Dr. Reddy’s Laboratories Ltd (RDY) fair value: what the stock is really worth
As of Oct 30, 2026: fair value (intrinsic value) of Dr. Reddy’s Laboratories Ltd stock $10.88, price $14.17, that is 23.2% below the price, quality 49 out of 100. Rating: overvalued. Calculated from audited financials with 26 valuation models and 37 quality factors, updated daily.
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HealthcareUS · ADR · Home India · ISIN US2561352038
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Price vs Fair Value
White line = price, green steps = our fair value per fiscal year. As of Nov 2, 2026.
How to read this chart
60‑month range $8.49 – $16.57 · fair‑value band $6.16 – $14.09 · the $14.17 price screens above the $10.88 fair value. Green steps = our fair value per fiscal year (point-in-time, no hindsight). As of Nov 2, 2026.
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Dr. Reddy's Laboratories Limited, together with its subsidiaries, operates as an integrated pharmaceutical company North America, Europe, India, Russia, and internationally. The company operates through Global Generics, Pharmaceutical Services and Active Ingredients (PSAI), and Others segment.
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Its Global Generics segment manufactures and markets prescription and over-the-counter finished pharmaceutical products that are marketed under a brand name or as a generic finished dosages with therapeutic equivalence to branded formulations, as well as engages in the biologics business.
The PSAI segment manufactures and markets active pharmaceutical ingredients and intermediates, which are principal ingredients for finished pharmaceutical products.
This segment also provides contract research services; and manufactures and sells active pharmaceutical ingredients and steroids with the customer requirements.
Its Others segment engages in developing therapies in the fields of oncology and inflammation; and research, development, and commercialization of differentiated formulations.
The company offers its products for various therapeutic categories, including gastro-intestinal, cardiovascular, anti-diabetic, dermatology, oncology, respiratory, stomatology, urology, and nephrology, vaccines, vitamins and minerals, and pain management.
Dr. Reddy's Laboratories Limited was incorporated in 1984 and is headquartered in Hyderabad, India.
Stock analysis
Dr. Reddy’s Laboratories Ltd (RDY) currently trades at $14.17, while our model-based Fair Value estimate is $10.88, 23.2% below the price, so the stock looks overvalued today.
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Valuation
Bull case: the DCF Models group reads highest at a median of $12.65 per share, and 5 of the 26 models we run sit above the $14.17 price.
Bear case: the Asset-Based group reads lowest at $1.24, and 21 of the 26 models stay below the price. Data coverage for this calculation is high.
Scenario range: $6.16 (bear) to $14.09 (bull), the price of $14.17 sits above it. Bear and bull are the same models on cautious and optimistic assumptions, a range, not a price target.
Quality & growth
The Quality Score stands at 49/100 (below-average quality), in the Healthcare sector.
Mixed Growth: Revenue is growing, but margins or cash flow do not fully confirm the trend.
Dr. Reddy’s Laboratories Ltd ADR reported revenue of ₹353B in FY2026 versus ₹214B in FY2022, a compound +13.3%/yr. Reported net income was ₹45.1B in FY2026, compounding +17.6%/yr from FY2022.
Key figures
Market cap $11.8B Large · P/E ratio 32.2 · P/S ratio 4.11 · EPS (TTM) $0.4400 · Dividend yield 0.6% · Net margin 12.8% · Return on equity 8.8% · Return on assets (EBIT) 13.7%.
Competitive moat
Our AI-assisted moat analysis scores the competitive advantage at 40 out of 100 (medium confidence).
What moves the price
The share trades about 7% below its 52-week high and 25% above its 52-week low, currently above its 200-day average.
For context, the median of 10 Healthcare peers we cover trades at −27% fair-value upside, at −23%, RDY screens cheaper than that median.
Fair Value models
Bear$6.16Fair Value $10.88Bull$14.09
Price $14.17 · Downside -23.2%
Model ⓘEach model values the company its own way (discounted cash flow, earnings, assets, dividends). The fair value above starts from their evidence-weighted blend, not from a single model. In cyclical trough or peak years, after dilution or a stock split it is adjusted afterwards, so it can sit above or below the models. Based on fiscal year 2026 figures (about 7 months old). Earnings retained since then ($0.2105 per share) are deliberately not added.Bear ⓘBear = the cautious scenario: the same model computed with conservative anchors (lower growth, margins and valuation multiples). Together with Bull it frames a plausible valuation range, not a price target.BaseBull ⓘBull = the optimistic scenario: the same model computed with favourable anchors (higher growth, margins and valuation multiples). Together with Bear it frames a plausible valuation range, not a price target. If a model's bull case is above four times its base value, the table shows that limit with a > sign (like the overall Bull above): beyond it no assumption holds.Coverage ⓘCoverage = how well-backed THIS model's estimate is for this stock (0–100): how complete and reliable its input data are, and how well the model fits the company. The final Fair Value is an evidence-weighted blend, so better-evidenced models count more. Green ≥70, amber 50–69, grey below 50.
