6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

January 2021

Commission File Number 1-15182

DR. REDDY’S LABORATORIES LIMITED

(Translation of registrant’s name into English)

8-2-337, Road No. 3, Banjara Hills

Hyderabad, Telangana 500 034, India

+91-40-49002900

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  x Form 40-F   ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ______

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ______

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes  ¨ No x

If “Yes” is marked, indicate below the file number assigned to registrant in connection with Rule 12g3-2(b): 82-________.

DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

We hereby furnish the United States Securities and Exchange Commission with copies of the following information about our public disclosures regarding our results of operations and financial condition for the quarter and nine months ended December 31,2020.

On January 29, 2021, we announced our results of operations for the quarter and nine months ended December 31, 2020. We issued a press release announcing our results under International Financial Reporting Standards (“IFRS”), IFRS Unudited Consolidated Financial Results, Ind AS Unudited Consolidated Financial Results with Limited Review report and Ind AS Unudited Standalone Financial Results with Limited Review report for the quarter and nine months ended December 31, 2020, a copy of which is attached to this Form 6-K as Exhibit 99.1 , 99.2 , 99.3 and 99.4 respectively. 

We have also made available to the public on our web site, www.drreddys.com, the following: IFRS Unudited Consolidated Financial Results, Ind AS Unaudited Consolidated Financial Results and Ind AS Unaudited Standalone Financial Results for the quarter and nine months ended December 31, 2020.

Exhibits

Exhibit Number	Description of Exhibits
99.1	Press Release, “Dr. Reddy’s Q3 FY21 Financial Results”, January 29, 2021
99.2	IFRS Unaudited Consolidated Financial Results for the quarter and nine months ended December 31, 2020
99.3	Ind AS Unaudited Consolidated Financial Results for the quarter and nine months ended December 31, 2020
99.4	Ind AS Unaudited Standalone Financial Results for the quarter and nine months ended December 31, 2020

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	DR. REDDY’S LABORATORIES LIMITED (Registrant)
Date:  January 29, 2021	By:	/s/ Sandeep Poddar
		Name:	Sandeep Poddar
		Title:	Company Secretary

EX-99.1

Exhibit 99.1

  

	CONTACT
DR. REDDY'S LABORATORIES LTD.	Investor relationS	Media relationS
8-2-337, Road No. 3, Banjara Hills,   Hyderabad - 500034. Telangana, India.	AMIT AGARWAL amita@drreddys.com   (Ph: +91-40-4900 2135)	APARNA TEKURI aparnatekuri@drreddys.com (Ph: +91-40-4900 2446)

Dr. Reddy’s Q3 & 9M FY21 Financial Results

Hyderabad, India, January 29, 2021: Dr. Reddy’s Laboratories Ltd. (BSE: 500124 | NSE: DRREDDY | NYSE: RDY | NSEIFSC: DRREDDY) today announced its consolidated financial results for the quarter and the nine months ended December 31, 2020. The information mentioned in this release is on the basis of consolidated financial statements under International Financial Reporting Standards (IFRS).

Q3 Performance Summary	9M Performance Summary
Rs. 4,930 Cr Revenue [Up: 12% YoY; 1% QoQ] 53.8% Gross Margin [Q3 FY20: 54.1%; Q2 FY21: 53.9%] Rs.1,439 Cr SGNA expenses [Up: 14% YoY; 10% QoQ] Rs. 411 Cr R&D expenses [8.3% of Revenues] Rs. 1,185 Cr EBITDA [24.0% of Revenues] Rs. 284 Cr* Profit before Tax [5.8% of Revenues] Rs. 20 Cr** Profit after Tax [0.4% of Revenues]	Rs. 14,244 Cr Revenue [Up: 9% YoY] 54.6% Gross Margin [9M FY20: 54.7%] Rs. 4,028 Cr SGNA expenses [Up: 6% YoY] Rs. 1,245 Cr R&D expenses [8.7% of Revenues] Rs. 3,615 Cr EBITDA [25.4% of Revenues] Rs. 2,025 Cr Profit before Tax [14.2% of Revenues] Rs. 1,361 Cr Profit after Tax [9.6% of Revenues]

