Discounted Cash Flow (DCF) Analysis Unlevered

Dr. Reddy's Laboratories Limited (RDY)

$54.79

-1.50 (-2.66%)
All numbers are in Millions, Currency in USD
Stock DCF: 22,342.51 | 54.79 | undervalue

Operating Data

Year
A/P
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Actual
2023
Projected
2024
Projected
2025
Projected
2026
Projected
2027
Projected
Revenue 142,028153,851174,600189,722214,391237,692.35263,526.23292,167.90323,922.52359,128.44
Revenue (%)
EBITDA 26,83935,52231,48740,17945,08048,595.8153,877.5059,733.2466,225.4373,423.22
EBITDA (%)
EBIT 15,12923,33219,01527,38333,25631,685.8835,129.6938,947.8143,180.9047,874.07
EBIT (%)
Depreciation 11,71012,19012,47212,79611,82416,909.9318,747.8120,785.4423,044.5325,549.15
Depreciation (%)

Balance Sheet Data

Year
A/P
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Actual
2023
Projected
2024
Projected
2025
Projected
2026
Projected
2027
Projected
Total Cash 20,96824,75725,74034,57344,36540,176.4644,543.0949,384.3154,751.7060,702.46
Total Cash (%)
Account Receivables 54,76750,03061,75461,68380,27083,858.4692,972.72103,077.58114,280.69126,701.42
Account Receivables (%)
Inventories 29,08933,57935,06645,41250,88452,321.1958,007.7864,312.4371,302.3079,051.88
Inventories (%)
Accounts Payable 16,05210,29610,74512,69615,97118,202.3020,180.6422,37424,805.7427,501.78
Accounts Payable (%)
Capital Expenditure -11,043-7,491-6,115-12,561-19,049-15,047.08-16,682.49-18,495.64-20,505.87-22,734.57
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 54.79
Beta 0.193
Diluted Shares Outstanding 166.33
Cost of Debt
Tax Rate 27.03
After-tax Cost of Debt 2.07%
Risk-Free Rate
Market Risk Premium
Cost of Equity 4.512
Total Debt 33,845
Total Equity 9,113.49
Total Capital 42,958.49
Debt Weighting 78.79
Equity Weighting 21.21
Wacc

Build Up Free Cash

Year
A/P
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Actual
2023
Projected
2024
Projected
2025
Projected
2026
Projected
2027
Projected
Revenue 142,028153,851174,600189,722214,391237,692.35263,526.23292,167.90323,922.52359,128.44
EBITDA 26,83935,52231,48740,17945,08048,595.8153,877.5059,733.2466,225.4373,423.22
EBIT 15,12923,33219,01527,38333,25631,685.8835,129.6938,947.8143,180.9047,874.07
Tax Rate 31.62%16.25%-8.13%34.74%27.03%20.30%20.30%20.30%20.30%20.30%
EBIAT 10,344.8119,539.5020,560.9217,871.0524,267.0625,252.8027,997.4331,040.3634,414.0238,154.35
Depreciation 11,71012,19012,47212,79611,82416,909.9318,747.8120,785.4423,044.5325,549.15
Accounts Receivable -4,737-11,72471-18,587-3,588.46-9,114.26-10,104.85-11,203.11-12,420.74
Inventories --4,490-1,487-10,346-5,472-1,437.19-5,686.59-6,304.65-6,989.87-7,749.58
Accounts Payable --5,7564491,9513,2752,231.301,978.342,193.362,431.752,696.04
Capital Expenditure -11,043-7,491-6,115-12,561-19,049-15,047.08-16,682.49-18,495.64-20,505.87-22,734.57
UFCF 11,011.8118,729.5014,155.929,782.06-3,741.9424,321.3017,240.2419,114.0121,191.4423,494.66
WACC
PV UFCF 23,709.5916,383.9217,707.7719,138.5820,685.01
SUM PV UFCF 97,624.86

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 2.58
Free cash flow (t + 1) 23,964.55
Terminal Value 4,131,819.25
Present Value of Terminal Value 3,637,708.05

Intrinsic Value

Enterprise Value 3,735,332.91
Net Debt 18,993
Equity Value 3,716,339.91
Shares Outstanding 166.33
Equity Value Per Share 22,342.51