Growth Quality ⓘGrowth is valuable only when reinvestment earns attractive returns (Aswath Damodaran): sustainable growth depends on return on capital, reinvestment and efficiency. Basis: total company revenue over the periods shown on the cards (3Y/5Y/all years), not per share, so a merger can show up as a growth jump; per-share earnings growth is in the value-creation card.80/100
Revenue is growing, but margins or cash flow do not fully confirm the trend.
Revenue growth 1 year
+8.6%
Revenue growth 3 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+12.9%
Revenue growth 26 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+36.3%
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What shareholders gained per year (last 5 years), in INR ⓘWhat the business itself delivers per year: earnings growth per share plus the dividend yield. This is what you get IF the market keeps valuing the stock the same way: it contains no assumption about the market changing its mind. Computed per share, so buybacks count and a merger does not pass as growth. For a company that pays no dividend it is pure earnings growth per share. Period: earnings growth per share as CAGR over the last 5 reported fiscal years (annual statements), plus the current dividend yield. The start value is the median of the three years around the start, so a single crisis year (a pandemic or a write-down) does not distort the rate. Basis: adjusted. Measured in INR: this currency has depreciated against the euro and dollar over the long run, so part of the nominal rate is currency erosion that never reaches a EUR/USD investor.
+17.3%
Earnings growth per share plus dividend.
Earnings per share, growth per year+16.7%
Dividend (yield on the price)0.6%
Pace: 5 vs 10 years ⓘTwo data points, not a trend model: earnings growth per share over the last 5 fiscal years against the last 10. Labelled "steady" when both rates are within 3 percentage points of each other, otherwise picking up or flattening. Shown only when ten years of history exist.18.2% vs 8.8%, picking up
Profit margin 2021 to 2026 ⓘOperating margin then vs now, from reported annual statements. A falling margin after a boom year is the classic peak-earnings signal: the growth rate then leans on an inflated base.17% → 14%
Pace: the 5-year rate starts in 2021 (pandemic)
Growth Forecast
A lot of optimism in the price
The price assumes less growth than the company has delivered so far and more than analysts expect.
What the price assumes ⓘThis turns our valuation around: instead of asking what the share is worth, it asks what growth the current price requires. It uses the cash the company keeps after all spending (free cash flow), the same discount rate as our models, five years of growth, then slowing evenly to 2 % a year by year ten. Compared with the analysts' sales forecasts extended to the same five years (at least three analysts, for context only, it does not enter the Fair Value): within 3 percentage points counts as "in line" (amber), below that little optimism (green), above that a lot of optimism (red).
+14.8%
Yearly growth needed for the next five years to justify today's price.
What forecasts expect ⓘAnalysts publish sales forecasts for the next two fiscal years. For the years after that, growth slows evenly to 2 % a year by year ten (2 % is the long-run rate our models use). Projected years are marked as such.
+7.7%
Yearly sales growth analysts expect, extended to five years.
After inflation (figures in INR, India: IMF forecast 4.1% a year to 2030, 4.7% from 2016 to 2025) that is about +10.3% a year for the price and +3.4% for the forecasts.
News mood ⓘNews mood, the average tone of recent news (87 articles), rated against how stocks are usually covered. 🚀 Hype = unusually upbeat · 🙂 Positive = above average · 😐 Neutral = typical · 🙁 Negative = below average · 😨 Very negative = unusually downbeat. It reflects the tone of coverage, not our valuation.Very negative
Compare Dr. Reddy’s Laboratories Ltd ADR with another stock
Price, fair value, quality and upside side by side.
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Peer GroupⓘHow this stock ranks against its industry: the green marker is this stock, the band is the typical 25–75% peer range, and the tick is the median.Drug Manufacturers - Specialty & Generic · 550 stocks
Beats the industry median on 4/15 measures
Overall it trails its industry peers.