*Excluding the impairment charge in Q3 FY21, the Profit before Tax is Rs. 882 cr

**Q3 FY21 Profit after Tax was impacted primarily due to non-recognition of deferred tax asset on impairment

Commenting on the results, Co-chairman & MD, G V Prasad said “We continued with our growth momentum while maintaining EBITDA margins. The profits were impacted due to trigger based impairment charge taken on a few acquired products including gNuvaring. We are progressing well on the phase 3 clinical trials for Sputnik V vaccine in India. We continue to focus on enhancing our product offerings to our patients to serve them better”.

1

All amounts in millions, except EPS All US dollar amounts based on convenience translation rate of I USD = Rs. 73.01

Dr. Reddy’s Laboratories Limited and Subsidiaries

Consolidated Income Statement

	Q3 FY21						Q3 FY20						YoY			Q2 FY21						QoQ
Particulars	($)			(Rs.)			($)			(Rs.)			Gr %			($)			(Rs.)			Gr %
Revenues		675			49,296			600			43,838			12			671			48,967			1
Cost of Revenues		312			22,758			276			20,116			13			309			22,558			1
Gross Profit		363			26,538			325			23,722			12			362			26,409			0
Operating Expenses
Selling, General & Administrative expenses		197			14,387			174			12,670			14			180			13,107			10
Research and Development expenses		56			4,108			54			3,949			4			60			4,359			(6	)
Impairment of non-current assets		82			5,972			181			13,200			(55	)		11			781			665
Other operating income		(2	)		(128	)		(3	)		(228	)		(44	)		(2	)		(149	)		(14	)
Results from operating activities		30			2,199			(80	)		(5,869	)		-			114			8,311			(74	)
Net finance income		(7	)		(493	)		(6	)		(419	)		18			(3	)		(237	)		108
Share of profit of equity accounted investees		(2	)		(151	)		(2	)		(176	)		(14	)		(1	)		(73	)		107
Profit / (loss) before Income Tax		39			2,843			(72	)		(5,274	)		-			118			8,621			(67	)
Income Tax		36			2,645			6			423			525			14			998			165
Profit / (loss) for the period		3			198			(78	)		(5,697	)		-			104			7,623			(97	)
Diluted Earnings Per Share (EPS)		0.02			1.19			(0.47	)		(34.37	)		-			0.63			45.83			(97	)

As % to revenues	Q3 FY21		Q3 FY20			Q2 FY21
Gross Profit		53.8		54.1			53.9
SG&A		29.2		28.9			26.8
R&D		8.3		9.0			8.9
EBITDA		24.0		24.5			25.9
PBT		5.8		(12.0	)		17.6
PAT		0.4		(13.0	)		15.6

EBITDA Computation

	Q3 FY21						Q3 FY20						Q2 FY21
Particulars	($)			(Rs.)			($)			(Rs.)			($)			(Rs.)
Profit before Income Tax		39			2,843			(72	)		(5,274	)		118			8,621
Interest income (net)*		(2	)		(180	)		(4	)		(274	)		(0	)		(1	)
Depreciation		29			2,131			29			2,130			30			2,188
Amortization		15			1,086			13			955			15			1,084
Impairment		82			5,972			181			13,200			11			781
EBITDA		162			11,851			147			10,737			174			12,673

* Includes income from Investments

2

All amounts in millions, except EPS All US dollar amounts based on convenience translation rate of I USD = Rs. 73.01

Key Balance Sheet Items

	As on 31st Dec 2020				As on 30th Sep 2020				As on 31st Dec 2019
Particulars	($)		(Rs.)		($)		(Rs.)		($)		(Rs.)
Cash and cash equivalents and current investments		291		21,282		357		26,074		280		20,457
Trade receivables (current & non-current)		732		53,408		689		50,335		631		46,095
Inventories		607		44,309		563		41,134		517		37,746
Property, plant and equipment		771		56,263		754		55,026		722		52,709
Goodwill and Other Intangible assets		562		41,062		624		45,553		423		30,847
Loans and borrowings (current & non-current)		280		20,443		376		27,429		224		16,320
Trade payables		316		23,072		313		22,833		244		17,810
Equity		2,320		1,69,395		2,265		1,65,337		2,036		1,48,672

