pharma
Dr. Reddy's Laboratories
DRREDDY · Nifty 50
₹1,269
Price 2026-06-17
At a Glance
Fundamental
90/100
STRONG
Trust
95/100
Verification
Coverage
89/100
HIGH
Quick Take
Dr. Reddy's Laboratories scores 90/100 on fundamentals (strong). Dr. Reddy's Laboratories: PE above historical average. BROAD EXPANSION regime.
Fundamental Score: 90/100 · STRONG · 1 signals detected
DuPont Analysis
ROE 11.4% broken into three drivers. Each shows how efficiently the company generates returns.
ROE of 11.37% is moderate margin-driven and stable. Net margin of 12.8% × asset turnover of 0.58x × leverage of 1.5x.
What This Means
Net margin of 12.8% means the company keeps ₹12.8 as profit for every ₹100 of revenue. This is a healthy margin. Asset turnover of 0.58x means the company efficiently uses its assets to generate revenue. Leverage of 1.5x means the company uses moderate debt. Returns are primarily driven by operations, not borrowing.
Margin Structure
Gross
55.5%
Operating
17.4%
Net
12.8%
Gross margin 55.5% → operating margin 17.4% → net margin 12.8%. Margins are DECLINING. Check if input costs are rising or competition is pressuring pricing.
Financial Health
Earnings Quality
ADEQUATECash flow covers net income 1.3x — earnings are ADEQUATE quality. Cash conversion is reasonable.
Debt Sustainability
COMFORTABLEInterest covered 15.7x — very comfortable. Debt service is not a concern. Debt/EBITDA at 1.0x is low — balance sheet has capacity.
Free Cash Flow
STRONGFCF margin at 5.5% — moderate. Generating cash after investments.
Peer Comparison
Dr. Reddy's Laboratories is compared against 10 peers in the pharma sector.
Key Watchpoints
Breaks above ₹1332 (+5%)
Trend reversal confirmation
Breaks below ₹1206 (-5%)
Further downside risk
PE reverts to 5Y median of 23.4
Valuation normalization
Pharma sector entering leadership
Sector rotation signal
Detected Patterns
Risk Flags
Liquidity squeeze. Company may struggle to meet short-term obligations without refinancing.
High refinancing risk. Company needs to roll over debt frequently. Vulnerable to credit market freezes.
⚠️ 1 critical + 1 warning flags. Exercise caution.
Data Quality
News Correlation
50 articles scanned for fundamental themes