Valuation
Quality Score49 · Below median
Fair Value upside−23.2% · Below median
Profitability
Return on equity (12 months)8.8% · Above median
Return on assets7.9% · Above median
Net margin (12 months)10.0% · Above median
Operating margin (12 months)4.3% · Below median
Growth and dividend
Revenue growth (quarter YoY)−5.6% · Below median
Dividend yield (12 months)0.6% · Bottom 25%
Balance sheet
Debt / equity0.03× · Below median
Valuation Multiplesvs Drug Manufacturers - Specialty & Generic median · lower = cheaper
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Is Dr. Reddy’s Laboratories Ltd (RDY) overvalued or undervalued?
As of Nov 2, 2026, our model estimates a fair value of $10.88 versus a price of $14.17, about 23% lower (overvalued).
What is the fair value of RDY?
Our model-based fair value for Dr. Reddy’s Laboratories Ltd ADR is $10.88 (as of Nov 2, 2026), built from audited fundamentals. The current price: $14.17.
What is the quality score of RDY?
Dr. Reddy’s Laboratories Ltd ADR has a Quality Score of 49/100. It measures business quality (profitability, growth, cash flow, balance-sheet strength, investment discipline, share issuance). Market factors such as price momentum and volatility do not enter the number; they are shown separately in the detail view.
What is the price target for Dr. Reddy’s Laboratories Ltd (RDY)?
Our model-based price target is the fair value of $10.88 (as of Nov 2, 2026) from 26 valuation models. Cautious scenario $6.16, optimistic scenario $14.09. It is a calculation from audited fundamentals, not an analyst target.
What is the Dr. Reddy’s Laboratories Ltd ADR stock forecast for 2026?
Our models put fair value at $10.88, about 23% lower versus a price of $14.17 (overvalued). Cautious scenario $6.16, optimistic scenario $14.09. The calculation is refreshed regularly with new filings.
What is the revenue of Dr. Reddy’s Laboratories Ltd (RDY)?
Dr. Reddy’s Laboratories Ltd ADR reported trailing-twelve-month revenue of about ₹331B (latest available figure, as of Nov 2, 2026).
Does Dr. Reddy’s Laboratories Ltd ADR pay a dividend?
Dr. Reddy’s Laboratories Ltd ADR currently shows a dividend yield of 0.59% relative to its recent price (as of Nov 2, 2026).
What growth is priced into Dr. Reddy’s Laboratories Ltd (RDY)?
For today's price to be fair in a discounted-cash-flow model, Dr. Reddy’s Laboratories Ltd ADR would have to grow free cash flow by +14.8 % per year for five years (discount rate 8.1 %, then slowing evenly to 2 % perpetual growth by year ten). Over the last 5 years revenue grew +168.0 % per year. As of Nov 2, 2026.
What discount rate (WACC) does the fair value of RDY use?
Our models discount Dr. Reddy’s Laboratories Ltd ADR at 8.1 %: a base by market capitalisation (large), damped by beta 0.25, country premium for USA. The same rate applies in all 26 models.
What is a reverse DCF?
A reverse DCF turns the usual calculation around. Instead of deriving a value from assumptions, it takes today's price as given and asks: what free-cash-flow growth would a company have to deliver for exactly this price to be fair? The result is not a forecast but the expectation already priced in. For Dr. Reddy’s Laboratories Ltd ADR that is +14.8 % per year a year over ten years, using the same discount rate (8.1 %) and the same formula as our fair value.
How much growth has Dr. Reddy’s Laboratories Ltd (RDY) delivered so far?
Over the past 5 years revenue at Dr. Reddy’s Laboratories Ltd ADR grew +168.0 % a year. The price currently implies +14.8 % per year free-cash-flow growth a year. Comparing the two shows how much confidence is in the price: if it demands more than has been delivered, the business has to accelerate for the maths to work.
How fast is the sector of Dr. Reddy’s Laboratories Ltd (RDY) growing?
The median revenue growth in the sector is +6.4 % a year. That is the yardstick for the growth priced into Dr. Reddy’s Laboratories Ltd ADR (+14.8 % per year a year): it shows whether the expectation is within the usual range or beyond it.
What is the free cash flow yield of Dr. Reddy’s Laboratories Ltd (RDY)?
The free-cash-flow yield on the price is 2.87 %: that much free cash flow Dr. Reddy’s Laboratories Ltd ADR produces per unit of market value. When it exceeds the discount rate of our models (8.1 %), the business already earns more than its cost of capital demands, and the price needs little additional growth.