Revenue Mix by Segment

	Q3 FY21		Q3 FY20		YoY		Q2 FY21		QoQ
Segment	(Rs.)		(Rs.)		Gr %		(Rs.)		Gr %
Global Generics		40,751		35,927		13		39,841		2
North America		17,394		15,999		9		18,328		(5	)
Europe		4,143		3,093		34		3,754		10
India		9,591		7,636		26		9,123		5
Emerging Markets		9,623		9,199		5		8,636		11
Pharmaceutical Services and Active Ingredients (PSAI)		7,009		6,906		1		8,505		(18	)
Proprietary Products & Others		1,536		1,005		53		621		147
Total		49,296		43,838		12		48,967		1

 

3

Revenue Analysis

Global Generics (GG)

Revenues from GG segment at Rs. 40.8 billion:

Ø Year-on-year growth of 13% and sequential quarter growth of 2%, primarily driven by new product launches and integration of the acquired portfolio from Wockhardt in India. The volume growth in the base business was largely offset by price erosion.

North America

Revenues from North America at Rs. 17.4 billion:

Ø Year-on-year growth of 9%, driven by new products launches, increase in volumes of our base business and a favorable forex rate, which was partially offset by price erosion.

Ø Sequential decline of 5%, primarily due to price erosion in some of the key molecules.

Ø We launched four new products during the quarter. This included Cinacalcet Tablets, Sapropterin Dihydrochloride Tablets and Succinylcholine Chloride Injection in the US along with Daptomycin Injection in Canada. We also re-launched one product in US - OTC Famotidine.

Ø We filed two new ANDAs during the quarter. As of 31^st December 2020, cumulatively 89 generic filings are pending for approval with the USFDA (87 ANDAs and 2 NDAs under 505(b)(2) route). Of the 89 ANDAs, 48 are Para IVs and we believe 24 have ‘First to File’ status.

Europe

Revenues from Europe at Rs. 4.1 billion:

Ø Year-on-year growth of 34% and sequential growth of 10%, which were driven by new product launches, favorable forex movement and volume traction, offset partly by price erosion.

India

Revenues from India at Rs. 9.6 billion:

Ø Year-on-year growth of 26% and sequential growth of 5%. YoY growth is on account of revenues from the acquired portfolio of Wockhardt and contribution from new product launches. QoQ growth was driven by volume traction.

Emerging Markets

Revenues from Emerging Markets at Rs. 9.6 billion. Year-on-year growth of 5%. Sequential growth of 11%:

Ø Revenues from Russia at Rs. 4.5 billion. Year-on-year decline of 8% is primarily due to weakening Ruble. Sequential growth of 14% contributed by increased volumes

Ø Revenues from other CIS countries and Romania market at Rs. 2.1 billion. Year-on-year growth of 18% and sequential growth of 8% driven by both base business and new product launches.

Ø Revenues from Rest of World (RoW) territories at Rs. 3.0 billion. Year-on-year growth of 20% and sequential growth of 10% is due to volume traction in the base business and new product launches.

Pharmaceutical Services and Active Ingredients (PSAI)

Revenues from PSAI at Rs. 7.0 billion:

Ø Year-on-year growth of 1% driven by new products and favorable forex rate, offset by lower volumes for some products.

Ø Sequential decline of 18% on account of lower volumes of certain products.

Ø During the quarter we filed DMF for five products in the US.

Proprietary Products (PP) & Others

Revenues from PP & Others at Rs. 1.5 billion:

Ø Year-on-year growth of 53% and sequential growth of 147%. The growth was driven by milestone income received for the compound AUR102.

