Dr. Reddy's Laboratories Limited (DRREDDY.NS) stock analysis

In our weekly check, Dr. Reddy's Laboratories Limited is graded B (A to F). Of 25 checks on debt, profit, cash flow and trend: 16 pass, warnings: 8, red flags: 1.

About Dr. Reddy's Laboratories Limited

Dr. Reddy's Laboratories Limited is a Healthcare company (Drug Manufacturers - Specialty & Generic) based in India, listed on NSE as DRREDDY.NS.

What our checks show for DRREDDY.NS

Red flags

• The gross margin fell by 3.6 points, to 49.5%: costs are rising faster than prices.

Warning signs

• The net margin fell by 2.5 points over 5 years, to 8.5%: the company keeps less of each sale as profit.
• Earnings per share fell 14.7% a year over the last 3 years.
• Net profit fell 14.7% a year over the last 3 years.
• The net margin is only 8.5%: little room if costs rise.
• Free cash flow is only 3.5% of revenue.
• The stock has fallen as much as 56% from a peak. Would you have held through that?
• Recovering from its deepest fall took about 2.1 years.
• Return on capital (ROCE) is only 7.1%.

Strengths

• Net debt is only 1x a year of EBITDA: the balance sheet has room.
• Analysts expect earnings per share to grow about 36.1% a year over the next years.
• Analysts expect the net margin to improve by 5.5 points from today's 8.5%.
• The dividend takes 24% of profit: there is a cushion.
• A large company: market value $11.85 billion.
• Beta 0.24: the stock usually moves less than the market.

Next earnings report: 2027-01-22

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Questions

What grade does Dr. Reddy's Laboratories Limited (DRREDDY.NS) have?

In our weekly check, Dr. Reddy's Laboratories Limited is graded B (A to F). Of 25 checks on debt, profit, cash flow and trend: 16 pass, warnings: 8, red flags: 1. The grade is a risk check, not a buy or sell recommendation.

What are the main risks of DRREDDY.NS stock?

This week's biggest flags for Dr. Reddy's Laboratories Limited: Gross margin falling, Margins falling, Weak EPS growth. In total 9 of 25 checks show a warning or a red flag.

What does Dr. Reddy's Laboratories Limited do?

Dr. Reddy's Laboratories Limited is a Healthcare company (Drug Manufacturers - Specialty & Generic) based in India, listed on NSE as DRREDDY.NS.

When does Dr. Reddy's Laboratories Limited report earnings next?

The next earnings report is expected on 2027-01-22. We re-run the checks every week, so the grade can change after it.

The grade is a risk check, not a price forecast, and not investment advice. In our 10-year test (S&P 500, 2016-2026), stocks we graded A or B fell more than 30% 2-3 times less often than D or F, without a lower average return.

Updated 2026-10-31

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