What is the intrinsic value of Dr. Reddy’s Laboratories Ltd (RDY)?
Intrinsic value and fair value mean the same thing: what the business is worth on its numbers, independent of the share price. For Dr. Reddy’s Laboratories Ltd ADR it is $10.88 per share (as of Nov 2, 2026), against a price of $14.17. It is the blended result of 26 valuation models (cash flow, earnings, asset, dividend).
Is Dr. Reddy’s Laboratories Ltd ADR stock overvalued or undervalued in 2026?
As of Nov 2, 2026, RDY trades above its calculated fair value: price $14.17, fair value $10.88, a gap of about −23% (overvalued). The calculation is refreshed with each new quarterly report, so the verdict can change during the year.
Is fair value the same as the market price of RDY?
No. The price is what the market pays today ($14.17); the fair value is what the company's own numbers justify ($10.88). For Dr. Reddy’s Laboratories Ltd ADR the two are $3.29 per share apart. That gap is exactly why we show both numbers side by side.
How much is Dr. Reddy’s Laboratories Ltd ADR worth?
The market values Dr. Reddy’s Laboratories Ltd ADR at about $11.8B (market capitalisation, as of Nov 2, 2026). Per share that is $14.17; our models calculate a fair value of $10.88 per share.
What do the bullish and bearish scenarios say about RDY?
Our models span a range for Dr. Reddy’s Laboratories Ltd ADR: cautious scenario $6.16, base $10.88, optimistic $14.09 per share (as of Nov 2, 2026, price $14.17). The range comes from different growth and margin assumptions, not from analyst opinions.
What is the P/E ratio of RDY?
Dr. Reddy’s Laboratories Ltd ADR trades at a price-to-earnings ratio of 32.2 (as of Nov 2, 2026). A P/E on its own says little: it compares the price with ONE year of profit, while our fair value of $10.88 is built from several models across several years. Excluding one-off items of fiscal year 2026 it is 26.9 (reported for FY2026: 24.8). Other multiples: PEG 1.6, P/B 3.0, P/S 3.4, EV/EBITDA 20.4.
What is the PEG ratio of RDY?
The PEG ratio of Dr. Reddy’s Laboratories Ltd ADR is 1.65 (P/E divided by earnings growth, as of Nov 2, 2026). That is above 1, so the growth is already paid for in the price.
How solid is the balance sheet of Dr. Reddy’s Laboratories Ltd (RDY)?
Balance-sheet figures for Dr. Reddy’s Laboratories Ltd ADR (as of Nov 2, 2026): return on equity 8.8%, debt of 0.03 per unit of equity. They feed the Quality Score of 49/100, which measures business quality independently of the share price.
How far is RDY from its 52-week high?
Dr. Reddy’s Laboratories Ltd ADR trades at $14.17, about 7% below its 52-week high of $15.23 and 25% above the low of $11.30 (as of Oct 30, 2026). Distance from the high says nothing about value: that is what the fair value of $10.88 is for.
Which stocks are comparable to Dr. Reddy’s Laboratories Ltd ADR?
From the same area (Healthcare) we also value Merck KGaA, Takeda Pharmaceutical Company, Galderma Group, Jiangsu Hengrui Pharmaceuticals Co, among others. Each of them has its own fair-value calculation on this site using the same models, so the comparison is like for like.
Is Dr. Reddy’s Laboratories Ltd ADR stock attractive at the current price?
The data as of Nov 2, 2026: price $14.17, calculated fair value $10.88 (−23%), Quality Score 49/100, from 26 models. Whether that fits your horizon and risk tolerance is your call. We provide the calculation, not investment advice.
How is the fair value of RDY calculated?
We run Dr. Reddy’s Laboratories Ltd ADR through 26 models from four families: discounted cash flow, earnings models, asset and balance-sheet models, and dividend models. Every model gets the same audited fundamentals; the result is the weighted average of $10.88, with the spread shown as a cautious and an optimistic scenario.
Is it still worth investing in stocks now?
The global stock market currently sits 14.9 % above its aggregate fair value. Dr. Reddy’s Laboratories Ltd ADR itself currently trades above fair value. An expensive market is no reason to stay out and no reason to buy everything at once: keep a broad savings plan running, buy single stocks only with money you can do without, and hold part of your money liquid while the market is high. The full picture including sectors is on is it worth investing now.