4

Income Statement Highlights:

Ø Gross profit margin at 53.8%:

- Decline of 30 bps over previous year and 10 bps sequentially, which was primarily impacted due to price erosion and lower export benefits, partially offset by the milestone income received for the compound AUR102.

- Gross profit margin for GG and PSAI business segments are at 57.6% and 25.3% respectively.

Ø SG&A expenses at Rs. 14.4 billion, increased by 14% year-on-year primarily due to incremental costs post the integration of the acquired portfolio from Wockhardt in this year and increased freight expenses. Sequentially, it increased by 10% primarily due to pickup in sales & marketing activities in branded markets and increase in freight expenses.

Ø Impairment charge of Rs. 6.0 billion. In January, 2021 there has been an additional generic launch for the product Nuvaring^®, which has led to a considerable erosion in the value of this product for us, and accordingly we have taken an impairment charge of Rs. 3.2 billion. In addition to this, considering the current market dynamics, we have taken an additional impairment charge of Rs. 2.8 billion on the intangibles pertaining to other products. We had an impairment charge of Rs. 13.2 billion in Q3 FY 20 and Rs. 781 million in Q2 FY21.

Ø R&D expenses at Rs. 4.1 billion. As % to revenues these are: Q3 FY21: 8.3% | Q2 FY 21: 8.9% | Q3 FY20: 9.0%. Our focus continues on building a healthy pipeline of new products across our markets including development of products pertaining to COVID-19 treatment.

Ø Other operating income at Rs. 128 million compared to Rs. 228 million in Q3 FY20.

Ø Net Finance income at Rs. 493 million compared to Rs. 419 million in Q3 FY20.

Ø Profit before Tax at Rs. 2.8 billion, which is 5.8% of revenues.

Ø Profit after Tax at Rs. 198 million. The effective tax rate is ~93.0% for the quarter, impacted primarily due to non-recognition of deferred tax asset on impairment.

Ø Diluted earnings per share is at Rs. 1.19.

Other Highlights:

Ø EBITDA at Rs. 11.9 billion and the EBITDA margin is 24.0%

Ø Capital expenditure is at Rs. 2.9 billion.

Ø Free cash-flow: Net out-flow during the quarter stood at Rs. 580 million.

Ø Net cash surplus for the company is at Rs. 839 million as on December 31, 2020. Consequently, net debt to equity ratio is (0.005).

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Earnings Call Details (05:30 pm IST, 07:00 am EST, Jan 29, 2021)

The management of the Company will host an earnings call to discuss the Company’s financial performance and answer any questions from the participants.

Conference Joining Information

Option 1: Express Join with DiamondPass™

Pre-register with the below link and join without waiting for the operator. 

https://services.choruscall.in/DiamondPassRegistration/register?confirmationNumber=9941549&linkSecurityString=1ea6b66bb2

Option 2: Join through below Dial-In Numbers
Universal Access Number:	+91 22 6280 1219 +91 22 7115 8120
Local Access Number: Available all over India	+91 70456 71221
International Toll Free Number:	USA: 1 866 746 2133 UK: 0 808 101 1573 Singapore: 800 101 2045 Hong Kong: 800 964 448

No password/pin number is necessary to dial in to any of the above numbers. The operator will provide instructions on asking questions before and during the call.

Play Back: The play back will be available after the earnings call, till February 5^th, 2021. For play back dial in phone No: +91 22 7194 5757 | +91 22 6663 5757, and Playback Code is 37918.

Transcript: Transcript of the Earnings call will be available on the Company’s website: www.drreddys.com

About Dr. Reddy’s: Dr. Reddy’s Laboratories Ltd. (BSE: 500124, NSE: DRREDDY, NYSE: RDY) is an integrated pharmaceutical company, committed to providing affordable and innovative medicines for healthier lives. Through its three businesses - Pharmaceutical Services & Active Ingredients, Global Generics and Proprietary Products – Dr. Reddy’s offers a portfolio of products and services including APIs, custom pharmaceutical services, generics, biosimilars and differentiated formulations. Our major therapeutic areas of focus are gastrointestinal, cardiovascular, diabetology, oncology, pain management and dermatology. Dr. Reddy’s operates in markets across the globe. Our major markets include – USA, India, Russia & CIS countries, and Europe. For more information, log on to: www.drreddys.com

