DRREDDY - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.6

💊 Core Financials Deep Dive

Profitability

EPS: ₹68.1 ➜ robust earnings for a pharma giant

PAT: ₹1,410 Cr ➜ stable despite slight dip from previous quarter

Capital Returns

ROE: 18.0% | ROCE: 22.7% ➜ impressive capital efficiency for a large-cap pharma

Debt & Dividend

Debt-to-equity: 0.14 ➜ financially secure, low leverage risk

Dividend Yield: 0.62% ➜ modest, but consistent payout

📌 Insight: Solid financial base with high efficiency — a hallmark of top-tier pharma players.

📊 Valuation Check

Metric Value Interpretation

P/E Ratio 19.2 undervalued relative to industry PE (34.0)

P/B Ratio ~3.23 (₹1,300 / ₹402) ➜ reasonable given brand & IP assets

PEG Ratio 0.50 deep value ➜ earnings growth not fully priced in

📉 Verdict: The stock trades below industry average on key ratios ➜ indicates undervaluation.

⚙️ Business Model & Strategic Edge

Global pharmaceutical major with presence in generics, biosimilars, and OTC products

Strong IP pipeline and USFDA-approved facilities

Competitive Moats

Early-mover in biosimilars and API exports

Established regulatory relationships across major global markets

Efficient supply chain with backward integration

📌 Risks

Pricing pressure from US generics market

Regulatory and compliance volatility

R&D burn rate vs monetization pace

📈 Technical Pulse

RSI: 58.7 ➜ nearing overbought zone

MACD: -2.57 ➜ weak momentum ➜ short-term sideways bias

Price above DMA 50 & 200 ➜ medium-term trend remains positive

✅ Suggested Entry Zone: ₹1,250–₹1,280 🌟 Add gradually on dips near DMA levels or post MACD recovery signal.

🧭 Long-Term Holding Outlook

Ideal for investors aiming for

Exposure to defensives in uncertain markets

Long-term biotech and generics growth cycles

Steady compounding from global market penetration

🔍 Watch for

New drug approvals & clinical trial success

Margin expansion via digital pharma & personalized medicine

Expansion in EMs and licensing deals for biosimilars

Want to stack this up against Cipla or Sun Pharma? We can break it down across innovation pipelines, EBITDA margins, or geographic revenue mix. Just say the word.

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