12 Most Profitable Pharmaceutical Stocks Right Now

8. Dr. Reddy’s Laboratories Limited (NYSE:RDY)

Net Income Growth 5Y: 14.80%

Dr. Reddy’s Laboratories Limited (NYSE:RDY) operates as an integrated pharmaceutical company, meaning it is involved in various stages of the pharmaceutical supply chain. The company’s main activities include the manufacture and marketing of prescription and over-the-counter (OTC) finished pharmaceutical products, active pharmaceutical ingredients (APIs), and intermediates.

In Q2 FY 2025, Dr. Reddy’s Laboratories Limited (NYSE:RDY) reported strong financial performance with consolidated revenues of INR 8,016 crores, reflecting a 17% year-over-year and 4% sequential growth. This growth was driven by contributions from North America (16% growth) and emerging markets (20% growth). The gross profit margin improved to 59.6%, up 92 basis points, due to better product mix and manufacturing efficiency, despite some price erosion in the generics market.

The company’s operating expenses rose 20% to INR 2,301 crores, mainly due to investments in new initiatives, higher freight costs, and acquisition-related expenses. R&D spending increased by 33% to INR 727 crores, supporting the development of its pipeline. EBITDA reached INR 2,280 crores, with a margin of 28.4%, while the profit before tax was INR 1,917 crores, showing a 25.7% margin after excluding one-time costs.

Street analysts hold a consensus Moderate Buy rating on Dr. Reddy’s Laboratories Limited (NYSE:RDY), with an average price target of $17.00. This target reflects a 20.74% potential upside from the current price of $14.08, with both the high and low price forecasts also set at $17.00.