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Today's prices ask more of Sun Pharma than of Dr Reddy's.
At current prices, buyers of Dr Reddy's are assuming about 0% growth against 13% in its own record; for Sun Pharma it is 7% against 16%. That shows which share needs more to go right — not which is cheaper. How far each trades from its estimated fair value is in the full valuations.
- Valuation method: both on discounted cash flow.
- Size: Sun Pharma is worth about 3.9 times Dr Reddy's on the stock market.
- Record: On revenue the two have grown at much the same pace: Dr Reddy's compounded at about 11% a year (FY2018–FY2026) and Sun Pharma at about 10% (FY2018–FY2026).
- What to watch: replacing revlimid at Dr Reddy's; specialty growth at Sun Pharma.
| Dr Reddy's | Sun Pharma | |
|---|---|---|
| Price | ₹1,380 | ₹1,880 |
| Market cap | ₹1.15L Cr | ₹4.51L Cr |
| P/E | 41.2 | 41.1 |
| P/B | 3.04 | 5.40 |
| Fair value 🔒 sign in | ₹0,000 | ₹0,000 |
| Upside 🔒 sign in | +00% | +00% |
| Valued on | Discounted cash flow | Discounted cash flow |
01Two businesses
A Hyderabad generics maker with a global footprint
Dr Reddy's Laboratories was founded in Hyderabad in 1984 by Dr K. Anji Reddy. It makes generic medicines for the US, India, Russia and other emerging markets, and active pharmaceutical ingredients that it sells to other drugmakers.
From generics to specialty medicines
Sun Pharmaceutical Industries, founded by Dilip Shanghvi in 1983, is India's largest pharmaceutical company and the leader in branded prescriptions in India. It sells generics in the US, emerging markets and Europe, and owns Taro Pharmaceutical, a dermatology-focused generics maker it took fully private in 2024.
02The records side by side
On revenue the two have grown at much the same pace: Dr Reddy's compounded at about 11% a year (FY2018–FY2026) and Sun Pharma at about 10% (FY2018–FY2026). By revenue, Sun Pharma is about 1.7 times the size of Dr Reddy's. Dr Reddy's kept 12.3% of revenue as net profit in FY2026; Sun Pharma kept 19.7% of revenue as net profit in FY2026.
Full ten-year tables and charts are on each company's page: Dr Reddy's · Sun Pharma.
03What each price assumes
Work backwards from each share price and you can see what buyers are taking for granted — the rate each company must sustain to justify what it costs, against what its own record supports.
04What decides each one's value
- Replacing RevlimidNew US launches and other markets need to fill the gap left by one very profitable product.
- US generic pricingPrices for older generics keep falling, so the pipeline has to keep moving.
- Specialty growthThe specialty portfolio is the main reason Sun earns a higher multiple than most Indian pharma companies. Its growth rate drives the valuation.
- The India businessBranded prescriptions in India are steady, cash-rich and grow with the domestic market.
05What could go wrong
- FDA inspectionsAdverse findings at a plant can block US approvals and shipments.
- Pipeline delaysLate approvals push out the launches that replace lost profit.
- US FDA complianceWarning letters or import alerts at a manufacturing site can block US sales from that plant for years.
- Trial and patent riskA failed trial or an early generic challenge can wipe out expected specialty revenue.
06Which is better value?
Sign in free to see which trades further below its worth
- ✓Both fair values per share — each on the method that fits the business
- ✓Every step of both workings — growth, margins and cost of capital, with sources
- ✓Bull, base and bear cases — for each company
- ✓Downloadable reports — the full write-up for each, yours to keep
08Questions people ask
Is Dr Reddy's or Sun Pharma better value?
That turns on how far each share trades from its estimated fair value. Both figures, with every step of the working, are in the full valuations, free to view once you sign in. On the public numbers, Dr Reddy's trades at 41.2 times earnings and 3.04 times book value, and Sun Pharma at 41.1 times earnings and 5.40 times book value — but multiples alone mislead when two businesses work differently, which is why each is valued on the method that fits it.
What is the difference between Dr Reddy's and Sun Pharma?
Dr Reddy's Laboratories was founded in Hyderabad in 1984 by Dr K. Sun Pharmaceutical Industries, founded by Dilip Shanghvi in 1983, is India's largest pharmaceutical company and the leader in branded prescriptions in India.
Are Dr Reddy's and Sun Pharma valued the same way?
Yes — both on discounted cash flow, so their workings compare like for like.
What does today's price assume for Dr Reddy's and Sun Pharma?
Worked backwards from the share price, Dr Reddy's needs about 0% growth and Sun Pharma about 7% growth, against 13% and 16% in their own records.