall Street sentiment reflects 2 Strong Buy, 1 Buy, 1 Hold, 0 Sell, and 1 Strong Sell ratings. The mean price target is $13.83, implying an upside of 5.8% from the last close of $13.07. For the fiscal year ending March 31, 2027, consensus estimates project revenue of $351.92B and an EPS decline of 20.8% to $43.85. The company beat EPS estimates in 1 of the last 4 quarters, with next earnings scheduled for October 23, 2026.

This page is an AI-written research summary of Dr. Reddy's Laboratories Limited (RDY). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

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