Upside case
Bull case
$2007+14813.2%
RDY would need investors to value it at roughly 33x earnings — about 33x more generous than today's 0x forward P/E. That requires meaningful multiple expansion on top of continued earnings growth.
Analysis OverviewBuyUpdated May 1, 2026
Dr. Reddy's Laboratories Limited (RDY) Stock Analysis
Wall Street verdict, consensus price target, and analyst rating breakdown — everything needed to frame the risk/reward at today's price.
Analyst consensus
Buy
Covering
12
analysts
6 bullish · 2 bearish · 12 covering RDY
Strong Buy
0
Buy
6
Hold
4
Sell
2
Strong Sell
0
Consensus Target
—
— vs today
Scenario Range
$479 – $2007
Model bear to bull value window
Coverage
12
Published analyst ratings
Valuation Context
0.2x
Forward P/E · Market cap $11.2B
RDY price targets
Three scenarios for where RDY stock could go
Current
~$13
Confidence
40 / 100
Updated
May 1, 2026
Where we are now
Current · $13
Bear
$479
Base
$1732
Bull
$2007
Market caseClosest to today
Base case
$1732+12766.2%
At 29x on FY1 earnings, the base case reflects a reasonable but not stretched valuation. It prices in continued growth without assuming an exceptional setup.
Stress case
Bear case
$479+3457.1%
The bear case assumes sentiment or fundamentals disappoint enough to push RDY down roughly 3457% from the current price.
Not financial advice. Model confidence reflects internal scenario assumptions, not a guarantee of returns. Past performance does not predict future results.
Dr. Reddy's Laboratories Limited
RDY · NYSEHealthcareDrug Manufacturers - Specialty & GenericMarch year-end
Dr. Reddy's Laboratories is an integrated pharmaceutical company that develops, manufactures, and markets generic and branded drugs worldwide. It generates revenue primarily from generic drugs (Global Generics segment — roughly 80% of sales), active pharmaceutical ingredients manufacturing (PSAI segment), and proprietary product development. The company's competitive advantage lies in its vertically integrated manufacturing capabilities — from APIs to finished formulations — and its established presence in complex generics and emerging markets.
Market Cap
$11.2B
Revenue TTM
$345.8B
Net Income TTM
$56.6B
Net Margin
16.4%
RDY Revenue and Earnings Performance
Quarterly beat-or-miss track record against analyst estimates, plus forward revenue and EPS outlook for the next two fiscal years.
EPS Beat Rate
45%Exceptional
12 quarters tracked
Revenue Beat Rate
70%Exceptional
vs consensus estimates
Avg EPS Surprise
-4.9%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q3 2025
Q4 2025
Q1 2026
Q1 2026
Last 4 Quarters
EPS beats: 2 of 4Q3 2025
EPS
$0.20/$0.21
Revenue
$997M/$1.0B
Q4 2025
EPS
$0.19/$0.19
Revenue
$992M/$945M
Q1 2026
EPS
$0.16/$0.16
Revenue
$952M/$928M
Q1 2026
EPS
$0.16/$0.16
Revenue
$952M/$928M
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| Q3 2025 | $0.20/$0.21 | -6.7% | $997M/$1.0B | -2.2% |
| Q4 2025 | $0.19/$0.19 | -1.4% | $992M/$945M | +5.0% |
| Q1 2026 | $0.16/$0.16 | +0.0% | $952M/$928M | +2.6% |
| Q1 2026 | $0.16/$0.16 | +0.0% | $952M/$928M | +2.6% |
FY1–FY2 Estimates
Revenue Outlook
FY1
$391.1B
+13.1% YoY
FY2
$445.7B
+13.9% YoY
EPS Outlook
FY1
$78.60
+15.7% YoY
FY2
$91.72
+16.7% YoY
Trailing FCF (TTM)$24.3B
FCF Margin: 7.0%
Next Earnings
May 8, 2026
Expected EPS
$0.09
Expected Revenue
$892M
RDY beat EPS estimates in 2 of 4 tracked quarters. Mixed delivery makes the upcoming report a key data point for re-rating.
RDY Revenue Breakdown by Segment
Product and geographic revenue mix from the latest annual disclosure, with year-over-year growth by segment.
Latest disclosure
FY 2025
Total disclosed revenue $325.5B
Product Mix
Latest annual revenue by segment or product family
Segment breakdown not available for this company.
Geographic Mix
Latest annual revenue by reported region
UNITED STATES
45.9%
+10.2% YoY
Tap, hover, or focus a slice to inspect segment detail.
