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Is this Large Market Cap Stock target price reasonable for Dr. Reddy’s Laboratories Ltd. (NYSE:RDY)?

The company in question is, Dr. Reddy’s Laboratories Ltd. (NYSE:RDY) currently with a stock price of 45.28 (-1.18% today). The market cap for Dr. Reddy’s Laboratories Ltd. is 7980.47, and is in the sector Healthcare, and Drug Manufacturers – Other industry. The target price for Dr. Reddy’s Laboratories Ltd. is 48.95. Currently Dr. Reddy’s Laboratories Ltd. is trading with a P/E of 34.71, and a forward P/E of 20.7. Average volume for Dr. Reddy’s Laboratories Ltd. is 316.88 and so far today it is 85396.

Performance in the last year for Dr. Reddy’s Laboratories Ltd. has been -28.85%. For EPS growth, Dr. Reddy’s Laboratories Ltd. has seen a growth of -9.80%, and is looking to grow in the next year to 66.39%. More long term stats show that EPS growth has been 12.50% over the last five years and could be 21.10% for the next five years. Dr. Reddy’s Laboratories Ltd. has seen sales growth quarter over quarter at -13.90%, with EPS growth quarter over quarter at -79.20%. The 20-day simple moving average is -1.93%, with the 200-day simple moving average coming to -1.43%.

Since the IPO date for Dr. Reddy’s Laboratories Ltd. on the 04/11/2001, Dr. Reddy’s Laboratories Ltd. has seen performance year to date to be -0.46%. With Dr. Reddy’s Laboratories Ltd. trading at 45.28, the dividend yield is 0.65%, and the EPS is 1.32.

So could Dr. Reddy’s Laboratories Ltd., be undervalued? Well as said before P/E is 34.71. The PEG is 1.65, P/S is 3.56 and the P/B is at 4.43. The P/cash is 20.8, with P/free cash flow at 21.28.

Dr. Reddy’s Laboratories Ltd. ability to deal with debt shows that the current ratio is 1.5, and the quick ratio is 1.1. This is with long term debt/equity at 0.1, and total debt/equity at 0.33.

In terms of margins, Dr. Reddy’s Laboratories Ltd. has a gross margin of 58.50%, an operating margin of 15.00% and a profit margin of 10.10%.Payout ratio for Dr. Reddy’s Laboratories Ltd. is 22.70%. Return on assets come to 7.40% with return on investment coming to 13.50%.

Insider ownership for Dr. Reddy’s Laboratories Ltd., is at 27.70% and institutional ownership comes to 17.10%. Outstanding shares are at 174.17. While shares float is 121.76. The float short is currently 3.62%, and short ratio is 13.9.

Disclaimer: Remember there is a risk to your investment, this is not a recommendation, nor personal advice, never invest more than you are able too loose.

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Mark Hines

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