Disclaimer: This press release may include statements of future expectations and other forward-looking statements that are based on the management’s current views and assumptions and involve known or unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. In addition to statements which are forward-looking by reason of context, the words "may", "will", "should", "expects", "plans", "intends", "anticipates", "believes", "estimates", "predicts", "potential", or "continue" and similar expressions identify forward-looking statements. Actual results, performance or events may differ materially from those in such statements due to without limitation, (i) general economic conditions such as performance of financial markets, credit defaults , currency exchange rates , interest rates , persistency levels and frequency / severity of insured loss events (ii) mortality and morbidity levels and trends, (iii) changing levels of competition and general competitive factors, (iv) changes in laws and regulations and in the policies of central banks and/or governments, (v) the impact of acquisitions or reorganization , including related integration issues, (vi) the susceptibility of our industry and the markets addressed by our, and our customers’, products and services to economic downturns as a result of natural disasters, epidemics, pandemics or other widespread illness, including coronavirus (or COVID-19), and (vii) other risks and uncertainties identified in our public filings with the Securities and Exchange Commission, including those listed under the "Risk Factors" and "Forward-Looking Statements" sections of our Annual Report on Form 20-F for the year ended March 31, 2020. The company assumes no obligation to update any information contained herein.

6

EX-99.2

Exhibit 99.2 

Dr. Reddy’s Laboratories Ltd. 8-2-337, Road No. 3, Banjara Hills, Hyderabad - 500 034, Telangana,
India. CIN : L85195TG1984PLC004507   Tel      :+91 40 4900 2900 Fax     :+91 40 4900 2999 Email :mail@drreddys.com www.drreddys.com

Unaudited consolidated financial results of Dr. Reddy's Laboratories Limited and its subsidiaries for the quarter and nine months ended 31 December 2020 prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB)

		All amounts in Indian Rupees millions
		Quarter ended									Nine months ended						Year ended
Sl. No.	Particulars	31.12.2020			30.09.2020			31.12.2019			31.12.2020			31.12.2019			31.03.2020
		(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Audited)
1	Revenues		49,296			48,967			43,838			142,438			130,282			174,600
2	Cost of revenues		22,758			22,558			20,116			64,736			59,081			80,591
3	Gross profit (1 - 2)		26,538			26,409			23,722			77,702			71,201			94,009
4	Selling, general and administrative expenses		14,387			13,107			12,670			40,280			37,952			50,129
5	Research and development expenses		4,108			4,359			3,949			12,447			11,220			15,410
6	Impairment of non current assets		5,972			781			13,200			6,753			16,760			16,767
7	Other income, net		(128	)		(149	)		(228	)		(395	)		(4,122	)		(4,290	)
	Total operating expenses		24,339			18,098			29,591			59,085			61,810			78,016
8	Results from operating activities [(3) - (4 + 5 + 6 + 7)]		2,199			8,311			(5,869	)		18,617			9,391			15,993
	Finance income		681			489			571			2,008			1,796			2,461
	Finance expense		(188	)		(252	)		(152	)		(673	)		(753	)		(983	)
9	Finance income, net		493			237			419			1,335			1,043			1,478
10	Share of profit of equity accounted investees, net of tax		151			73			176			301			456			561
11	Profit before tax (8 + 9 + 10)		2,843			8,621			(5,274	)		20,253			10,890			18,032
12	Tax expense/(benefit), net		2,645			998			423			6,639			(966	)		(1,466	)
13	Profit for the period / year (11 -12)		198			7,623			(5,697	)		13,614			11,856			19,498
14	Earnings per share:
	Basic earnings per share of Rs.5/- each		1.19			45.96			(34.37	)		82.08			71.53			117.63
	Diluted earnings per share of Rs.5/- each		1.19			45.83			(34.37	)		81.85			71.40			117.40
			(Not annualised)			(Not annualised)			(Not annualised)			(Not annualised)			(Not annualised)

