Dr. Reddy's Laboratories Limited (DRREDDY.NS) Valuation

Valuation

Model-based estimates, not advice. The DCF is the discounted-cash-flow value per share; compare it with the price, not as a target.

DCF fair value

+25.1%

₹1,696.58

vs ₹1,355.90 price

Levered DCF

₹1,098.18

After debt service

Piotroski score

7 / 9

Strong

Altman Z-score

5.66

Safe zone

Rating

B+

Overall 3 / 5

Ratios by fiscal year

Margins and yields are shares of revenue, equity or price; multiples are ×.

Metric	FY2026	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019
P/E	24.38×	17×	18.71×	17.07×	30.23×	43.44×	26.53×	24.71×
P/B	2.77×	2.88×	3.71×	3.33×	3.75×	4.34×	3.34×	3.31×
P/S	3.11×	2.95×	3.73×	3.13×	3.33×	3.96×	2.97×	3.02×
EV / EBITDA	14.13×	11.03×	13.12×	11.79×	15.36×	16.77×	12.88×	15.71×
Gross margin	52.8%	58.5%	58.6%	56.7%	53.1%	54.3%	53.8%	54.2%
Operating margin	13.8%	22.1%	24.3%	23.2%	13.7%	12.8%	9.2%	13.6%
Net margin	12.8%	17.4%	19.9%	18.3%	11.0%	9.1%	11.2%	12.2%
Current ratio	1.8×	1.92×	2.58×	2.38×	1.93×	1.78×	1.79×	1.92×
Debt / equity	0.24×	0.14×	0.07×	0.06×	0.18×	0.18×	0.14×	0.27×
Interest coverage	12.42×	25.4×	39.58×	40.02×	30.77×	25.03×	16.27×	23.5×
Dividend yield	0.6%	0.7%	0.6%	0.6%	0.6%	0.6%	0.8%	0.9%
Payout ratio	15.5%	11.8%	11.9%	11.0%	17.6%	24.1%	20.1%	21.3%

Key metrics by fiscal year

Metric	FY2026	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019
Return on equity	11.4%	17.0%	19.8%	19.5%	12.4%	10.0%	12.6%	13.4%
Return on invested capital	7.5%	13.3%	17.2%	17.1%	9.3%	7.7%	8.9%	9.6%
Return on assets	7.4%	11.5%	14.4%	14.0%	7.9%	6.5%	8.4%	8.3%
Free cash flow yield	2.9%	2.0%	1.7%	5.2%	1.3%	3.1%	4.6%	4.6%
Earnings yield	4.1%	5.9%	5.3%	5.9%	3.3%	2.3%	3.8%	4.0%
Enterprise value	₹1.1T	₹993.3B	₹1.1T	₹776.9B	₹733.5B	₹766.5B	₹538.3B	₹500.6B
Net debt / EBITDA	0.94×	0.36×	0.16×	0.12×	0.4×	0.34×	0.48×	1.13×
Cash conversion cycle (days)	233	239	238	233	263	256	239	229