⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
DRREDDY - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.1
| Stock Code | DRREDDY | Market Cap | 1,07,478 Cr. | Current Price | 1,287 ₹ | High / Low | 1,380 ₹ |
| Stock P/E | 23.2 | Book Value | 378 ₹ | Dividend Yield | 0.62 % | ROCE | 25.8 % |
| ROE | 20.3 % | Face Value | 1.00 ₹ | DMA 50 | 1,273 ₹ | DMA 200 | 1,256 ₹ |
| Chg in FII Hold | -2.35 % | Chg in DII Hold | 2.45 % | PAT Qtr | 90.6 Cr. | PAT Prev Qtr | 387 Cr. |
| RSI | 52.6 | MACD | 9.30 | Volume | 8,63,104 | Avg Vol 1Wk | 13,76,252 |
| Low price | 1,020 ₹ | High price | 1,380 ₹ | PEG Ratio | 0.47 | Debt to equity | 0.13 |
| 52w Index | 74.2 % | Qtr Profit Var | -89.3 % | EPS | 55.6 ₹ | Industry PE | 27.6 |
📊 Core Financials
- Revenue Growth: PAT declined sharply (₹90.6 Cr vs ₹387 Cr), showing earnings pressure
- Profit Margins: EPS ₹55.6, strong profitability despite volatility
- Debt Ratio: Low leverage (Debt-to-Equity 0.13)
- Cash Flows: Stable, supported by diversified pharma operations
- Return Metrics: ROCE 25.8%, ROE 20.3% — excellent efficiency
💹 Valuation Indicators
- P/E Ratio: 23.2 (below industry PE of 27.6, fairly valued)
- P/B Ratio: ~3.4 (reasonable valuation)
- PEG Ratio: 0.47 (growth priced attractively)
- Intrinsic Value: Current price ₹1,287 is near support (₹1,020), offering favorable entry
🏢 Business Model & Competitive Advantage
- Global pharmaceutical company with strong presence in generics and APIs
- Diversified product portfolio across therapeutic areas
- Low debt enhances financial resilience
- Dividend yield of 0.62% adds shareholder value
📈 Entry Zone & Long-Term Guidance
- Entry Zone: ₹1,250–₹1,300 range (near support levels)
- Long-Term Holding: Attractive due to strong ROE/ROCE and fair valuation
- Risk: Sharp quarterly PAT decline may limit short-term upside
✅ Positive
- Strong ROE and ROCE metrics indicate efficient capital use
- Low debt ensures financial stability
- DII holdings increased (+2.45%), showing strong domestic investor support
⚠️ Limitation
- Quarterly PAT dropped significantly (-89.3%)
- Stock trading close to resistance levels, limiting near-term upside
- FII holdings decreased (-2.35%), showing reduced foreign investor confidence
📰 Company Negative News
- PAT dropped from ₹387 Cr to ₹90.6 Cr, showing earnings volatility
- Decline in FII holdings indicates reduced foreign investor interest
🌟 Company Positive News
- DII holdings increased (+2.45%), showing strong domestic investor confidence
- EPS of ₹55.6 supports valuation strength
🏦 Industry
- Pharmaceutical sector with strong global demand
- Industry PE at 27.6, DRREDDY trades slightly below this, showing fair valuation
- Sector growth supported by healthcare demand and exports
🔎 Conclusion
- DRREDDY is financially strong with excellent ROE/ROCE and low debt
- Valuation is fair compared to industry peers
- Entry near ₹1,250–₹1,300 is favorable for long-term investors
- Best suited for portfolios seeking pharma exposure with moderate risk tolerance