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: 41/100
Sun Pharmaceutical Industries Ltd.
Pharma
Quality Score: 69/100
At a glance
| Metric | DRREDDY | SUNPHARMA |
|---|---|---|
| Quality Score | 41/100 | 69/100 |
| P/E (trailing) | 24.7 | 38.5 |
| Forward P/E | 19.6 | 28.5 |
| ROE | +11.8% | +14.7% |
| Profit margin | +12.8% | +19.6% |
| Debt-to-equity | 20.33 | 5.52 |
| Dividend yield | +0.63% | +0.87% |
| 1Y price return | -2.9% | +12.5% |
| From 52w high | -7.5% | -4.1% |
| Analyst rating1 = Strong Buy, 5 = Strong Sell | 2.72 | 1.65 |
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 ₹1,272 with a trailing PE of 24.66 and a forward PE of 19.64, sitting just below its 50-DMA (₹1,287) but above its 200-DMA (₹1,265). The stock is -2.93% over 12 months against a pharma peer group where 1-year price changes are unavailable for direct comparison. Fundamental metrics show 5-year earnings growth of -86.2% and a debt-to-equity of 20.33 (rising trend), alongside an ROE of 11.84% — the weakest quality score in a 6-stock pharma cohort.
Sun Pharmaceutical Industries trades at ₹1,838.3, up 12.49% over 12 months and 5.38% over 3 months, sitting above both its 50-DMA (₹1,791) and 200-DMA (₹1,725) with RSI at 59. The stock commands a trailing PE of 38.5 (forward PE 28.5) on a 5-year earnings CAGR of 25.6%, while carrying a D/E ratio of 5.517 that stands as the primary balance-sheet watch point. A ~$1 billion acquisition in the US market, funded by SBI, has emerged as the key near-term corporate event as of June 2026.
Pros
- ✓FCF has been positive in 4 of the available historical years, indicating the business has generated cash despite earnings volatility.
- ✓Forward PE of 19.64 represents a ~20% discount to the trailing PE of 24.66, which the consensus of 39 analysts (mean rating 2.72 on a 1-5 scale, lower = more constructive) may reflect in expectations of an earnings recovery.
- ✓June 2026 first-to-market U.S. launch of generic Bosutinib (400mg) adds a pipeline catalyst in the oncology generics segment, expanding the U.S. generics portfolio.
- ✓Trailing PE of 24.66 is the lowest in the 6-stock pharma peer cohort, where peers range from Cipla at 28.2 to Divi's at 70.0, positioning DRREDDY at the low-valuation end of the sector on this metric.
- ✓Highest quality score among the 6-stock peer group (59 vs. peer range 24–51), combining profitability, consistency, and balance-sheet trajectory into a composite leadership position within the sector.
- ✓5-year earnings CAGR of 25.6% and revenue CAGR of 12.8% reflect compounding over a full business cycle, with FCF positive in 4 of the tracked years and debt trend classified as falling.
- ✓Price is above both the 50-DMA (₹1,791) and 200-DMA (₹1,725) with a drawdown of only 4.09% from its 52-week high, indicating the stock has maintained relative price strength while sector peers lack comparable 1-year price data.
- ✓Forward PE of 28.5 represents a 26% compression from the trailing PE of 38.5, implying that consensus earnings estimates embed meaningful growth in the next fiscal year relative to the trailing reported figure.
Cons
- ✗5-year earnings growth of -86.2% and 5-year revenue growth of -11.6% represent sustained multi-year deterioration; the company was among those cited as reporting declining EPS for 4 straight consecutive quarters.
- ✗Debt-to-equity of 20.33 with a rising debt trend is substantially elevated for a pharma manufacturer; this combination of high leverage and contracting earnings increases balance sheet sensitivity.
- ✗ROE of 11.84% clears the 15% threshold in only 3 of available historical years, and the quality score of 25 ranks last in the 6-peer cohort (sector leader Sun Pharma at 59, Divi's at 51).
- ✗Consistency score of 40/100 reflects limited earnings durability; ROE persistence below 15% in the majority of measured years suggests structural rather than cyclical profitability pressure.
- ✗D/E of 5.517 is materially elevated for a pharma manufacturer; the ~$1 billion US acquisition announced in June 2026 and funded by SBI carries execution and integration risk that could further stretch a balance sheet where leverage is already the primary fundamental concern.
- ✗ROE of 14.72% has exceeded 15% in only 3 of the tracked years; a 5-year earnings CAGR of 25.6% has not consistently translated into above-median returns on equity, and the quality consistency score of 73 reflects intermittent rather than structural persistence.
- ✗Profit margin of 19.64% is solid in absolute terms, but the Q4 FY26 earnings release was accompanied by cost-pressure commentary, highlighting that margin sustainability is an active variable rather than a given as the company pursues US-market expansion.
- ✗At PE 38.5, the stock trades at a 38% premium to Cipla (28.2) and a 56% premium to Dr. Reddys (24.7); sustaining that valuation gap requires continued earnings delivery at a pace that has historically been intermittent at the ROE level.
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