Cyclical: bought at the gRevlimid cliff
Dr. Reddy’s Laboratories is a multinational pharmaceutical company that manufactures and markets a wide range of pharmaceutical products and services. Through its businesses - Pharmaceutical Services and Active Ingredients, Global Generics and Proprietary Products - the Company offers a portfolio of products and services, including Active Pharmaceutical Ingredients (APIs), Custom Pharmaceutical Services (CPS), generics, biosimilars and differentiated formulations. The company offers a portfolio of products and services including APIs, generics, branded generics, biosimilars and OTC. Its major therapeutic areas of focus are gastrointestinal, cardiovascular, diabetology, oncology, pain management and dermatology. Its major markets include – USA, India, Russia & CIS countries, China, Brazil and Europe.
Dr. Reddy's Laboratories Limited, together with its subsidiaries, operates as an integrated pharmaceutical company North America, Europe, India, Russia, and internationally. The company operates through Global Generics, Pharmaceutical Services and Active Ingredients (PSAI), and Others segment. Its Global Generics segment manufactures and markets prescription and over-the-counter finished pharmaceutical products that are marketed under a brand name or as a generic finished dosages with therapeutic equivalence to branded formulations, as well as engages in the biologics business. The PSAI segment manufactures and markets active pharmaceutical ingredients and intermediates, which are principal ingredients for finished pharmaceutical products. This segment also provides contract research services; and manufactures and sells active pharmaceutical ingredients and steroids with the customer requirements. Its Others segment engages in developing therapies in the fields of oncology and inflammation; and research, development, and commercialization of differentiated formulations. The company offers its products for various therapeutic categories, including gastro-intestinal, cardiovascular, anti-diabetic, dermatology, oncology, respiratory, stomatology, urology, and nephrology, vaccines, vitamins and minerals, and pain management. Dr. Reddy's Laboratories Limited was incorporated in 1984 and is headquartered in Hyderabad, India.
Key people: Mr. Gunupati Venkateswara Prasad B.E. (Co-Chairman, MD & Member of Management Council) · Mr. Kallam Satish Reddy B.Tech., M.S. (Chairman of the Board & Member of the Management Council) · Mr. Erez Israeli M.B.A. (CEO & Member of the Management Council) · Mr. Mannam Venkatanarasimham (CFO & Member of the Management Council) · Mr. Krishna K. Venkatesh B.Pharma M.S. (Global Head of IPDO, Integrated Product Development & Member of the Management Council) · Mr. Deepak Sapra M.B.A. (CEO API and Services & Member of Management Council)
Dr. Reddy's Labs. major competitors are Mankind Pharma, Aurobindo Pharma, Lupin, Cipla, Zydus Lifesciences, Glenmark Pharma., Alkem Laboratories. Market Cap of Dr. Reddy's Labs. is ₹1,01,581 Crs. While the median market cap of its peers are ₹98,119 Crs.
Dr. Reddy's Labs. seems to be less financially stable compared to its competitors.Altman Z score of Dr. Reddy's Labs. is 5.29 and is ranked 6 out of its 8 competitors.
Yahoo profile 23 Sept 2026 · Tijori 23 Sept 2026
Latest reported mix as compiled by Tijori from company disclosures; percentages of revenue.
As the company reports them. They can differ from the ratio table on the Financials tab, which uses Tijori's own definitions (for example NIM on average total assets rather than on interest-earning assets); the Cross-check panel there lines both up.
Dr. Reddy's is a top-3 Indian pharma company (FY26 revenue Rs 33,700 cr) with generics in North America (USD 236 mn in Q1FY27, 27% of sales), Europe incl. the Haleon NRT (nicotine replacement) business, India (Rs 1,718 cr, +17%), Emerging Markets led by Russia (Rs 903 cr, ~49% of EM), PSAI (APIs) and a biosimilars pipeline (abatacept BLA pending). It was first-to-market with generic semaglutide in Canada (Jan-2026) and launched oral semaglutide in India, but is in a FY27 earnings trough as gRevlimid (lenalidomide) profits roll off.
