# Dr. Reddy's Laboratories (DRREDDY.NSE)

Canonical: https://gigainvestors.com/s/DRREDDY.NSE

Analysis as of: 2026-10-16T07:33:23.567Z. Financial observations: FY2015–FY2026.

Listing currency: INR. Reporting currency: INR.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: INR 1,216.00 per share; close as of 2026-10-14.

Estimated value: low INR 729.67 per share, central INR 881.88 per share, high INR 997.13 per share. Buy at or below the central value INR 881.88 per share. Valuation as of 2026-10-16T07:33:23.567Z; scenarios are not confidence intervals.

Expected annual return: 9.0% at the stated quote. About 9.0% a year at today's price (required return 11.4%). required return 11.4% a year (IN 10-year bond 7.4% + 4 points).

## Checklist

### understandable: fail

- 1 revenue decline in the last 10 years (informational)

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 0

- Operating margin variation: 0.36×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.10×

- FY2018: 0.09×

- FY2019: 0.13×

- FY2020: 0.08×

- FY2021: 0.14×

- FY2022: 0.12×

- FY2023: 0.21×

- FY2024: 0.23×

- FY2025: 0.21×

- FY2026: 0.13×

### moat: fail

- The return floor includes all equity, debt and leases without deducting cash or goodwill. Only a floor above the hurdle establishes a pass.

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 14.9%

- ROIC, second-lowest year: 9.4%

- Conservative return floor, median: 9.1%

- Conservative return floor, second lowest: 6.8%

- Years with nonpositive capital: 0

- Capital spending / revenue: 8.2%

- ROIC including acquisitions, ten-year median: 11.4%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2022: 9.4%

- FY2023: 17.5%

- FY2024: 17.8%

- FY2025: 14.9%

- FY2026: 8.3%

### economics: fail

- incremental invested capital return below threshold

- Owner earnings / net income, 5-yr: 0.92×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: INR 203B

- Net income, five-year total: INR 221B

- Return on incremental invested capital: 9.8%

- Working capital / revenue, annual change: 0.4 pp

- Working capital / revenue, change between three-year averages: 3.2 pp

- Working capital / revenue, final three-year average: 42.4%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 0.96×

- FY2023: 0.98×

- FY2024: 0.98×

- FY2025: 0.98×

- FY2026: 0.66×

### management: pass

- Historical market-dollar context (not the management verdict): 2017 to 2026 (9 years)

- buybacks leaned toward cheaper years (informational)

- Per-share earnings: 15.59 to 66.92 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -0.2%

- Ordinary dilution, 5-year annual growth: 0.0%

- Market cap gain: INR 609B

- Cumulative retained earnings: INR 245B

- Diluted shares, 10-year annual growth: -0.2%

- Diluted shares, 5-year annual growth: 0.0%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value growth: 20.0%

- Per-share value change: INR 51.33

- Per-share value, starting three-year median: INR 15.59

- Per-share value, ending three-year median: INR 66.92

- Buybacks concentrated in cheaper years (correlation): 0.50

- Average buyback yield: 0.1%

- Buyback history: 3 years

- Debt-funded buybacks: No

- Cumulative net income, 10 years: INR 303B

- ROIC, last three-year median: 14.9%

Chart: Earnings per share; fiscal year observations.

- FY2017: INR 15.59

- FY2018: INR 11.39

- FY2019: INR 23.47

- FY2020: INR 24.40

- FY2021: INR 23.47

- FY2022: INR 26.24

- FY2023: INR 54.18

- FY2024: INR 66.92

- FY2025: INR 67.79

- FY2026: INR 50.35

### accounting: pass

- Sloan accruals: -2.6%

- Receivables to sales index (DSRI): 1.08×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.6%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.35×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.32×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -3.9%

- FY2018: -3.8%

- FY2019: -4.1%

- FY2020: -4.1%

- FY2021: -6.1%

- FY2022: -2.1%

- FY2023: -4.3%

- FY2024: 2.7%

- FY2025: 2.1%

- FY2026: -2.6%

## Holders

## Price story

Price needs cash profits to grow 7.5% a year for ten years · sales +3.2%

Story as of 2026-10-16T09:59:55.931Z; price observation 2026-10-14.

