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STOCK COMPARISON

Dr. Reddy's Laboratories vs Merck & Company: Fair Value & Quality

Both stocks run through our valuation models. Here is how Dr. Reddy's Laboratories (DRREDDY) and Merck & Company (MRK) compare, as of Sep 22, 2026.

As of Sep 22, 2026, Fair Value Calculator sees Merck & Company as the less overvalued of the two: Dr. Reddy's Laboratories trades at ₹1,185 versus a fair value of ₹875 (-26%), while Merck & Company trades at $147 versus $125 (-15%).
Dr. Reddy's Laboratories
DRREDDY.NSE · INR · Health Care
-26%
upside to fair value
overvalued
Price₹1,185
Fair Value₹875
Quality49/100
Merck & Company
MRK · USD · Health Care
-15%
upside to fair value
overvalued
Price$147
Fair Value$125
Quality70/100
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Head-to-head numbers

Green value = the better side for that row (for valuation multiples: lower = cheaper).

Dr. Reddy's LaboratoriesMerck & Company
Valuation
23.8×P/E (TTM)43.5×
3.00×P/S (TTM)4.64×
2.67×P/B5.80×
14.8×EV/EBITDA11.4×
1.55×PEG6.10×
−26.2%Fair value upside−14.7%
0.7%Dividend yield2.2%
₹8.00Dividend per share$3.28
Profitability
2%Operating margin39%
1.08×EBIT margin trend (5Y)2.70×
12%Return on equity19%
6%Return on assets13%
Growth
-12%Revenue growth (YoY)5%
11.0%Avg. growth/yr (3Y)3.1%
12.1%Avg. growth/yr (5Y)9.4%
+17.0%Value creation/yr+16.0%
Balance & size
12.4×Interest coverage (EBIT/interest)17.3×
0.03×Debt / equity0.89×
$11BMarket cap$305B
healthyGrowth qualityhealthy

Dr. Reddy's Laboratories leads: 8 to 7 metric wins.

Dash = not meaningfully computable, for example with negative equity.

Quality in detail

The quality score, broken down into the same factor families as on the stock page, 0 to 100 per family.

Dr. Reddy's Laboratoriesof which business quality 52 · market factors 46 Merck & Companyof which business quality 68 · market factors 89
ProfitabilityMargins and returns on capital today
50
74
Quality GrowthAre margins and returns improving?
12
36
CashflowEarnings quality: real cash, not paper profit
48
65
Fin. StrengthBalance sheet, leverage, solvency risk
80
68
InvestmentDisciplined investing over empire-building
28
71
Low VolatilityCalm price path (market factor)
91
83
MomentumPrice trend over the last 3–12 months (market factor)
31
87
52W MomentumDistance to the 52-week high (market factor)
20
100
Net IssuanceShare count: buybacks or dilution?
82
91

What the models say

How far the median fair value (base case) per model family sits from the current price, in percent. The amount in the currency of the trading venue is shown underneath.

above the price, more than 15% above close to the price, 85% to 115% of the price below the price, more than 15% below

Model familyDr. Reddy's LaboratoriesPrice ₹1,185Merck & CompanyPrice $147
DCF Models+1%close to the price₹1,199-20%below the price$117
Earnings-Based-46%below the price₹645-57%below the price$62.77
Dividend Discount-87%below the price₹153-59%below the price$60.35
Multiples-23%below the price₹913-17%below the price$122
Asset-Based-74%below the price₹303-90%below the price$14.27
Growth DCF-23%below the price₹918-50%below the price$74.00
Economic Profit-57%below the price₹514-43%below the price$83.85
Growth Earnings-13%close to the price₹1,031-6%close to the price$138
Minimum-87%below the price₹153-90%below the price$14.27
Maximum+1%close to the price₹1,199-6%close to the price$138
Median-34%below the price₹779-46%below the price$78.93
Geometric mean-50%below the price₹596-51%below the price$71.25

Minimum, maximum, median and geometric mean refer to the family values in this table. Geometric because deviations are ratios: half the price and twice the price average to 100%, not 125%.

Dr. Reddy's Laboratories: 20 of 26 models see the stock below the current price.

Merck & Company: 23 of 26 models see the stock below the current price.

Scenario ranges

From our cautious bear scenario to the optimistic bull scenario. The white tick is the current price (value above it), the green tick the fair value (value below it): if the price sits left of the fair value, there is room to rise.

Dr. Reddy's Laboratories
Price ₹1,185
Fair Value ₹875
Bear ₹579Bull ₹1,193
Merck & Company
Price $147
Fair Value $125
Bear $70.92Bull $188

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Ranked within their sector

Where each stock sits within its sector peer group. Band = middle 50% of peers, tick = median, dot = this stock.

Dr. Reddy's Laboratories · Health Care

Quality score49 · below median
Fair value upside-26% · below median

Merck & Company · Health Care

Quality score70 · Top 25%
Fair value upside-15% · above median

Bottom line

As of Sep 22, 2026, Fair Value Calculator sees Merck & Company as the less overvalued of the two: Dr. Reddy's Laboratories trades at ₹1,185 versus a fair value of ₹875 (-26%), while Merck & Company trades at $147 versus $125 (-15%).

Merck & Company has the higher quality score (70/100).

See the full analysis →

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A model-based valuation snapshot from 26 models. Values change with price and fundamentals; the date shown above applies.