DRREDDY - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 05 Nov 25, 7:43 am

Fundamental Rating: 4.0

📈 Positive

• 📊 Strong return metrics — ROCE at 25.8% and ROE at 20.3% reflect excellent capital efficiency.
• 💰 Low debt-to-equity ratio of 0.13 ensures financial stability and conservative leverage.
• 📈 EPS of ₹64.7 supports robust earnings visibility and valuation strength.
• 📈 P/E of 18.7 is attractive compared to industry average of 33.1, indicating relative undervaluation.
• 📈 DII holding increased by 1.26%, showing rising domestic institutional confidence.

⚠️ Limitation

• 📉 Quarterly PAT dropped from ₹2,961 Cr. to ₹387 Cr., indicating a sharp earnings decline.
• 📉 PEG ratio of 0.38 suggests limited growth relative to valuation.
• 📉 MACD at -3.54 and RSI at 34.6 reflect weak technical momentum.
• 📉 Trading below DMA50 and DMA200 (₹1,264 and ₹1,254), confirming short-term bearish trend.

📰 Company Negative News

• 📉 FII holding declined by 0.64%, indicating reduced foreign investor interest.
• 📉 Quarterly profit variation of -79.4% reflects earnings volatility or one-off adjustments.

🌟 Company Positive News

• 📈 Volume more than double 1-week average suggests heightened investor activity and potential accumulation.
• 📈 Trading near 52-week low (₹1,020), offering a potential value entry point.

💊 Industry

• 💊 DRREDDY operates in the pharmaceutical sector, with a strong global presence in generics, APIs, and biosimilars.
• 📊 Industry P/E of 33.1 reflects moderate growth expectations and regulatory exposure.

🧭 Conclusion

• 📌 Suggested entry zone: ₹1,150–₹1,190, near support and below DMA levels for better margin of safety.
• 🕰️ Long-term holding favorable due to strong fundamentals, global footprint, and attractive valuation.
• ⚖️ Monitor earnings recovery and technical indicators before aggressive accumulation.