UNITED STATES is the largest reported region at 45.9%, up 10.2% YoY.
RDY Valuation Snapshot
Current multiples compared to the S&P 500, the company's sector, and its own five-year average.
Relative Value Signal
Significantly Undervalued
Fair value est. $813 — implies +5826.3% from today's price.
Upside to Fair Value
5826.3%
potential upside
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
RDY
18.9x
vs
S&P 500
25.2x
25% discount
vs Healthcare Trailing P/E
RDY
18.9x
vs
Healthcare
22.1x
15% discount
vs RDY 5Y Avg P/E
Today
18.9x
vs
5Y Average
0.3x
+5763% premium
Forward PE
0.2x
S&P 500
19.1x
-99%
Healthcare
19.0x
-99%
5Y Avg
—
—
Trailing PE
18.9x
S&P 500
25.2x
-25%
Healthcare
22.1x
-15%
5Y Avg
0.3x
+5763%
PEG Ratio
—
S&P 500
1.75x
—
Healthcare
1.52x
—
5Y Avg
—
—
EV/EBITDA
12.3x
S&P 500
15.3x
-19%
Healthcare
14.1x
-13%
5Y Avg
3.8x
+225%
Price/FCF
88.6x
S&P 500
21.3x
+315%
Healthcare
18.7x
+375%
5Y Avg
0.7x
+13335%
Price/Sales
3.3x
S&P 500
3.1x
+4%
Healthcare
2.8x
+15%
5Y Avg
0.8x
+294%
Dividend Yield
0.62%
S&P 500
1.88%
-67%
Healthcare
1.40%
-55%
5Y Avg
—
—
| Metric | RDY | S&P 500 | Healthcare | 5Y Avg RDY |
|---|---|---|---|---|
| Forward PE | 0.2x | 19.1x-99% | 19.0x-99% | — |
| Trailing PE | 18.9x | 25.2x-25% | 22.1x-15% | 0.3x+5763% |
| PEG Ratio | — | 1.75x | 1.52x | — |
| EV/EBITDA | 12.3x | 15.3x-19% | 14.1x-13% | 3.8x+225% |
| Price/FCF | 88.6x | 21.3x+315% | 18.7x+375% | 0.7x+13335% |
| Price/Sales | 3.3x | 3.1x | 2.8x+15% | 0.8x+294% |
| Dividend Yield | 0.62% | 1.88% | 1.40% | — |
RDY trades above S&P 500 benchmarks on 1 of 5 measured multiples — appears modestly priced relative to the S&P 500 on most measures.
Forward P/E and PEG reflect analyst consensus estimates. Historical averages use trailing ratios where forward data is unavailable.S&P 500 and sector benchmarks both use trailing median P/E — similar readings indicate the broader index and sector are priced alike.
Open valuation toolRDY Financial Health
Verdict
Strong
RDY 16.3% ROIC signals a durable competitive advantage.
Cash Engine
Revenue, margins, and cash generation
Revenue (TTM)
Trailing-twelve-month sales base
$345.8B
Revenue Growth
TTM vs prior year
+11.1%
Gross Margin
Gross profit as a share of revenue
55.2%
Operating Margin
Operating income divided by revenue
19.3%
Net Margin
Net income divided by revenue
16.4%
EPS (TTM)
Diluted earnings per share, trailing twelve months
$67.91
Free Cash Flow (TTM)
Cash generation after capex
$24.3B
FCF Margin
FCF as share of revenue — the primary cash quality signal
7.0%
Capital Quality
ROIC, leverage, and debt serviceability
ROIC
Return on invested capital — primary competitive quality signal
16.3%
ROA
Return on assets, trailing twelve months
10.1%
Cash & Equivalents
Liquid assets on the balance sheet
$14.7B
Net Debt
Total debt minus cash
$32.1B
Debt Serviceability
Net debt as a multiple of annual free cash flow
1.3× FCF
~1.3 years to full repayment at current FCF run-rate
ROE
Return on equity, trailing twelve months
15.1%
Shareholder Returns
How capital is returned to owners
Total shareholder yield
0.8%
Dividend
0.6%
Buyback
0.1%
Share Repurchases
Trailing buyback outflow — dollar magnitude of capital returned
$1.4B
Dividend / Share
Annualized trailing dividend per share
$7.99
Payout Ratio
Share of earnings distributed as dividends
11.8%
Shares Outstanding
Declining as buybacks retire shares
834M
All figures from the trailing twelve months. ROIC uses invested capital (equity + net debt).
Open full ratios pageRDY Stock Risk Factors
Key factors that could pressure the stock price, compress the multiple, or weigh on future results.
