RDYDr. Reddy's Laboratories Limited
Is the business good?
The checks split: mostly cash-backed earnings (0.9×) and margins steady.
Operating profit is mostly backed by cash.
Positive operating leverage, operating profit is growing faster than sales, so margins widen as the business scales.
Margin-driven, fat margins on slower asset turns. ROE 17% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is RDY?
Dr. Reddy's Laboratories Limited earns 15% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 6.5 points above what the capital costs: growth creates value
- Operating margin
- 22%
Operating margin · Drug Manufacturers - Specialty & Generic median 11% · fiscal year to FY2025
- Cash conversion
- 0.87×
Cash conversion · 0.87× a year ago · most of the operating profit arrived as cash, working capital took the rest
- Share count, year on year
- +0.08%
Share count, year on year · flat: no meaningful dilution
| Year | Operating margin |
|---|---|
| FY2020 | 9.2% |
| FY2021 | 13% |
| FY2022 | 14% |
| FY2023 | 23% |
| FY2024 | 24% |
| FY2025 | 22% |
Details›
- Gross marginfiscal year to FY2025
- 59%
- Operating marginfiscal year to FY2025
- 22%
- Net marginfiscal year to FY2025
- 17%
- Free cash flow margin
- 5.8%
- R&D as % of revenue
- 8.4%
- Revenue, trailing twelve months
- $325.5B
- Free cash flow, trailing twelve months
- $18.9B
- Net income, trailing twelve months
- $56.5B
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 15%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Drug Manufacturers, Specialty & Generic
Ranks #3 of 41 by RyuScore