Unveiling the Bullish Momentum: The Case for RDY and DRREDDY Stocks

David Keller
2 min readSep 26, 2023

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When it comes to investing in the stock market, the search for growth stocks can be both exciting and challenging. Investors seeking above-average financial growth are often rewarded with impressive returns, but the path to finding such stocks is not always straightforward. This is where the Zacks Growth Style Score, part of the Zacks Style Scores system, comes into play. It goes beyond the conventional growth attributes to identify companies with genuine growth potential. Among these stocks, Doctor Reddy’s (RDY/DRREDDY) stands out as a promising choice, not only because of its favorable Growth Score but also due to its top Zacks Rank.

Let’s delve into the reasons why NSE: DRREDDY & NYSE: RDY stocks appear to be in a bullish momentum.

1. Earnings Growth: One of the cornerstones of identifying a great growth stock is its earnings growth potential. Companies that consistently demonstrate double-digit earnings growth tend to attract investor attention. Doctor Reddy’s boasts a historical EPS growth rate of 14.9%, but what truly sets it apart is its projected earnings growth of 14.7% for the current year, outperforming the industry average by a substantial margin.

2. Cash Flow Growth: Cash flow is the lifeblood of any business, and robust cash flow growth is particularly vital for growth-oriented companies. It enables them to expand their operations without relying heavily on external funding. RDY excels in this regard, with a year-over-year cash flow growth rate of 28.6%, significantly surpassing industry norms. Moreover, its annualized cash flow growth rate over the past 3–5 years stands at an impressive 15.2%, compared to the industry average of 9%.

3. Promising Earnings Estimate Revisions: Keeping an eye on earnings estimate revisions is crucial for investors. Positive trends in these revisions often foreshadow near-term stock price movements. Doctor Reddy’s has witnessed upward revisions in current-year earnings estimates, with the Zacks Consensus Estimate rising by 1.2% in the past month. This upward trajectory indicates growing confidence in the company’s future prospects.

In summary, Doctor Reddy’s combines a Zacks Rank #1 (Strong Buy) with a Growth Score of B, showcasing its potential as an outperforming growth stock. As investors, it’s essential to consider not only the historical metrics but also the promising growth indicators that suggest RDY and DRREDDY stocks are poised for success.

In a market filled with choices, selecting growth stocks can be challenging. However, Doctor Reddy’s (NSE: DRREDDY) (NYSE: RDY) has emerged as a promising candidate, offering investors the potential for substantial returns and a healthy dose of growth in their portfolios. It’s time to consider these pharmaceutical stocks as a strategic addition to your investment portfolio.

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David Keller

Market analyst into the intersection of technology, finance, society, politics, and macro-econ. Straddles the NY-TLV axis. Fortis Fortuna Adiuvat.