Latest Ratios: P/E Ratio 21.9x · EV/EBITDA 14.8x · ROE 12.7%. (2001–2026 historical series)
Price-based multiples — how expensive the stock is relative to earnings, sales, book value, and cash flow
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Market Cap | $10.2B | $11.5B | $11.0B | $12.2B | $9.5B | $9.3B | $10.2B | $6.7B | $6.7B | $5.4B | $6.7B |
| Enterprise Value | $10.8B | $72.3B | $43.1B | $25.1B | $17.2B | $28.3B | $10.4B | $7.0B | $42.9B | $53.5B | $37.8B |
| P/E Ratio → | 21.85 | 0.26 | 0.19 | 0.22 | 0.21 | 0.39 | 0.59 | 0.07 | 0.07 | 0.11 | 0.11 |
| P/S Ratio | 2.78 | 0.03 | 0.03 | 0.04 | 0.04 | 0.04 | 4.00 | 0.04 | 0.04 | 0.04 | 0.05 |
| P/B Ratio | 2.63 | 0.03 | 0.03 | 0.04 | 0.04 | 0.05 | 4.31 | 3.27 | 0.05 | 0.04 | 0.05 |
| P/FCF | 30.56 | 0.36 | 0.91 | 0.68 | 0.24 | 1.02 | 0.44 | 0.28 | 0.32 | 0.78 | — |
| P/OCF | 17.32 | 0.20 | 0.24 | 0.27 | 0.16 | 0.33 | 0.29 | 0.22 | 0.23 | 0.30 | 0.31 |
P/E links to full P/E history page with 30-year chart
Enterprise-value multiples — capital-structure-neutral measures of total business value
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| EV / Revenue | — | 0.20 | 0.13 | 0.09 | 0.07 | 0.13 | 4.08 | 0.04 | 0.28 | 0.38 | 0.27 |
| EV / EBITDA | 14.77 | 1.02 | 0.48 | 0.30 | 0.25 | 0.68 | 17.26 | 0.24 | 1.30 | 2.26 | 1.52 |
| EV / EBIT | 21.32 | 1.17 | 0.54 | 0.34 | 0.28 | 0.85 | 28.76 | 0.24 | 1.84 | 3.54 | 2.47 |
| EV / FCF | — | 2.25 | 3.58 | 1.40 | 0.43 | 3.12 | 0.45 | 0.29 | 2.02 | 7.66 | — |
Margins and return-on-capital ratios measuring operating efficiency
Full margin charts and quarterly trend are on the Earnings History page
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross Margin | 52.8% | 52.8% | 58.5% | 58.6% | 56.7% | 53.1% | 50.8% | 53.8% | 54.2% | 53.7% | 55.6% |
| Operating Margin | 13.8% | 13.8% | 22.1% | 24.3% | 23.2% | 13.7% | 16.9% | 9.2% | 13.6% | 8.4% | 9.6% |
| Net Profit Margin | 12.8% | 12.8% | 17.4% | 19.9% | 18.3% | 11.0% | 9.1% | 11.2% | 12.2% | 6.9% | 8.5% |
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| ROE | 12.7% | 12.7% | 18.3% | 21.8% | 21.4% | 24.4% | 10.5% | 27.4% | 14.1% | 7.8% | 9.5% |
| ROA | 8.5% | 8.5% | 12.8% | 15.7% | 14.7% | 15.9% | 6.9% | 17.1% | 8.3% | 4.4% | 5.6% |
| ROIC | 9.1% | 9.1% | 16.3% | 19.1% | 19.1% | 20.8% | 13.2% | 13.4% | 8.9% | 5.4% | 7.3% |
| ROCE | 12.8% | 12.8% | 22.0% | 25.7% | 26.3% | 29.3% | 18.8% | 19.1% | 13.0% | 8.2% | 9.7% |
Solvency and debt-coverage ratios — lower is generally safer
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt / Equity | 0.20 | 0.20 | 0.14 | 0.07 | 0.06 | 0.18 | 0.18 | 0.14 | 0.27 | 0.40 | 0.40 |
| Debt / EBITDA | 1.07 | 1.07 | 0.53 | 0.24 | 0.19 | 0.82 | 0.69 | 0.01 | 1.16 | 2.15 | 1.99 |
| Net Debt / Equity | — | 0.16 | 0.10 | 0.05 | 0.03 | 0.10 | 0.09 | 0.13 | 0.26 | 0.38 | 0.25 |
| Net Debt / EBITDA | 0.86 | 0.86 | 0.36 | 0.16 | 0.11 | 0.46 | 0.35 | 0.01 | 1.09 | 2.03 | 1.25 |
| Debt / FCF | — | 1.89 | 2.67 | 0.72 | 0.19 | 2.10 | 0.01 | 0.01 | 1.70 | 6.88 | — |
| Interest Coverage | 15.66 | 15.66 | 28.14 | 43.00 | 43.27 | 34.71 | 0.37 | 2114.41 | 26.25 | 19.20 | 24.11 |
Short-term solvency ratios and asset-utilisation metrics