 

 

Segment reporting (consolidated)

All amounts in Indian Rupees millions

		Quarter ended							Nine months ended				Year ended
Sl. No.	Particulars	31.12.2020		30.09.2020		31.12.2019			31.12.2020		31.12.2019		31.03.2020
		(Unaudited)		(Unaudited)		(Unaudited)			(Unaudited)		(Unaudited)		(Audited)
	Segment wise revenue and results:
1	Segment revenue:
	a) Pharmaceutical Services and Active Ingredients		8,745		10,256		8,549			29,091		22,984		31,657
	b) Global Generics		40,751		39,841		35,927			115,667		101,725		138,123
	c) Proprietary Products		124		100		241			280		7,947		7,949
	d) Others		1,412		521		764			2,424		2,058		2,781
	Total		51,032		50,718		45,481			147,462		134,714		180,510
	Less: Inter-segment revenues		1,736		1,751		1,643			5,024		4,432		5,910
	Net revenues		49,296		48,967		43,838			142,438		130,282		174,600
2	Segment results:
	Gross profit from each segment
	a) Pharmaceutical Services and Active Ingredients		1,773		2,284		2,072			6,913		4,147		6,190
	b) Global Generics		23,454		23,685		20,910			68,665		58,117		78,449
	c) Proprietary Products		100		88		246			244		7,751		7,744
	d) Others		1,211		352		494			1,880		1,186		1,626
	Total		26,538		26,409		23,722			77,702		71,201		94,009
	Less: Selling and other un-allocable expenditure, net of other income		23,695		17,788		28,996			57,449		60,311		75,977
	Total profit before tax		2,843		8,621		(5,274	)		20,253		10,890		18,032

Global Generics segment includes operations of Biologics business. Inter-segment revenues represent sale from Pharmaceutical Services and Active Ingredients to Global Generics at cost.

Notes:

1 The unaudited results have been reviewed by the Audit Committee of the Board on 28 January 2021 and approved by the Board of Directors of the Company at their meeting held on 29 January 2021. The above financial results have been prepared in accordance with International Financial Reporting Standards and its interpretations (IFRS), as issued by the International Accounting Standards Board (IASB).

2 During the quarter ended 31 December 2020, there were significant changes to the market conditions for certain of the products forming part of Company’s Global Generics and Proprietary Products segments. The changes include the launch by competitor of generic version of the product, decrease in the market potential of products primarily due to higher than expected price erosion and increased competition, and higher than expected value erosion. Due to these adverse market developments, the Company recorded an impairment loss of:

- Rs. 3,180 million relating to Ethinyl estradiol / Ethenogestral vaginal ring (a generic equivalent to NuvaRing®);

- Rs. 1,587 million relating to Saxagliptin and metformin (generic version of Kombiglyze-XR) and Phentermine and Topiramate (generic version of Qsymia®); and

- Rs. 1,159 million relating to other intangible assets forming part of the Company's Global Generics and Proprietary Products segments.

In addition, an amount of Rs. 46 million was recorded as impairment loss pertaining to property, plant and equipment on write-down of assets to fair value less costs to sell forming part of Company’s Global generics segment.

3 During the quarter ended 31 December 2020, the Company entered into a definitive agreement with Glenmark Pharmaceuticals Ltd. to acquire, certain brands in various Emerging Market countries for a total consideration of Rs. 1,516 million. The said transaction was accounted for as an acquisition of product related intangibles.

4 Impairment expense of Rs. 781 million for the quarter ended 30 September 2020 comprises of:

- Rs. 728 million pertaining to product related intangible forming part of Company’s Proprietary Segment due to decrease in the market potential for the product;

- Rs. 53 million pertaining to certain product related intangibles forming part of Company’s Global generics Segment due to Company’s decision to discontinue their further development.