Price needs cash profits to grow 7.5% a year for ten years

### Sales · FY2025–2026

sales +3.2%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2017: INR 142B 

- FY2018: INR 143B 

- FY2019: INR 154B 

- FY2020: INR 175B 

- FY2021: INR 190B 

- FY2022: INR 215B 

- FY2023: INR 247B 

- FY2024: INR 280B 

- FY2025: INR 326B 

- FY2026: INR 337B 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in pharmaceuticals; annual sales are INR 337 billion.

- Source: https://www.screener.in/company/DRREDDY/consolidated/ (filed 2026-10-16T07:33:23.567Z); FY2026: revenue 337000000000; operatingIncome 43950000000; margin = operatingIncome / revenue.

### Why customers stay

Margins ranged from 13% to 23.1% during 2024–26; it earns 14.9% on its capital.

- Source: https://www.screener.in/company/DRREDDY/consolidated/ (filed 2026-10-16T07:33:23.567Z); FY2024: operatingIncome / revenue = 23.1%.

- Source: https://www.screener.in/company/DRREDDY/consolidated/ (filed 2026-10-16T07:33:23.567Z); FY2025: operatingIncome / revenue = 21%.

- Source: https://www.screener.in/company/DRREDDY/consolidated/ (filed 2026-10-16T07:33:23.567Z); FY2026: operatingIncome / revenue = 13%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:23.567Z); 10-year return on capital observations [[2022,0.09414968135019894],[2023,0.17512390631430155],[2024,0.177872892533035],[2025,0.14896769717956235],[2026,0.0829503423020641]]; median 0.14896769717956235. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Reinvests 29.1% of cash earnings; earns 9.8% on new investment.

- Source: https://www.screener.in/company/DRREDDY/consolidated/ (filed 2026-10-16T07:33:23.567Z); FY2017: growth capex 0; upkeep 12220000000; owner earnings 10970000000. Growth capex / owner earnings = 0.

- Source: https://www.screener.in/company/DRREDDY/consolidated/ (filed 2026-10-16T07:33:23.567Z); FY2018: growth capex 270000000; upkeep 10770000000; owner earnings 9470000000. Growth capex / owner earnings = 0.028511087645195353.

- Source: https://www.screener.in/company/DRREDDY/consolidated/ (filed 2026-10-16T07:33:23.567Z); FY2019: growth capex 0; upkeep 8380000000; owner earnings 22470000000. Growth capex / owner earnings = 0.

- Source: https://www.screener.in/company/DRREDDY/consolidated/ (filed 2026-10-16T07:33:23.567Z); FY2020: growth capex 0; upkeep 6120000000; owner earnings 25770000000. Growth capex / owner earnings = 0.

- Source: https://www.screener.in/company/DRREDDY/consolidated/ (filed 2026-10-16T07:33:23.567Z); FY2021: growth capex 270000000; upkeep 12290000000; owner earnings 19520000000. Growth capex / owner earnings = 0.013831967213114754.

- Source: https://www.screener.in/company/DRREDDY/consolidated/ (filed 2026-10-16T07:33:23.567Z); FY2022: growth capex 7400000000; upkeep 11650000000; cash acquisitions 326000000; owner earnings 21035000000. Growth capex plus acquisitions / owner earnings = 0.36729260755883053.

- Source: https://www.screener.in/company/DRREDDY/consolidated/ (filed 2026-10-16T07:33:23.567Z); FY2023: growth capex 6370000000; upkeep 12500000000; cash acquisitions 0; owner earnings 44055000000. Growth capex plus acquisitions / owner earnings = 0.1445919872886165.

- Source: https://www.screener.in/company/DRREDDY/consolidated/ (filed 2026-10-16T07:33:23.567Z); FY2024: growth capex 12740000000; upkeep 14700000000; cash acquisitions 0; owner earnings 54633000000. Growth capex plus acquisitions / owner earnings = 0.23319239287610052.