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Current Ratio | 1.80 | 1.80 | 1.92 | 2.58 | 2.38 | 1.93 | 1.78 | 1.79 | 1.92 | 1.57 | 1.18 |
| Quick Ratio | 1.35 | 1.35 | 1.37 | 1.92 | 1.81 | 1.39 | 1.23 | 1.31 | 1.36 | 1.16 | 0.85 |
| Cash Ratio | 0.52 | 0.52 | 0.44 | 0.85 | 0.72 | 0.47 | 0.41 | 0.35 | 0.41 | 0.30 | 0.21 |
| Asset Turnover | — | 0.62 | 0.66 | 0.72 | 0.76 | 0.73 | 0.70 | 56.88 | 0.68 | 0.63 | 0.64 |
| Inventory Turnover | 2.23 | 2.23 | 1.90 | 1.82 | 2.19 | 1.98 | 2.03 | 173.87 | 2.10 | 2.26 | 2.19 |
| Days Sales Outstanding | — | 102.45 | 123.10 | 124.65 | 123.51 | 136.66 | 120.49 | 1.71 | 110.63 | 129.01 | 118.56 |
Earnings, FCF, buyback, and dividend yields — total returns to shareholders
Full dividend history and growth charts are on the Dividend History page
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Dividend Yield | 0.7% | 60.7% | 60.5% | 54.4% | 52.5% | 44.7% | 40.6% | 58.4% | 59.5% | 73.5% | 50.6% |
| Payout Ratio | 15.5% | 15.5% | 11.8% | 11.9% | 11.0% | 17.6% | 1785.9% | 20.1% | 21.3% | 40.7% | 28.2% |
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings Yield | 4.6% | 389.3% | 513.8% | 455.4% | 475.6% | 254.2% | 168.8% | 1454.8% | 1396.2% | 902.3% | 897.8% |
| FCF Yield | 3.3% | 278.2% | 109.3% | 147.2% | 422.2% | 97.7% | 226.6% | 354.0% | 315.2% | 128.6% | — |
| Buyback Yield | 0.0% | 0.0% | 12.6% | 0.0% | 0.0% | 0.0% | 11.7% | 7.1% | 7.9% | 0.0% | 100.0% |
| Total Shareholder Yield | 0.7% | 60.7% | 73.2% | 54.4% | 52.5% | 44.7% | 52.3% | 65.5% | 67.4% | 73.5% | 100.0% |
| Shares Outstanding | — | $833M | $834M | $834M | $832M | $832M | $832M | $830M | $831M | $831M | $835M |
Includes 30+ ratios · 26 years · Updated daily
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Quick answers to the most common questions about buying RDY stock.
Dr. Reddy's Laboratories Limited's current P/E ratio is 21.9x. The historical average is 0.2x. This places it at the 100th percentile of its historical range.
Dr. Reddy's Laboratories Limited's current EV/EBITDA is 14.8x. This enterprise value multiple compares the company's total value (equity + debt - cash) to its EBITDA. The historical average is 3.4x.
Dr. Reddy's Laboratories Limited's return on equity (ROE) is 12.7%. The historical average is 15.5%.
Based on historical data, Dr. Reddy's Laboratories Limited is trading at a P/E of 21.9x. This is at the 100th percentile of its historical P/E range. Compare with industry peers and growth rates for a complete picture.
Dr. Reddy's Laboratories Limited's current dividend yield is 0.71% with a payout ratio of 15.5%.
Dr. Reddy's Laboratories Limited has 52.8% gross margin and 13.8% operating margin. Operating margin between 10-20% is typical for established companies.
Dr. Reddy's Laboratories Limited's Debt/EBITDA ratio is 1.1x, indicating moderate leverage. A ratio below 2x is generally considered financially healthy.
Key Metrics
Top Statement Risk
US pricing and regulatory overhang
Margin Compression Signals Structural Shift
Gross margin fell from 60.4% in 2025Q1 to 46.5% in 2027Q1, per reported financials, while operating margin collapsed to 3.7%, indicating severe pricing pressure and mix deterioration.
