Discounted Cash Flow (DCF) Analysis Unlevered

Dr. Reddy's Laboratories Limited (RDY)

$50.55

+0.65 (+1.30%)
All numbers are in Millions, Currency in USD
Stock DCF: 4,801.27 | 50.55 | 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 26,83935,52231,48740,17946,24148,853.2454,162.9260,049.6866,576.2573,812.17
EBITDA (%)
EBIT 15,12923,33219,01527,38334,41731,943.3135,415.1139,264.2443,531.7248,263.02
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 54,76750,03061,75461,68370,04981,592.0990,460.02100,291.78111,192.12123,277.17
Account Receivables (%)
Inventories 29,08933,57935,06645,41250,88452,321.1958,007.7864,312.4371,302.3079,051.88
Inventories (%)
Accounts Payable 16,05210,29610,74512,69625,57220,331.2022,540.9224,990.8127,706.9730,718.33
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 $ 50.55
Beta 0.253
Diluted Shares Outstanding 166.33
Cost of Debt
Tax Rate 27.03
After-tax Cost of Debt 4.57%
Risk-Free Rate
Market Risk Premium
Cost of Equity 5.158
Total Debt 33,845
Total Equity 8,408.23
Total Capital 42,253.23
Debt Weighting 80.10
Equity Weighting 19.90
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 26,83935,52231,48740,17946,24148,853.2454,162.9260,049.6866,576.2573,812.17
EBIT 15,12923,33219,01527,38334,41731,943.3135,415.1139,264.2443,531.7248,263.02
Tax Rate 31.62%16.25%-8.13%34.74%27.03%20.30%20.30%20.30%20.30%20.30%
EBIAT 10,344.8119,539.5020,560.9217,871.0525,114.2425,457.9628,224.8931,292.5534,693.6238,464.34
Depreciation 11,71012,19012,47212,79611,82416,909.9318,747.8120,785.4423,044.5325,549.15
Accounts Receivable -4,737-11,72471-8,366-11,543.09-8,867.94-9,831.76-10,900.33-12,085.05
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 --5,7564491,95112,876-5,240.802,209.722,449.892,716.163,011.37
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 11,011.8118,729.5014,155.929,782.0616,927.259,099.7417,945.4119,895.8322,058.2324,455.66
WACC
PV UFCF 8,692.0816,373.5517,339.8918,363.2619,447.03
SUM PV UFCF 80,215.82

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 4.69
Free cash flow (t + 1) 24,944.77
Terminal Value 927,314.83
Present Value of Terminal Value 737,396.73

Intrinsic Value

Enterprise Value 817,612.55
Net Debt 18,993
Equity Value 798,619.55
Shares Outstanding 166.33
Equity Value Per Share 4,801.27