- Source: https://www.screener.in/company/DRREDDY/consolidated/ (filed 2026-10-16T07:33:23.567Z); FY2025: growth capex 17360000000; upkeep 17040000000; cash acquisitions 53096000000; owner earnings 55256000000. Growth capex plus acquisitions / owner earnings = 1.27508324887795.

- Source: https://www.screener.in/company/DRREDDY/consolidated/ (filed 2026-10-16T07:33:23.567Z); FY2026: growth capex 4933413812.333572; upkeep 33466586187.666428; cash acquisitions 3152000000; owner earnings 27820413812.333572. Growth capex plus acquisitions / owner earnings = 0.290628811881622.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:23.567Z); Incremental return on capital 0.09814259170050238, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:23.567Z); Dividend observations: [[2017,3390000000],[2018,3990000000],[2019,4000000000],[2020,3920000000],[2021,4150000000],[2022,4150000000],[2023,4980000000],[2024,6650000000],[2025,6660000000],[2026,6660000000]]. Zero only counted when supported by a complete cash-flow statement.

### What the price says

The price assumes cash profits grow 7.5% yearly over ten years; actual growth was 3.2%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:23.567Z); Ten-year compound average after fade. Initial solved rate 0.0939486951210825. Price 1216; FX 1; discount 0.11391000000000001; same standard ten-year fade to terminal 0.03. FY2016 owner earnings/share 24.34009012809716 → FY2026 33.38317053029065. Closing-price date 2026-10-14.