AI analysis · updated April 29, 2026
High Risk
Regulatory Actions
Dr. Reddy's Laboratories is subject to potential regulatory actions from bodies like the US FDA. Inspections of manufacturing facilities can lead to warning letters, product launch delays, or import restrictions if irregularities are found.
High Risk
Revenue Decline from Patent Expirations
A significant concern for Dr. Reddy's is the potential drop in revenue due to the patent expiration of key products like Revlimid. While new product launches are expected to offset these losses, execution risks and upfront costs associated with these new products can create near-term earnings concerns.
Medium
Economic Slowdown
A slowdown in economic growth in India could adversely affect Dr. Reddy's business and operations. This risk is particularly pertinent given the company's reliance on the Indian market for a substantial portion of its revenue.
Medium
Compliance and Litigation
Periodic amendments to regulations can increase compliance and litigation risks for Dr. Reddy's. This could lead to increased costs and potential legal challenges that may impact financial performance.
Lower
Indian Regulations
Indian law imposes restrictions on the transfer of equity shares obtained upon conversion of ADSs and repatriation of proceeds. These regulations can affect ADS trading prices and investor sentiment.
Lower
Share Price and Shareholder Rights
Risks related to the company's share price and shareholder rights are also a factor. Investor concerns about revenue declines may lead to a discount in the stock's valuation despite potential growth.
Lower
Tech & Innovation
Dr. Reddy's faces risks associated with technology and innovation, which could impact its competitive position in the pharmaceutical industry.
Lower
Production Risks
The company is exposed to risks concerning its production processes, which could affect its ability to meet market demand and maintain quality standards.
These are risk mechanisms, not predictions. The key question is which would force a cut to earnings estimates or a lower multiple than the market currently prices in.
Why RDY Stock Could Outperform
Structural drivers behind the upside case and why the stock could outperform over the next 12 months.
AI analysis · updated April 29, 2026
Biosimilars and GLP-1 Growth
Dr. Reddy's is poised to benefit from the growing biosimilar market, with its biosimilar Abatacept expected to be a significant growth driver in the US. The company is also a first mover in the generic GLP-1 wave, with approvals for disposable pens and tablet forms in India, and plans to launch generics in 86 countries.
Diversified Revenue Streams
The company has a strong presence in North America, India, Russia, and Europe, with recent acquisitions bolstering its European business. This diversification helps mitigate risks associated with any single market.
Strategic Acquisitions and Portfolio Expansion
Acquisitions, such as the Nicotine Replacement Therapy (NRT) business and rights to certain brands from Janssen Pharmaceutica, are contributing to revenue growth and expanding its consumer healthcare portfolio.
Focus on Higher-Margin Products
Dr. Reddy's is shifting towards specialty and branded consumer products to offset the typical price erosion in US generics, aiming for higher-margin revenue streams.
R&D Investment
Continued investment in R&D, with a significant portion of revenue allocated to it, sustains a robust pipeline, particularly in late-stage oncology and immunology assets.
Operational Efficiency
The company is leveraging AI/ML for supply chain optimization, reducing inventory lead times and improving working capital efficiency.
A real bull case compounds — each driver matters most when it strengthens margins, supports capital returns, and keeps the company above the market's minimum growth bar simultaneously.
RDY Stock Price Performance
52-week range context and price returns across multiple time horizons. Dividend contribution is shown separately in the Capital Return section.
Current Price
$13.46
52W Range Position
20%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$12.77
+5.4% from the low
52-Week High
$16.17
-16.8% from the high
1 Month
+2.44%
3 Month
-4.40%
YTD
-2.9%
1 Year
-0.4%
3Y CAGR
+3.6%
5Y CAGR
-1.0%
10Y CAGR
+4.9%
Range context matters because valuation compression and earnings misses rarely hit from the same starting point. A stock already far below its high can still fall, but it is no longer carrying the same embedded optimism as one pressing a fresh peak.
RDY vs Peers
Valuation, growth, and margin comparison against the closest publicly traded peers for this company.
