Dr Reddy's Laboratories (Dr Reddy's Laboratories) Interest Coverage

: 42.90 (As of Dec. 2023)

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Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. Dr Reddy's Laboratories's Operating Income for the three months ended in Dec. 2023 was $203 Mil. Dr Reddy's Laboratories's Interest Expense for the three months ended in Dec. 2023 was $-5 Mil. Dr Reddy's Laboratories's interest coverage for the quarter that ended in Dec. 2023 was 42.90. The higher the ratio, the stronger the company's financial strength is.

The historical rank and industry rank for Dr Reddy's Laboratories's Interest Coverage or its related term are showing as below:

RDY' s Interest Coverage Range Over the Past 10 Years
Min: 15.26 Med: 28.77 Max: 44.22
Current: 44.22

RDY's Interest Coverage is ranked better than
71.74% of 690 companies
in the Drug Manufacturers industry
Industry Median: 12.175 vs RDY: 44.22

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Dr Reddy's Laboratories Interest Coverage Historical Data

The historical data trend for Dr Reddy's Laboratories's Interest Coverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

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Dr Reddy's Laboratories Annual Data

Trend

Mar14

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Interest Coverage

22.31

33.34

33.93

37.49

41.35

Dr Reddy's Laboratories Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Interest Coverage																42.02	36.89	47.54	49.54	42.90

Competitive Comparison

For the Drug Manufacturers - Specialty & Generic subindustry, Dr Reddy's Laboratories's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Dr Reddy's Laboratories Interest Coverage Distribution

For the Drug Manufacturers industry and Healthcare sector, Dr Reddy's Laboratories's Interest Coverage distribution charts can be found below:

* The bar in red indicates where Dr Reddy's Laboratories's Interest Coverage falls into.

Dr Reddy's Laboratories Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage

-1

Operating Income

Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt ⁽¹⁾.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Dr Reddy's Laboratories's Interest Coverage for the fiscal year that ended in Mar. 2023 is calculated as

Here, for the fiscal year that ended in Mar. 2023, Dr Reddy's Laboratories's Interest Expense was $-17 Mil. Its Operating Income was $718 Mil. And its Long-Term Debt & Capital Lease Obligation was $16 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Mar. 2023 )	/	Interest Expense (A: Mar. 2023 )
	=	-1	*	717.838	/	-17.358
	=	41.35

Dr Reddy's Laboratories's Interest Coverage for the quarter that ended in Dec. 2023 is calculated as

Here, for the three months ended in Dec. 2023, Dr Reddy's Laboratories's Interest Expense was $-5 Mil. Its Operating Income was $203 Mil. And its Long-Term Debt & Capital Lease Obligation was $74 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2023 )	/	Interest Expense (Q: Dec. 2023 )
	=	-1	*	203.065	/	-4.733
	=	42.90

The higher the ratio, the stronger the company's Financial Strength is.

Dr Reddy's Laboratories (NYSE:RDY) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .

Dr Reddy's Laboratories Interest Coverage Related Terms

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Dr Reddy's Laboratories (Dr Reddy's Laboratories) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Drug Manufacturers » Dr Reddy's Laboratories Ltd (NYSE:RDY) » Definitions » Interest Coverage

Traded in Other Exchanges

DRREDDY:India 500124:India RDDA:Germany RDDA:Germany R1DY34:Brazil

Address

8-2-337, Road No. 3, Banjara Hills, Hyderabad, TG, IND, 500 034

Website

https://www.drreddys.com

Dr. Reddy's is one of the largest generic drug manufacturers in the world. It has a significant presence in North America, a region that makes up roughly half of its generics sales, and it services India (22% of its generics sales), Russia (12%), and certain European and Latin American countries. Beyond simple generics, Dr. Reddy's also has a solid portfolio of injectables which make up 25% of its North America sales. In branded generic markets like India, Dr. Reddy's has established a compelling presence with its strong brand name and earned a top five spot in key therapeutic areas including oncology and gastroenterology. Dr. Reddy's also has an active pharmaceutical ingredient business that manufactures over 150 APIs and sells in over 75 countries.