## Monthly share-price history (INR per share)

- 2016-11: INR 639.38 per share

- 2016-12: INR 612.08 per share

- 2017-01: INR 603.76 per share

- 2017-02: INR 569.99 per share

- 2017-03: INR 526.47 per share

- 2017-04: INR 519.83 per share

- 2017-05: INR 504.77 per share

- 2017-06: INR 538.02 per share

- 2017-07: INR 476.64 per share

- 2017-08: INR 404.18 per share

- 2017-09: INR 465.75 per share

- 2017-10: INR 485.63 per share

- 2017-11: INR 456.81 per share

- 2017-12: INR 482.84 per share

- 2018-01: INR 445.07 per share

- 2018-02: INR 447.45 per share

- 2018-03: INR 416.11 per share

- 2018-04: INR 421.97 per share

- 2018-05: INR 387.32 per share

- 2018-06: INR 447.01 per share

- 2018-07: INR 425.56 per share

- 2018-08: INR 498.40 per share

- 2018-09: INR 506.13 per share

- 2018-10: INR 508.49 per share

- 2018-11: INR 544.44 per share

- 2018-12: INR 523.30 per share

- 2019-01: INR 544.16 per share

- 2019-02: INR 526.33 per share

- 2019-03: INR 556.05 per share

- 2019-04: INR 586.75 per share

- 2019-05: INR 535.67 per share

- 2019-06: INR 510.09 per share

- 2019-07: INR 514.92 per share

- 2019-08: INR 511.50 per share

- 2019-09: INR 540.45 per share

- 2019-10: INR 556.64 per share

- 2019-11: INR 582.77 per share

- 2019-12: INR 574.91 per share

- 2020-01: INR 622.90 per share

- 2020-02: INR 585.42 per share

- 2020-03: INR 624.15 per share

- 2020-04: INR 787.26 per share

- 2020-05: INR 814.25 per share

- 2020-06: INR 788.99 per share

- 2020-07: INR 904.21 per share

- 2020-08: INR 852.94 per share

- 2020-09: INR 1,037.56 per share

- 2020-10: INR 977.73 per share

- 2020-11: INR 965.79 per share

- 2020-12: INR 1,041.02 per share

- 2021-01: INR 920.54 per share

- 2021-02: INR 885.31 per share

- 2021-03: INR 903.20 per share

- 2021-04: INR 1,032.62 per share

- 2021-05: INR 1,061.83 per share

- 2021-06: INR 1,084.61 per share

- 2021-07: INR 942.24 per share

- 2021-08: INR 940.81 per share

- 2021-09: INR 976.14 per share

- 2021-10: INR 931.84 per share

- 2021-11: INR 935.17 per share

- 2021-12: INR 981.40 per share

- 2022-01: INR 860.56 per share

- 2022-02: INR 812.68 per share

- 2022-03: INR 859.09 per share

- 2022-04: INR 826.39 per share

- 2022-05: INR 873.93 per share

- 2022-06: INR 878.76 per share

- 2022-07: INR 818.07 per share

- 2022-08: INR 849.01 per share

- 2022-09: INR 867.14 per share

- 2022-10: INR 886.74 per share

- 2022-11: INR 897.43 per share

- 2022-12: INR 847.51 per share

- 2023-01: INR 864.83 per share

- 2023-02: INR 863.32 per share

- 2023-03: INR 924.55 per share

- 2023-04: INR 985.97 per share

- 2023-05: INR 900.21 per share

- 2023-06: INR 1,031.92 per share

- 2023-07: INR 1,128.09 per share

- 2023-08: INR 1,121.57 per share

- 2023-09: INR 1,117.40 per share

- 2023-10: INR 1,073.51 per share

- 2023-11: INR 1,157.63 per share

- 2023-12: INR 1,159.58 per share

- 2024-01: INR 1,224.23 per share

- 2024-02: INR 1,284.85 per share

- 2024-03: INR 1,231.58 per share

- 2024-04: INR 1,240.86 per share

- 2024-05: INR 1,158.37 per share

- 2024-06: INR 1,280.47 per share

- 2024-07: INR 1,350.10 per share

- 2024-08: INR 1,406.27 per share

- 2024-09: INR 1,350.32 per share

- 2024-10: INR 1,274.20 per share

- 2024-11: INR 1,202.30 per share

- 2024-12: INR 1,388.50 per share

- 2025-01: INR 1,217.35 per share

- 2025-02: INR 1,116.50 per share

- 2025-03: INR 1,144.20 per share

- 2025-04: INR 1,183.90 per share

- 2025-05: INR 1,251.20 per share

- 2025-06: INR 1,283.30 per share

- 2025-07: INR 1,270.30 per share

- 2025-08: INR 1,260.10 per share

- 2025-09: INR 1,223.70 per share

- 2025-10: INR 1,197.60 per share

- 2025-11: INR 1,258.80 per share

- 2025-12: INR 1,271.40 per share

- 2026-01: INR 1,218.10 per share

- 2026-02: INR 1,286.30 per share

- 2026-03: INR 1,254.90 per share

- 2026-04: INR 1,322.90 per share

- 2026-05: INR 1,303.50 per share

- 2026-06: INR 1,357.10 per share

- 2026-07: INR 1,148.10 per share

- 2026-08: INR 1,154.40 per share

- 2026-09: INR 1,233.00 per share

- 2026-10: INR 1,218.80 per share

## Annual estimated value (INR per share)

- FY2019: low INR 181.24 per share, central INR 202.01 per share, high INR 228.37 per share

- FY2020: low INR 263.48 per share, central INR 293.68 per share, high INR 331.99 per share

- FY2021: low INR 240.18 per share, central INR 265.38 per share, high INR 297.33 per share

- FY2022: low INR 272.57 per share, central INR 301.08 per share, high INR 337.23 per share

- FY2023: low INR 418.82 per share, central INR 465.13 per share, high INR 523.87 per share

- FY2024: low INR 476.96 per share, central INR 530.03 per share, high INR 597.35 per share

- FY2025: low INR 787.41 per share, central INR 1,085.18 per share, high INR 1,236.86 per share

- FY2026: low INR 729.67 per share, central INR 881.88 per share, high INR 997.13 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:39:09.156Z where newer inputs omit a numeric field or fiscal period.

## Sources

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.