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Dr Reddy's Laboratories Ltd ADR RDY

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Stock XNYS Rating as of
$67.86 +0.16 (0.24%)
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Company Report

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Dr. Reddy’s Earnings: Strong Demand From Developed Markets Fuels Solid Second-Quarter Results

Keonhee Kim

No-moat Dr. Reddy's reported second-quarter results that were largely in line with our expectations. Total sales were up 9.1% thanks to strong volume mainly in the United States and Europe. The firm also benefited from less-severe price erosion, which typically fluctuates between high single digits to low double digits, compared with previous years in developed markets like the U.S. We maintain our fair value estimate of $54 per share.

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Price vs Fair Value

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RDY is trading at a 26% premium.
Price
$67.86
Fair Value
$38.00
Uncertainty
High
1-Star Price
$12.40
5-Star Price
$53.90
Economic Moat
Dpw
Capital Allocation
Hsvdlww

Bulls Say, Bears Say

Bulls

Generic versions of sizable drugs like Revlimid and Vascepa will help fuel Reddy’s top line.

Bears

Continued efforts from the Indian government to educate the public and roll out more non-branded generic drugs could act as a headwind for Dr. Reddy’s.

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News

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Trading Information

Previous Close Price
$67.70
Day Range
$67.75–68.22
52-Week Range
$51.11–73.17
Bid/Ask
$28.00 / $105.00
Market Cap
$11.30 Bil
Volume/Avg
211,063 / 248,371

Key Statistics

Price/Earnings (Normalized)
17.71
Price/Sales
3.48
Dividend Yield
0.72%
Dividend Yield (Forward)
0.72%
Total Yield
0.72%

Company Profile

Dr. Reddy’s is one of the largest generic drug manufacturers in the world. It has a significant presence in North America, a region that makes up roughly half of its generics sales, and it services India (22% of its generics sales), Russia (12%), and certain European and Latin American countries. Beyond simple generics, Dr. Reddy’s also has a solid portfolio of injectables which make up 25% of its North America sales. In branded generic markets like India, Dr. Reddy’s has established a compelling presence with its strong brand name and earned a top five spot in key therapeutic areas including oncology and gastroenterology. Dr. Reddy’s also has an active pharmaceutical ingredient business that manufactures over 150 APIs and sells in over 75 countries.
Sector
Healthcare
Industry
Drug Manufacturers - Specialty & Generic
Stock Style Box
Large Core
Total Number of Employees
22,822
Website
https://www.drreddys.com

Competitors

Valuation

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Metric
RDY
NVS
TEVA
Price/Earnings (Normalized)
 17.7114.294.32
Price/Book Value
 3.745.221.59
Price/Sales
 3.484.270.72
Price/Cash Flow
 13.8513.508.39
Price/Earnings
RDY
NVS
TEVA

Financial Strength

Metric
RDY
NVS
TEVA
Quick Ratio
 1.870.410.49
Current Ratio
 2.590.941.00
Interest Coverage
 44.7211.35−1.16
Quick Ratio
RDY
NVS
TEVA

Profitability

Metric
RDY
NVS
TEVA
Return on Assets (Normalized)
 16.33%11.87%4.58%
Return on Equity (Normalized)
 22.82%25.88%25.82%
Return on Invested Capital (Normalized)
 21.20%17.42%9.39%
Return on Assets
RDY
NVS
TEVA

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