Stock fact sheet · data as of
Dr. Reddy's Laboratories Limited (RDY): fair value, margin of safety and Wheel Score
Ticker symbol RDY · Healthcare · Drug Manufacturers - Specialty & Generic · India · ADR · Growth
RDY is an American depositary share (ADR): the US listing of Dr. Reddy's Laboratories Limited, whose own shares trade on its home exchange. It trades in dollars during US hours; currency moves and the home country's rules also affect it, and the depositary bank charges a small yearly fee.
Is RDY undervalued?
Dr. Reddy's Laboratories Limited (RDY) closed at 14.77 on 5 Nov 2026, 84% above the GLS average fair value of 8.03. 8 of the 9 models that produced a number value the shares below the current price. A gap this wide usually means the market is paying for growth or a story the trailing numbers do not show yet; the models work from filed results, not forecasts, so they are conservative by design.
There is a wide gap between DDM (1.25) and Graham Growth (20.87). When the models are this far apart the "fair value" is really a range, and the margin of safety above should be read with that range in mind.
Ranked against every other company we cover, RDY is clearly faster-growing than it is cheap, so the nightly engine files it under Growth (value score 17, growth score 54, out of 100).
Nine valuation models for RDY
Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.
| Model | Value | vs price | What it measures |
|---|---|---|---|
| DCF | 14.13 | -4% | Present value of the projected free cash flows, discounted at the cost of capital |
| Graham Number | 6.21 | -58% | The most a defensive investor pays for the earnings and book value per share |
| Graham Growth | 20.87 | +41% | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields |
| Lynch | 9.12 | -38% | EPS × the earnings growth rate (PEG of 1), growth capped at 25% |
| GLS Growth | 6.36 | -57% | EPS compounded ten years at the blended growth rate, discounted back at 15% a year |
| 10 Cap | 6.28 | -57% | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10% |
| Payback Time | 3.98 | -73% | Eight years of compounded free cash flow: the price at which the business pays for itself |
| DDM | 1.25 | -92% | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend |
| EPV | 4.05 | -73% | Earnings power value: current EPS capitalised at 9% with no growth |
| Zombie (liquidation) | 1.28 | -91% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 14.35 | -3% | Analysts' average 12-month price target. Not in the average |
Quality and financial health
Dr. Reddy's Laboratories Limited scores 5 of 9 on the Piotroski F-score: a middling result that falls one point short of the "Piotroski 6 or more" Wheel Trade Filter. Some of the nine tests on profitability, leverage and efficiency are failed, so the accounts are worth a look before selling a put on the name. A GLS Moat score of 7.6/10 puts RDY among the more durable businesses we track: over up to ten years its returns on capital have stayed high, its margins steady and its balance sheet sound.
Returns on capital are moderate - ROIC 10.1%, ROE 12.2%, ROA 7.9% - with debt at 0.21 times equity and a free-cash-flow yield of 1.0%.
The dividend yield is 0.57% with a payout ratio of 24% - a small yield that leaves most of the earnings in the business.
Institutional ownership scores 2/10, insider activity 5/10 and Congressional trading 5/10 on the GLS smart-money scales.
| Piotroski F-score | 5 / 9 | ROIC | 10.1% |
|---|---|---|---|
| GLS Moat | 7.6 / 10 | ROE | 12.2% |
| Debt / equity | 0.21 | ROA | 7.9% |
| Free-cash-flow yield | 1.0% | Payout ratio | 24% |
| Institutions | 2 / 10 | Insiders · Congress | 5 · 5 / 10 |
Wheel Score 34: Weak
With a Wheel Score of 34 Dr. Reddy's Laboratories Limited sits in the Weak band. It fails filter 3, below fair value - trades 84% above our fair value; and filter 4, financially healthy - Piotroski 5/9 (under 6); and filter 6, no serious red flags - Red Flags score 57 (under 60); Value (weak) is its weakest part.
Implied volatility is 64% on the near-the-money contracts 20-60 days out - above the 60% top of the sweet spot. It still passes the 25-80% filter, but the Wheel Score rewards it less because volatility this high usually comes with a reason. Chain open interest is thin - 1,834 contracts across every expiry - so fills at a fair price are not guaranteed; a 30-45-day put may not exist at a usable strike.
Volume runs at 2.1M shares a day on a market cap of $12.3B, with a beta of 0.25 - a low beta, so day-to-day moves are smaller than the market's; the Stability part of the Wheel Score rates that good.