Peer Set
Accurate peer set
Forward PE
0.2x
vs 9.3x median
-98% below peer median
Revenue Growth
+13.1%
vs +1.9% median
+582% above peer median
Net Margin
16.4%
vs 1.6% median
+941% above peer median
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
RDY RDY Dr. Reddy's Laboratories Limited | $11.2B | 0.2x | +13.1% | 16.4% | Buy | — |
SUN SUN Sunoco LP | $9.1B | 9.3x | +16.9% | 1.6% | Hold | +1.6% |
PRG PRGO Perrigo Company plc | $1.7B | 5.8x | -1.9% | -43.5% | Hold | +63.1% |
AMR AMRX Amneal Pharmaceuticals, Inc. | $4.3B | 13.7x | +8.0% | 2.4% | Buy | +24.8% |
TEV TEVA Teva Pharmaceutical Industries Limited | $42.3B | 14.7x | +1.9% | 9.0% | Buy | +7.3% |
VTR VTRS Viatris Inc. | $18.4B | 6.5x | -1.2% | -24.6% | Hold | -4.4% |
This peer comparison reflects companies with similar business models, product lines, or market positioning, supplemented by industry grouping when direct matches are limited.
RDY Dividend and Capital Return
RDY returns 0.8% total yield, led by a 0.62% dividend.
Dividend SustainableFCF Well Covered
Total Shareholder Yield
0.8%
Dividend + buyback return per year
Buyback Yield
0.1%
Dividend Yield
0.62%
Payout Ratio
11.8%
How RDY Splits Its Return
Div 0.62%
Dividend 0.62%Buybacks 0.1%
Dividend Profile
Yield, cadence, and growth quality
Dividend / Share
Trailing annualized cash dividend
$7.99
Growth Streak
Consecutive years of dividend increases
3Y
3Y Div CAGR
6.6%
5Y Div CAGR
6.7%
Ex-Dividend Date
—
Payment Cadence
Annual
1 payments over the last 12 months
Buyback Engine
How much per-share support comes from repurchases
Repurchases (TTM)
Cash used for buybacks in the latest trailing period
$1.4B
Estimated Shares Retired
103M
Approx. Share Reduction
12.4%
Shares Outstanding
Current diluted share count from the screening snapshot
834M
At 12.4%/year, buybacks mechanically lift EPS even with flat earnings — each remaining share represents a slightly larger piece of the company.
| Year | Div / Share | YoY Grw | BB Yield | Total Yield |
|---|---|---|---|---|
| 2025 | $0.09 | -4.5% | 12.6% | 73.2% |
| 2024 | $0.10 | -1.8% | 0.0% | 54.4% |
| 2023 | $0.10 | +29.1% | 0.0% | 52.5% |
| 2022 | $0.08 | +10.5% | 0.0% | 44.7% |
| 2021 | $0.07 | +3.6% | 11.7% | 52.3% |
FAQ
6 questionsRDY Investor Questions
Common questions answered from live analyst data and company financials.
01Is Dr. Reddy's Laboratories Limited (RDY) stock a buy or sell in 2026?
Dr. Reddy's Laboratories Limited (RDY) is rated Buy by Wall Street analysts as of 2026. Of 12 analysts covering the stock, 6 rate it Buy or Strong Buy, 4 rate it Hold, and 2 rate it Sell or Strong Sell. The bear case scenario is $479 and the bull case is $2007.
02Is Dr. Reddy's Laboratories Limited (RDY) stock overvalued in 2026?
RDY trades at 0.2x times forward earnings. The stock currently trades at a discount to the broader market. Based on current multiples versus the peer group, the relative model signals significantly undervalued. Whether the stock is over or undervalued ultimately depends on whether consensus earnings estimates are achievable.
03What are the main risks for Dr. Reddy's Laboratories Limited (RDY) stock in 2026?
The primary risks for RDY in 2026 are: (1) Regulatory Actions — Dr. (2) Revenue Decline from Patent Expirations — A significant concern for Dr. (3) Economic Slowdown — A slowdown in economic growth in India could adversely affect Dr. Each factor has the potential to pressure earnings or compress the stock's valuation multiple.
04What is Dr. Reddy's Laboratories Limited's revenue and earnings forecast?
Analyst consensus estimates RDY will report consensus revenue of $391.1B (+13.1% year-over-year) and EPS of $78.60 (+15.7% year-over-year) for the upcoming fiscal year. The following year, analysts project $445.7B in revenue.
05When does Dr. Reddy's Laboratories Limited (RDY) report its next earnings?
Dr. Reddy's Laboratories Limited is expected to report its next earnings on approximately 2026-05-08. Consensus expects EPS of $0.09 and revenue of $892M. Over recent quarters, RDY has beaten EPS estimates 45% of the time.
06How much free cash flow does Dr. Reddy's Laboratories Limited generate?
Dr. Reddy's Laboratories Limited (RDY) generated $24.3B in free cash flow over the trailing twelve months — a free cash flow margin of 7.0%. RDY returns capital to shareholders through dividends (0.6% yield) and share repurchases ($1.4B TTM).