DRREDDY vs SUNPHARMA
Side-by-side comparison of Dr. Reddy's Laboratories Ltd. and Sun Pharmaceutical Industries Ltd.. Descriptive only — not investment advice.
Dr. Reddy's Laboratories Ltd.
Pharma
Quality Score: 57/100
Sun Pharmaceutical Industries Ltd.
Pharma
Quality Score: 65/100
At a glance
| Metric | DRREDDY | SUNPHARMA |
|---|---|---|
| Quality Score | 57/100 | 65/100 |
| P/E (trailing) | 19.1 | 40.6 |
| Forward P/E | 23.5 | 32.6 |
| ROE | +16.1% | — |
| Profit margin | +16.4% | +19.2% |
| Debt-to-equity | 18.03 | 6.67 |
| Dividend yield | +0.62% | +0.89% |
| 1Y price return | +12.2% | +2.6% |
| From 52w high | -6.0% | -0.5% |
| Analyst rating1 = Strong Buy, 5 = Strong Sell | 2.82 | 1.53 |
Highlighted value = better on the metric (lower for P/E, D/E, drawdown, analyst rating; higher elsewhere). Descriptive only.
Snapshots
Dr. Reddy's Laboratories (DRREDDY) trades at ₹1,293.90, up 12.21% over 12 months and above both its 50-DMA (₹1,277.62) and 200-DMA (₹1,258.56). Trailing PE of 19.06 is the lowest among six tracked Pharma peers, while 5-year earnings CAGR of -14.3% and rising debt-to-equity of 18.03 reflect a company navigating a period of profitability pressure. Q4FY26 results are due May 12, 2026, making near-term data a key reference point.
Sun Pharma trades at ₹1,847.9, above both its 50-DMA (₹1,752.84) and 200-DMA (₹1,696.21), near its 52-week high (drawdown of -0.53%), with a trailing PE of 40.58 and forward PE of 32.61. The dominant recent event is the announced $11.75 billion acquisition of US-listed Organon, India's largest-ever pharma deal, which has driven uniformly positive news sentiment across 8 tracked headlines. Reported D/E of 6.675 is already elevated for the sector and the acquisition's financing structure will be a key variable for leverage trajectory.
Pros
- ✓Trailing PE of 19.06 ranks 1st (lowest) among 6 Pharma peers, including Sun Pharma (40.59), Divi's (71.88), and Max Healthcare (69.48) — a notable valuation gap to sector.
- ✓Stock is above both 50-DMA (₹1,277.62) and 200-DMA (₹1,258.56) with RSI at 52.21 (neutral), and the 52-week drawdown is limited to -5.96% from the high.
- ✓FCF was positive in 4 of the available history years, indicating the business has generated cash in most recent periods despite earnings pressure.
- ✓Revenue has grown at a 5-year CAGR of 4.4%, providing a top-line base even as margins and earnings have compressed over the same period.
- ✓5-year revenue CAGR of 13.5% and earnings CAGR of 15.7% reflect sustained compounding; forward PE of 32.61 represents a 19.6% compression versus trailing PE of 40.58, implying market expectation of continued earnings growth.
- ✓Price is above both 50-DMA (₹1,752.84) and 200-DMA (₹1,696.21), with the stock within 0.53% of its 52-week high and up 9.12% over the past 3 months.
- ✓Quality score of 50 ranks 2nd of 6 in the peer group, ahead of Cipla (30), Dr. Reddy's (32), Divi's Lab (34), and Apollo Hospitals (42), with only Max Healthcare (54) scoring higher.
- ✓FCF was positive in 4 of the tracked years, and the Organon deal, if executed, would expand Sun Pharma's US specialty portfolio and geographic diversification.
Cons
- ✗5-year earnings CAGR of -14.3% reflects a sustained decline in profitability; ROE has cleared 15% in only 3 of the reported years.
- ✗Debt-to-equity of 18.03 is elevated and the debt trend is classified as rising, a combination that adds financial risk in a period of declining earnings.
- ✗Quality score of 32 ranks 5th out of 6 peers in the Pharma cohort, with sector peers ranging from 30 (Cipla) to 54 (Max Healthcare).
- ✗Forward PE of 23.52 exceeds the trailing PE of 19.06, indicating the current price embeds an earnings recovery expectation that the historical 5-year trend has not corroborated.
- ✗D/E of 6.675 is materially elevated for a pharma company; if the $11.75 billion Organon deal is predominantly debt-funded, leverage could increase significantly, amplifying financial risk in a rate-sensitive environment.
- ✗ROE cleared the 15% threshold in only 3 of tracked years, indicating that high top-line and bottom-line growth has not consistently translated into strong returns on equity; debt trend is additionally marked as rising.
- ✗Profit margin of 19.21% and quality score of 50 are mid-range; the stock's PE of 40.58 is the third-highest among the 6 peer group (below Divi's at 71.88, Max Healthcare at 69.48, Apollo at 64.58), pricing in a growth premium that depends on deal execution.
- ✗FCF positivity in 4 of tracked years means 1 or more years recorded negative FCF; combined with rising debt and a large pending acquisition, cash generation consistency is a metric to monitor closely post-deal close.
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