The sequential decline in gross margin across ten quarters, from 58.6% in 2024Q4 to 46.5% in 2027Q1, suggests that the company's high-margin complex generic portfolio is losing pricing power faster than new launches can offset. Operating margin contraction to 3.7% in 2027Q1, versus 21.1% in 2024Q4, implies that fixed R&D and regulatory costs are no longer being absorbed by revenue, pointing to negative operating leverage. This margin trajectory appears structural rather than cyclical, as the US generic pricing environment and regulatory delays persist, and investors should monitor whether the biosimilar pipeline can restore gross margins above 50%.
Return on Capital Decays Sharply
ROIC dropped from 7.6% in 2024Q4 to 0.5% in 2027Q1, per balance sheet data, while ROE fell from 9.2% to 1.2%, indicating a severe erosion in capital efficiency.
The collapse in ROIC and ROE over ten quarters reflects both margin compression and a rapidly expanding asset base, as total assets grew 48% while net income declined. The asset turnover ratio halved from 0.36 to 0.14, indicating that the company's heavy investment in PPE and acquisitions has not yet generated proportional revenue, suggesting a lag between capital deployment and returns. This decay in return on capital may indicate that the company is in a transition phase, funding biosimilar and complex generic growth that has yet to yield profitability, but the magnitude of decline warrants close monitoring of capital allocation discipline.
Working Capital Cycle Stretches Dangerously
Cash conversion cycle lengthened from 128 days in 2024Q4 to 215 days in 2027Q1, per reported figures, driven by DSO rising to 125 days and DIO to 163 days, signaling a severe working capital drain.
The 87-day increase in CCC over ten quarters indicates that RDY is tying up more cash in receivables and inventory, likely due to slower collections from US wholesalers and strategic inventory build-up ahead of complex generic launches. DSO rising from 62 to 125 days suggests that customers are taking longer to pay, which may reflect increased rebate and chargeback complexity or a shift in payer mix. The working capital drain, which consumed $12.0B in 2027Q1 per cash flow data, appears to be a primary driver of the negative free cash flow, and investors should monitor whether this is a temporary build-up or a structural inefficiency.
Leverage Rises from Minimal Base
Debt-to-equity tripled from 0.07 to 0.19 over ten quarters, per balance sheet data, while interest coverage fell from 28.0x to 2.35x, indicating a shift toward debt-funded expansion.
Although the absolute leverage remains low, the rapid increase in debt, with total debt reaching $72.0B, suggests a strategic pivot toward external financing for biosimilar R&D and acquisitions. Interest coverage collapsing from 28.0x to 2.35x in 2027Q1 reflects both higher debt levels and a sharp decline in operating income, which may indicate that debt service is becoming less comfortable. The D/EBITDA ratio spiking to 24.21 in 2027Q1, versus 1.07 in 2024Q4, is distorted by the collapse in EBITDA, but it underscores that the company's earnings power is no longer providing the same cushion for its debt obligations.
Liquidity Buffer Thins Amid Cash Crunch
Current ratio fell from 2.58 to 1.90 over ten quarters, per balance sheet data, while cash dropped to $11.2B, signaling a reduced buffer against operational shocks.
The decline in the current ratio, though still above 1.5, indicates that RDY's liquidity position is weakening as working capital absorbs cash and debt rises. The quick ratio of 1.39 in 2027Q1, down from 1.92 in 2024Q4, suggests that inventory is becoming a larger component of current assets, which may be less liquid in a stress scenario. Given the negative operating cash flow in 2027Q1 and the ongoing regulatory overhang, the company's ability to weather a prolonged downturn without additional external financing appears more constrained than in prior periods.
Misapplied ROE in Capital-Intensive Transition
ROE is commonly used to gauge RDY's profitability, but it obscures the impact of heavy capital expenditure and acquisition-driven asset growth, per reported financials, making ROIC a more accurate measure.
ROE fell from 9.2% to 1.2% over ten quarters, but this decline is amplified by the rapid expansion of the equity base through retained earnings and debt-funded asset growth, which does not reflect the underlying earning power of the operating business. The market may overreact to ROE deterioration without recognizing that the company is in a capital-intensive investment phase for biosimilars and complex generics, where returns are expected to lag. Instead, investors should focus on ROIC, which adjusts for the capital structure and better captures the return on the company's invested capital, though it too has declined sharply, indicating that the investment thesis hinges on future margin recovery.