What is the share price of Dr. Reddy’s Laboratories Ltd (RDY)?
The closing price on Oct 30, 2026 was $14.17. Our model-based fair value is $10.88, about 23% lower (overvalued). We carry closing prices from our data provider, not a live tick.
What should I pay attention to with Dr. Reddy’s Laboratories Ltd ADR right now?
Weak quality (49/100) and above fair value at the same time, the margin of safety is missing on both counts. A fairly wide model range ($6.16 to $14.09) leaves room in how you read the outcome.
Where does the earnings growth of Dr. Reddy’s Laboratories Ltd (RDY) come from?
Earnings per share at Dr. Reddy’s Laboratories Ltd ADR grew +12.8 % a year from 2015 to 2026. Broken into its drivers: revenue per share +9.1 %, EBIT margin +2.6 %, tax rate −0.2 %, residual (interest, one-offs) +0.9 %. The four rates multiply to the earnings growth rate, they do not add up. Start and end are three-year averages so a single exceptional year does not distort the result.
Key figures of Dr. Reddy’s Laboratories Ltd ADR
How large is the market capitalisation of Dr. Reddy’s Laboratories Ltd (RDY)?
The market capitalisation of Dr. Reddy’s Laboratories Ltd ADR is $11.8B. The stock-market value of the whole company: share price times number of shares. It is what the market asks for the entire business today.
What is the P/S ratio of Dr. Reddy’s Laboratories Ltd (RDY)?
The price-to-sales ratio of Dr. Reddy’s Laboratories Ltd ADR is 4.11 (P/E × margin). Price to sales: market value relative to yearly revenue. Useful when profit is thin or distorted.
What are the earnings per share of Dr. Reddy’s Laboratories Ltd (RDY)?
Earnings per share at Dr. Reddy’s Laboratories Ltd ADR are $0.4400 (price ÷ EPS = P/E 32.2). Earnings per share over the last twelve months: total profit spread across every single share.
What is the dividend yield of Dr. Reddy’s Laboratories Ltd (RDY)?
The dividend yield of Dr. Reddy’s Laboratories Ltd ADR is 0.6% (payout 16.0%, on adjusted earnings, reported 14.8%). Yearly dividend relative to the share price. 3% pays 3 per 100 invested. Below: how much of profit is used for it.
What is the net margin of Dr. Reddy’s Laboratories Ltd (RDY)?
The net margin of Dr. Reddy’s Laboratories Ltd ADR is 12.8% (fiscal year 2026). How much of every unit of revenue ends up as profit. 10% means 10 cents of profit per dollar of sales.
What is the return on equity of Dr. Reddy’s Laboratories Ltd (RDY)?
The return on equity (ROE) of Dr. Reddy’s Laboratories Ltd ADR is 8.8% (last twelve months). Profit relative to shareholders' equity, how efficiently the company works with its owners' money.
What is the EBIT return on assets of Dr. Reddy’s Laboratories Ltd (RDY)?
On an EBIT basis the return on assets of Dr. Reddy’s Laboratories Ltd ADR is 13.7% (avg 5y). Operating profit (EBIT) relative to everything the company owns, as a multi-year average. It describes the business model rather than one good or bad year.
What is the operating margin of Dr. Reddy’s Laboratories Ltd (RDY)?
The operating margin of Dr. Reddy’s Laboratories Ltd ADR is 4.3% (last twelve months). Profit from the core business (before interest and taxes) relative to revenue.
How fast is revenue growing at Dr. Reddy’s Laboratories Ltd (RDY)?
Revenue at Dr. Reddy’s Laboratories Ltd ADR is growing −5.6% versus a year earlier (3y avg +12.9%). How much revenue grew versus a year earlier (YoY). The 3-year average next to it puts the single year in context.
How fast are earnings growing at Dr. Reddy’s Laboratories Ltd (RDY)?
Earnings per share at Dr. Reddy’s Laboratories Ltd ADR are growing −68.7% versus a year earlier. How much earnings per share grew versus a year earlier.
How much net debt does Dr. Reddy’s Laboratories Ltd (RDY) carry?
The net debt of Dr. Reddy’s Laboratories Ltd ADR is ₹60.7B (fiscal year 2026, ≈ 1.9 yrs of FCF). Debt minus cash on hand. The note shows how many years of free cash flow could in theory pay it off.
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Broad data
Nov 2, 2026