RDY PE Ratio & Valuation,Is RDY Overvalued

RDY Relative Valuation

RDY's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average, adjusted by weights. If the market price exceeds this fair value range, RDY is overvalued; if below, it's undervalued.

Historical Valuation

Dr Reddy's Laboratories Ltd (RDY) is now in the Fair zone, suggesting that its current forward PE ratio of 21.12 is considered Fairly compared with the five-year average of 20.40. The fair price of Dr Reddy's Laboratories Ltd (RDY) is between 13.05 to 17.44 according to relative valuation methord.

Relative Value

Fair Zone

13.05-17.44

Current Price：14.04

Fair

21.67

13.33

EV/EBITDA

Dr Reddy's Laboratories Ltd. (RDY) has a current EV/EBITDA of 13.33. The 5-year average EV/EBITDA is 12.50. The thresholds are as follows: Strongly Undervalued below 7.96, Undervalued between 7.96 and 10.23, Fairly Valued between 14.77 and 10.23, Overvalued between 14.77 and 17.05, and Strongly Overvalued above 17.05. The current Forward EV/EBITDA of 13.33 falls within the Historic Trend Line -Fairly Valued range.

17.71

EV/EBIT

Dr Reddy's Laboratories Ltd. (RDY) has a current EV/EBIT of 17.71. The 5-year average EV/EBIT is 15.83. The thresholds are as follows: Strongly Undervalued below 8.82, Undervalued between 8.82 and 12.32, Fairly Valued between 19.34 and 12.32, Overvalued between 19.34 and 22.85, and Strongly Overvalued above 22.85. The current Forward EV/EBIT of 17.71 falls within the Historic Trend Line -Fairly Valued range.

3.08

Dr Reddy's Laboratories Ltd. (RDY) has a current PS of 3.08. The 5-year average PS is 3.21. The thresholds are as follows: Strongly Undervalued below 2.47, Undervalued between 2.47 and 2.84, Fairly Valued between 3.58 and 2.84, Overvalued between 3.58 and 3.95, and Strongly Overvalued above 3.95. The current Forward PS of 3.08 falls within the Historic Trend Line -Fairly Valued range.

16.99

P/OCF

Dr Reddy's Laboratories Ltd. (RDY) has a current P/OCF of 16.99. The 5-year average P/OCF is 18.11. The thresholds are as follows: Strongly Undervalued below 10.78, Undervalued between 10.78 and 14.45, Fairly Valued between 21.77 and 14.45, Overvalued between 21.77 and 25.44, and Strongly Overvalued above 25.44. The current Forward P/OCF of 16.99 falls within the Historic Trend Line -Fairly Valued range.

24.20

P/FCF

Dr Reddy's Laboratories Ltd. (RDY) has a current P/FCF of 24.20. The 5-year average P/FCF is 27.19. The thresholds are as follows: Strongly Undervalued below 14.04, Undervalued between 14.04 and 20.62, Fairly Valued between 33.77 and 20.62, Overvalued between 33.77 and 40.34, and Strongly Overvalued above 40.34. The current Forward P/FCF of 24.20 falls within the Historic Trend Line -Fairly Valued range.

Dr Reddy's Laboratories Ltd (RDY) has a current Price-to-Book (P/B) ratio of 2.97. Compared to its 3-year average P/B ratio of 3.51 , the current P/B ratio is approximately -15.45% higher. Relative to its 5-year average P/B ratio of 3.77, the current P/B ratio is about -21.17% higher. Dr Reddy's Laboratories Ltd (RDY) has a Forward Free Cash Flow (FCF) yield of approximately 2.99%. Compared to its 3-year average FCF yield of 3.45%, the current FCF yield is approximately -13.37% lower. Relative to its 5-year average FCF yield of 3.00% , the current FCF yield is about -0.16% lower.

2.97

P/B

Median3y

3.51

Median5y

3.77

2.99

FCF Yield

Median3y

3.45

Median5y

3.00

Competitors Valuation Multiple

The average P/S ratio for RDY's competitors is 3.78, providing a benchmark for relative valuation. Dr Reddy's Laboratories Ltd Corp (RDY) exhibits a P/S ratio of 3.08, which is -18.51% above the industry average. Given its robust revenue growth of 5.41%, this premium appears unsustainable.

P/S

P/E

EV/EBITDA

EV/EBIT

Revenue Growth

Market Cap

Performance Decomposition

Market capitalization of RDY decreased by 10.77% over the past 1 year. The primary factor behind the change was an increase in Revenue Growth from 957.19M to 1.01B.

The secondary factor is the Margin Expansion, contributed -3.17%to the performance.

Overall, the performance of RDY in the past 1 year is driven by Revenue Growth. Which is more sustainable.

5.41%

957.19M → 1.01B

Revenue Growth

-3.17%

16.73 → 16.20

Margin Expansion

-13.01%

20.93 → 18.21

P/E Change

-10.77%

15.79 → 14.09

Mkt Cap Growth

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Frequently Asked Questions

Is Dr Reddy's Laboratories Ltd (RDY) currently overvalued or undervalued?

What is Dr Reddy's Laboratories Ltd (RDY) fair value?

RDY's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average , adjusted by weights. The fair price of Dr Reddy's Laboratories Ltd (RDY) is between 13.05 to 17.44 according to relative valuation methord.

How does RDY's valuation metrics compare to the industry average?

What is the current P/B ratio for Dr Reddy's Laboratories Ltd (RDY) as of Dec 16 2025?

As of Dec 16 2025, Dr Reddy's Laboratories Ltd (RDY) has a P/B ratio of 2.97. This indicates that the market values RDY at 2.97 times its book value.

What is the current FCF Yield for Dr Reddy's Laboratories Ltd (RDY) as of Dec 16 2025?

As of Dec 16 2025, Dr Reddy's Laboratories Ltd (RDY) has a FCF Yield of 2.99%. This means that for every dollar of Dr Reddy's Laboratories Ltd’s market capitalization, the company generates 2.99 cents in free cash flow.

What is the current Forward P/E ratio for Dr Reddy's Laboratories Ltd (RDY) as of Dec 16 2025?

As of Dec 16 2025, Dr Reddy's Laboratories Ltd (RDY) has a Forward P/E ratio of 21.12. This means the market is willing to pay $21.12 for every dollar of Dr Reddy's Laboratories Ltd’s expected earnings over the next 12 months.

What is the current Forward P/S ratio for Dr Reddy's Laboratories Ltd (RDY) as of Dec 16 2025?

As of Dec 16 2025, Dr Reddy's Laboratories Ltd (RDY) has a Forward P/S ratio of 3.08. This means the market is valuing RDY at $3.08 for every dollar of expected revenue over the next 12 months.

RDY Valuation