Dr Reddy's LaboratoriesFRA:RDDA +3.33%82 Operating Margin % is 1.10% as of Mar. 2026, which is 94% below its 10-year median of 17.05. GuruFocus rates FRA:RDDA with a GF Score™ of 82/100 and a GF Value™ of €13.16 (Fairly Valued). The stock has 5 warning signs investors should review. Among 955 Drug Manufacturers companies, Dr Reddy's Laboratories ranks better than 70.26% on this metric.
Dr Reddy's Laboratories Ltd operating margin is expanding. Margin expansion is usually a good sign.
The historical rank and industry rank for Dr Reddy's Laboratories's Operating Margin % or its related term are showing as below:
FRA:RDDA'
s Operating Margin % Range Over the Past 10 Years
Min: 8.47 Med: 17.05 Max: 24.02
Current: 14.85
FRA:RDDA's Operating Margin % is ranked better than 70.26% of 955
companies
in the Drug Manufacturers industry
Industry Median: 7.45
vs FRA:RDDA: 14.85
Dr Reddy's Laboratories (FRA:RDDA) Operating Margin % Explanation
Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).
If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.
For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).
Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.
Dr Reddy's Laboratories Operating Margin % Related Terms
Dr Reddy's Laboratories Operating Margin % Historical Data
* Premium members only.
The historical data trend for Dr Reddy's Laboratories's Operating Margin % 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.
For the Drug Manufacturers - Specialty & Generic subindustry, Dr Reddy's Laboratories's Operating Margin %, along with its competitors' market caps and Operating Margin % 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 Operating Margin % vs Drug Manufacturers Industry
For the Drug Manufacturers industry and Healthcare sector, Dr Reddy's Laboratories's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Dr Reddy's Laboratories's Operating Margin % falls into.
Dr Reddy's Laboratories Operating Margin % Calculation
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
Dr Reddy's Laboratories's Operating Margin % for the fiscal year that ended in Mar. 2026 is calculated as
* 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.
Dr Reddy's Laboratories (FRA:RDDA) has a Operating Margin % of 1.10% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Dr Reddy's Laboratories and its competitors. This is 94% below median its historical median of 17.05. Over the past decade, Dr Reddy's Laboratories' Operating Margin % has ranged from 8.47 to 24.02. According to the industry distribution chart, Dr Reddy's Laboratories ranks #284 out of 955 companies in the Drug Manufacturers industry, placing it in the top 29.7%.
Is Dr Reddy's Laboratories' Operating Margin % too high?
Dr Reddy's Laboratories' current Operating Margin % of 1.10% is 94% below median its 10-year median of 17.05. Over the past 10 years, this metric has ranged from a low of 8.47 to a high of 24.02. The Drug Manufacturers industry median Operating Margin % is 7.45. Dr Reddy's Laboratories' value of 1.10% is 85.2% below this industry median. Based on the distribution chart, Dr Reddy's Laboratories ranks #284 out of 955 companies in the Drug Manufacturers industry, which is above the industry midpoint. Overall, Dr Reddy's Laboratories has a GF Score™ of 82/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Dr Reddy's Laboratories' Operating Margin % compare to ZTS?
According to the Drug Manufacturers industry distribution chart, Dr Reddy's Laboratories ranks #284 out of 955 companies for Operating Margin %. This puts Dr Reddy's Laboratories in the upper half of its industry. The industry median Operating Margin % is 7.45. Dr Reddy's Laboratories' value of 1.10% is 85.2% below this benchmark. Historically, Dr Reddy's Laboratories' own Operating Margin % has ranged from 8.47 to 24.02 over the past decade. While the company's 10-year median is 17.05 vs. the industry median of 7.45, Dr Reddy's Laboratories has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Operating Margin % for a Drug Manufacturers company?
The median Operating Margin % among Drug Manufacturers companies is 7.45, based on 955 companies in the industry. Companies in the top quartile (top 25%) have a Operating Margin % significantly above this median, while those in the bottom quartile fall well below. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Dr Reddy's Laboratories's current Operating Margin % of 1.10% is 85.2% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on Dr Reddy's Laboratories and its competitors. For the Drug Manufacturers industry, the median Operating Margin % is 7.45 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Dr Reddy's Laboratories's current Operating Margin % is 1.10%, which is 94% below median its own 10-year median of 17.05. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Dr Reddy's Laboratories stock overvalued right now?
Based on GuruFocus' analysis, Dr Reddy's Laboratories (FRA:RDDA) is currently considered Fairly Valued. The stock's GF Value™ is €13.16, compared to a current price of €12.40 — trading 5.8% below its estimated fair value. The current Operating Margin % is 1.10%, which is 94% below median its 10-year median of 17.05 and 85.2% below the Drug Manufacturers industry median of 7.45. Dr Reddy's Laboratories' overall GF Score™ is 82/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For Dr Reddy's Laboratories (FRA:RDDA), the current Operating Margin % is 1.10% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Dr Reddy's Laboratories (FRA:RDDA) Overvalued in 2026?
Based on GuruFocus' analysis, Dr Reddy's Laboratories stock appears to be undervalued.
The current stock price of €12.40 is trading 5.8% below its estimated GF Value™ of €13.16.
GuruFocus considers Dr Reddy's Laboratories to be Fairly Valued.
Key valuation signals for FRA:RDDA:
Operating Margin %: 1.10% (94% below median its 10-year median of 17.05)
GF Value™: €13.16 vs. price of €12.40 (5.8% below fair value)
Industry Position: 85.2% below the Drug Manufacturers median (#284 of 955)
No single metric tells the full story. See the FRA:RDDA stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
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 40% of its generics sales, with other key markets being India (20%) and Europe (20%). 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.
82GF Score
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