| Filter | Wheel Trade Filter | Result | Detail |
|---|---|---|---|
| 1 | Options that actually trade | Passes | Listed options with 1,000+ contracts of open interest and 100+ traded a day |
| 2 | A real business, not a gamble | Passes | Profitable over the last twelve months - not a speculative stock, fund or note |
| 3 | Below fair value | Fails | trades 84% above our fair value |
| 4 | Financially healthy | Fails | Piotroski 5/9 (under 6) |
| 5 | Can repay its debt | Passes | Long-term debt repaid from 3 years of operating cash flow or less (6 for real estate and utilities; banks and insurers are not judged on it) |
| 6 | No serious red flags | Fails | Red Flags score 57 (under 60) |
| 7 | A premium worth selling | Passes | Implied volatility 25-80% (enough premium, not a lottery ticket) |
| 8 | Big enough | Passes | Market cap $1 billion or more |
| 9 | Not a penny stock | Passes | Share price $5 or more |
| How it ranks | Rating | From | |
|---|---|---|---|
| Value | Weak | 84% above fair value | |
| Premium | Strong | implied volatility 64% | |
| Moat | Good | moat 7.6/10 | |
| Health | Fair | Piotroski 5/9 | |
| Red Flags | Weak | Red Flags score 57/100 | |
| Option trading | Weak | 1,476 contracts a day, 1,834 open interest | |
| Stability | Good | beta 0.25, $12.3B company |
The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls: a stock must pass all 9 Wheel Trade Filters to score 70, and the score then ranks the ones that pass; the Sunday Scan is the top 10. It is updated nightly and is not a recommendation. How the Wheel Score works · the walkthrough lesson shows how it fits into a trade, start to finish.
Upcoming events
The next earnings report is due on 22 Jan 2027, 78 days away - outside the window of a 30-45-day put sold today.
Analysts upgraded RDY 2 times in the last 30 days with no downgrades; the latest action was an upgrade by Jefferies on 25 Oct 2026.
Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.
Similar stocks in Drug Manufacturers - Specialty & Generic
The 12 companies below are the closest to Dr. Reddy's Laboratories Limited by market cap within the Drug Manufacturers - Specialty & Generic industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.
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|---|---|---|---|---|---|
| ELAN Elanco Animal Health Incorporated | 25.31 | 11.44 | -121% | 36Weak | $12.6B |
| ALKS Alkermes plc | 45.89 | 35.37 | -30% | 33Weak | $7.7B |
| AMRX Amneal Pharmaceuticals, Inc. | 19.95 | 10.56 | -89% | 35Weak | $6.9B |
| VTRS Viatris Inc. | 19.22 | 19.02 | -1% | 39Weak | $22.1B |
| LNTH Lantheus Holdings, Inc. | 101.14 | 191.29 | +47% | 39Weak | $6.6B |
| ZTS Zoetis Inc. | 89.17 | 95.57 | +7% | 50Fair | $36.8B |
| HLN Haleon plc | 9.23 | 7.95 | -16% | 42Weak | $40.6B |
| BHC Bausch Health Companies Inc. | 8.34 | 145.40 | +94% | 53Fair | $3.1B |
| TEVA Teva Pharmaceutical Industries Limited | 41.85 | 14.70 | -185% | 40Weak | $48.8B |
| RGC Regencell Bioscience Holdings Limited | 5.42 | 0.0281 | -19191% | 8Weak | $2.7B |
| HCM HUTCHMED (China) Limited | 13.92 | 2.86 | -386% | 31Weak | $2.4B |
| TAK Takeda Pharmaceutical Company Limited | 21.06 | 19.34 | -9% | 37Weak | $67.3B |
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A free GLS Equity account gets you nightly fair value and the Wheel Score on ~7,400 US stocks, a watchlist, the scanner preview and the Sunday Scan - the top 10 stocks that pass all 9 Wheel Trade Filters, emailed every week. Pro adds the full put and call scanners, unlimited watchlists with alerts and the trade journal.
Start free See the Sunday ScanQuestions about RDY
Is RDY undervalued right now?
No: at 14.77 the stock trades 84% above the GLS average fair value of 8.03 (data as of 5 Nov 2026), well beyond what trailing earnings, cash flow and book value support.
What is the Wheel Score of RDY and what does it mean?
RDY scores 34 out of 100 (Weak) - it fails Wheel Trade Filters 3, 4, 6. The Wheel Score ranks stocks for the wheel strategy - selling cash-secured puts, then covered calls if assigned - in two parts: the 9 pass/fail Wheel Trade Filters (busy options, a real business, below fair value, Piotroski 6 or more, debt it can repay, a Red Flags score of 60 or more, implied volatility of 25-80%, a $1 billion company, $5 a share) and a ranking of how strongly a stock passes on value, premium, moat, health, red flags, option trading and stability. A stock that fails any filter stays under 70; 70-84 is Good, 85 and above is Prime. The Sunday Scan is the top 10 that pass, sorted by Wheel Score.
What is the GLS fair value for RDY?
8.03 per share as of 5 Nov 2026 - the simple average of the 9 valuation models (out of nine: DCF, Graham Number, Graham Growth, Lynch, GLS Growth, 10 Cap, Payback Time, DDM and EPV) that produced a positive value. The models run every night on the latest filings; the Quote page lets you switch any of them off and add a margin of safety of your own.
When does Dr. Reddy's Laboratories Limited report earnings next?
The next earnings report is due on 22 Jan 2027, 78 days from the data date of 5 Nov 2026. The Calendars page lists every upcoming report with its time of day.
Does RDY have listed options, and how liquid are they?
Yes. The nightly snapshot found 20 listed contracts with 1,834 open interest across all expiries and implied volatility of 64% on the near-the-money contracts. The Options scanner lists the cash-secured put and covered call set-ups with premium and annualised yield worked out.
Is RDY an ADR?
Yes. RDY is an American depositary share (ADR): the US listing of Dr. Reddy's Laboratories Limited, whose own shares trade on its home exchange. It trades in dollars during US hours; currency moves and the home country's rules also affect it, and the depositary bank charges a small yearly fee.