TTM PE 29.6x is inflated by trough earnings (Q4FY26 PAT Rs 221 cr, Q1FY27 Rs 443 cr); on FY28E it is ~21x vs Axis' 20x target multiple. 5-yr average PE not sourced. EV/EBITDA computed on mcap less Rs 3,058 cr net cash over FY26 EBITDA. EV/EBITDA 14.3x; dividend yield 0.7%.
| Sun Pharma | Sun is priced for its specialty franchise (innovative medicines 21.9% of sales) while DRL trades at ~21x depressed FY28E earnings; DRL is the higher-beta recovery play on semaglutide and margin normalisation, held small (0.7%) as a cyclical. |
| Cipla | Cipla faces the same gRevlimid cliff (brokers modelled ~31% PAT decline in Q1FY27) without DRL's Canada semaglutide first-mover position, Russia/NRT diversification or Rs 3,058 cr net cash. |
Share of revenue as disclosed in filings (Tijori normalisation). Segment profit measure: not disclosed in this source — segment EBIT/EBITDA/PBT are not shown rather than estimated. Eliminations and unallocated costs not available here.
Share of revenue as disclosed in filings (Tijori normalisation). Segment profit measure: not disclosed in this source — segment EBIT/EBITDA/PBT are not shown rather than estimated. Eliminations and unallocated costs not available here.
Share of revenue as disclosed in filings (Tijori normalisation). Segment profit measure: not disclosed in this source — segment EBIT/EBITDA/PBT are not shown rather than estimated. Eliminations and unallocated costs not available here.
Share of revenue as disclosed in filings (Tijori normalisation). Segment profit measure: not disclosed in this source — segment EBIT/EBITDA/PBT are not shown rather than estimated. Eliminations and unallocated costs not available here.
Share of revenue as disclosed in filings (Tijori normalisation). Segment profit measure: not disclosed in this source — segment EBIT/EBITDA/PBT are not shown rather than estimated. Eliminations and unallocated costs not available here.
Share of revenue as disclosed in filings (Tijori normalisation). Segment profit measure: not disclosed in this source — segment EBIT/EBITDA/PBT are not shown rather than estimated. Eliminations and unallocated costs not available here.
Share of revenue as disclosed in filings (Tijori normalisation). Segment profit measure: not disclosed in this source — segment EBIT/EBITDA/PBT are not shown rather than estimated. Eliminations and unallocated costs not available here.
Healthcare — 6.9%: every headwind of 2016–17 has reversed
Indian pharma's great de-rating had four causes: US pharmacy-benefit managers merged and seized pricing power over generics; the patent cliff migrated from simple to complex molecules faster than Indian companies adapted; GDUFA fees and unannounced FDA inspections produced a wave of 483s and import alerts; and non-Indian generic players took ANDA share. We wrote publicly in 2023 that the winds were changing, and every one of those forces has now inverted. Indian companies have become genuinely good at complex chemistry, peptides and biosimilars, against a patent cliff in complex molecules worth roughly $350 bn ($142 bn of annual innovator sales lose exclusivity by 2030, more than 60% biologics). The FDA has lost about 20% of its staff. The PBM combinations are tied up in litigation. And the GLP-1 wave is real: the semaglutide patent expired in India in March 2026 and Glenmark, Dr Reddy's, Sun and Zydus launched at 50–70% discounts on day one. We like the space across the board — formulations, CDMO/CRO platforms and the GLP-1 supply chain — but we remain valuation-disciplined. Hospitals are excellent businesses that we respect and do not own at 60–80x. The sector thesis is expressed through different archetypes: a Turnaround (Glenmark), two Value names (Aurobindo, Granules), a Cyclical (Dr Reddy's at the lenalidomide trough) and a Core retailer (MedPlus). The domestic market itself is growing 10–12% in value with chronic therapies leading.
Sun Pharma is the quality leader but at 35x+ already prices its specialty franchise and is the most exposed to the lenalidomide cliff; Cipla faces a Goa-plant remediation and a respiratory pipeline dependency; Lupin has re-rated to Sun-like multiples on a handful of US launches; Zydus is the closest competitor to our GLP-1 thesis but priced for it. We own no hospital (Apollo, Max, Fortis at 60–80x EBITDA-normalised P/E) and no CDMO at 70x+ (Divi's, Syngene) — the sector can be attractive while individual valuations still matter. Apollo Pharmacy is buried inside a hospital valuation; MedPlus is the pure play.
| Anti - Diabetes - Market Share | 2.04 % | as of Jul 22 |
| Anti-Infectives - Market Share | 1.39 % | as of Jul 22 |
| Antineo Plastic - Market Share | 6.51 % | as of Nov 21 |
| Blood Related - Market Share | 2.62 % | as of Nov 21 |
| Cardiovascular - Market Share | 2.39 % | as of Jul 22 |
| Dermatology - Market Share | 5.05 % | as of Nov 21 |
| Endocrinology - Market Share | 0.01 % | as of Oct 21 |
| Gastro-Intestinal - Market Share | 4.35 % | as of Jul 22 |