Dr Reddys Operating Margin vs. Current Valuation

RDY Stock  USD 14.40  0.06  0.41%   
Based on Dr Reddys' profitability indicators, Dr Reddys Laboratories is yielding more profit at this time then in previous quarter. It has a moderate probability of reporting better profitability numbers in January. Profitability indicators assess Dr Reddys' ability to earn profits and add value for shareholders.

Dr Reddys Operating Profit Margin

0.25

At this time, Dr Reddys' Price To Sales Ratio is fairly stable compared to the past year. EV To Sales is likely to rise to 3.96 in 2024, whereas Days Sales Outstanding is likely to drop 79.91 in 2024. At this time, Dr Reddys' Operating Income is fairly stable compared to the past year. Income Before Tax is likely to rise to about 75.5 B in 2024, whereas Accumulated Other Comprehensive Income is likely to drop slightly above 3.8 B in 2024.
Current ValueLast YearChange From Last Year 10 Year Trend
Gross Profit Margin0.430.5861
Way Down
Very volatile
Net Profit Margin0.210.1995
Notably Up
Slightly volatile
Operating Profit Margin0.250.2426
Fairly Up
Pretty Stable
Pretax Profit Margin0.270.2574
Sufficiently Up
Slightly volatile
Return On Assets0.150.1437
Sufficiently Up
Slightly volatile
Return On Equity0.10.1985
Way Down
Pretty Stable
For Dr Reddys profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Dr Reddys to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Dr Reddys Laboratories utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Dr Reddys's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Dr Reddys Laboratories over time as well as its relative position and ranking within its peers.
  
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Is Pharmaceuticals space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Dr Reddys. If investors know RDY will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Dr Reddys listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
(0.15)
Dividend Share
8
Earnings Share
0.78
Revenue Per Share
60.1437
Quarterly Revenue Growth
0.165
The market value of Dr Reddys Laboratories is measured differently than its book value, which is the value of RDY that is recorded on the company's balance sheet. Investors also form their own opinion of Dr Reddys' value that differs from its market value or its book value, called intrinsic value, which is Dr Reddys' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Dr Reddys' market value can be influenced by many factors that don't directly affect Dr Reddys' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Dr Reddys' value and its price as these two are different measures arrived at by different means. Investors typically determine if Dr Reddys is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Dr Reddys' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

Dr Reddys Laboratories Current Valuation vs. Operating Margin Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining Dr Reddys's current stock value. Our valuation model uses many indicators to compare Dr Reddys value to that of its competitors to determine the firm's financial worth.
Dr Reddys Laboratories is rated fifth in operating margin category among its peers. It is currently regarded number one company in current valuation category among its peers reporting about  53,231,999,498  of Current Valuation per Operating Margin. At this time, Dr Reddys' Operating Profit Margin is fairly stable compared to the past year. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Dr Reddys' earnings, one of the primary drivers of an investment's value.

RDY Current Valuation vs. Operating Margin

Operating Margin shows how much operating income a company makes on each dollar of sales. It is one of the profitability indicators which helps analysts to understand whether the firm is successful or not making money from everyday operations.

Dr Reddys

Operating Margin

 = 

Operating Income

Revenue

X

100

 = 
0.23 %
A good Operating Margin is required for a company to be able to pay for its fixed costs or payout its debt, which implies that the higher the margin, the better. This ratio is most effective in evaluating the earning potential of a company over time when comparing it against a firm's competitors.
Enterprise Value is a firm valuation proxy that approximates the current market value of a company. It is typically used to determine the takeover or merger price of a firm. Unlike Market Cap, this measure takes into account the entire liquid asset, outstanding debt, and exotic equity instruments that the company has on its balance sheet. When a takeover occurs, the parent company will have to assume the target company's liabilities but will take possession of all cash and cash equivalents.

Dr Reddys

Enterprise Value

 = 

Market Cap + Debt

-

Cash

 = 
11.98 B
Enterprise Value can be a useful tool to compare companies with different capital structures. Long term liability and current cash or cash equivalents can have a huge impact on market valuation of a given company.

RDY Current Valuation vs Competition

Dr Reddys Laboratories is currently regarded number one company in current valuation category among its peers. After adjusting for long-term liabilities, total market size of Health Care industry is at this time estimated at about 40.99 Billion. Dr Reddys totals roughly 11.98 Billion in current valuation claiming about 29% of equities under Health Care industry.

Dr Reddys Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in Dr Reddys, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Dr Reddys will eventually generate negative long term returns. The profitability progress is the general direction of Dr Reddys' change in net profit over the period of time. It can combine multiple indicators of Dr Reddys, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Last ReportedProjected for Next Year
Accumulated Other Comprehensive IncomeB3.8 B
Operating Income67.7 B71.1 B
Income Before Tax71.9 B75.5 B
Net Income Applicable To Common Shares51.8 B54.4 B
Net Income55.7 B58.5 B
Income Tax Expense16.2 B17 B
Total Other Income Expense Net4.1 B4.3 B
Net Income From Continuing Ops55.7 B58.5 B
Interest Income2.3 B2.2 B
Net Interest Income567 M327 M
Change To Netincome7.6 BB
Net Income Per Share 66.93  57.36 
Income Quality 0.82  0.78 
Net Income Per E B T 0.77  0.99 

RDY Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on Dr Reddys. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Dr Reddys position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Dr Reddys' important profitability drivers and their relationship over time.

Use Dr Reddys in pair-trading

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Dr Reddys position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Dr Reddys will appreciate offsetting losses from the drop in the long position's value.

Dr Reddys Pair Trading

Dr Reddys Laboratories Pair Trading Analysis

The ability to find closely correlated positions to Dr Reddys could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Dr Reddys when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Dr Reddys - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Dr Reddys Laboratories to buy it.
The correlation of Dr Reddys is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Dr Reddys moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Dr Reddys Laboratories moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Dr Reddys can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

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Additional Tools for RDY Stock Analysis

When running Dr Reddys' price analysis, check to measure Dr Reddys' market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Dr Reddys is operating at the current time. Most of Dr Reddys' value examination focuses on studying past and present price action to predict the probability of Dr Reddys' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Dr Reddys' price. Additionally, you may evaluate how the addition of Dr Reddys to your portfolios can decrease your overall portfolio volatility.