5 Tax expense for the quarter ended 30 September 2020 includes benefit on account of recognition of deferred tax asset amounting to Rs. 1,012 million pursuant to a planned restructuring activity between the Group companies. The said restructuring activity was concluded during the quarter ended 31 December 2020.

6 On 10 June 2020, the Company completed the acquisition of select divisions of Wockhardt Limited's branded generics business in India and the territories of Nepal, Sri Lanka, Bhutan and Maldives. The business comprises a portfolio of 62 brands in multiple therapy areas, such as respiratory, neurology, venous malformations, dennatology, gastroenterology, pain, and vaccines. This entire portfolio has been transferred to the Company, along with related sales and marketing teams, the manufacturing plant located in Baddi, Himachal Pradesh, and employees. During the quarter ended 30 September 2020, the Company completed the purchase price allocation. The fair value of consideration transferred is Rs.16,115 million. The Company recognised Rs. 373 million, Rs. 14,888 million and Rs. 530 million towards property, plant and equipment, intangible assets, and goodwill, respectively. The acquisition pertains to Company's Global Generics segment.

7 "Revenues" for the year ended 31 March 2020 include an amount of Rs. 7,486 million (U.S.$108.7 million) towards license fee for selling US and select territory rights for ZEMBRACE^® SYMTOUCH^® (sumatriptan injection) 3 mg and TOSYMRA^® (sumatriptan nasal spray) 10 mg, (formerly referred to as “DFN-02”) to Upsher-Smith Laboratories, LLC. The costs associated with this transaction are Rs. 328 million.

8 "Other income, net" for the year ended 31 March 2020 includes an amount of Rs. 3,457 million received from Celgene, pursuant to a settlement agreement entered in April 2019. The agreement effectively settles any claim the Company or its affiliates may have had for damages under section 8 of the Canadian Patented Medicines (Notice of Compliance) Regulations in regard to the Company’s ANDS for a generic version of REVLIMID brand capsules, (Lenalidomide) pending before Health Canada.

9 Total impairment charge for the year ended 31 March 2020 is Rs. 16,767 million, of which Rs. 11,137 million was towards impairment of gNuvaring, Rs. 4,385 million was towards ramelteon, tobramycin and imiquimod, and the balance is towards other product related intangibles forming part of Company’s Global generics and Proprietary Products segments.

10 Tax benefit for the year ended 31 March 2020 was primarily due to recognition of deferred tax asset of:

- Rs. 4,989 million towards MAT recoverable pursuant to enactment of Taxation Laws (Amendment) Act, 2019;

- Rs. 1,264 million pursuant to a planned restructuring activity between the group Companies.

 

 

11 The Code on Social Security, 2020 (‘Code’) received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the related final rules have not yet been issued and the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code and the rules thereunder when they come into effect.

12 On 22 October 2020, the Company experienced a cybersecurity incident related to ransomware. The Company could contain the incident in a timely fashion and has also ensured that all traces of the infection are completely cleaned from the network. All affected systems were restored and brought back to normalcy in the order of priority. Based on our forensic investigation, no evidence was found of any data breaches leading to personally identifiable information. Since then, the Company has also been focused on implementing significant improvements to its cyber and data security systems to safeguard from such risks in the future.

13 The Company continues to consider the impact of COVID-19 pandemic in assessing the recoverability of receivables, goodwill, intangible assets, and certain investments. For this purpose, the Company considered internal and external sources of information up to the date of approval of these financial results. The Company based on its judgements, estimates and assumptions including sensitivity analysis expects to fully recover the carrying amount of receivables, goodwill, intangible assets, investments and other assets.The Company will continue to closely monitor any material changes to future economic conditions.

14 The unaudited results were reviewed by the Audit Committee of the Board at their meeting held on 28 January 2021 and approved by the Board of Directors of the Company at their meeting held on 29 January 2021.

15 The results for the quarter and nine months ended 31 December 2020 were subjected to a "Limited Review". An unqualified report was issued thereon.

By order of the Board

For Dr. Reddy's Laboratories Limited

Place: Hyderabad	G V Prasad
Date:  29 January 2021	Co-Chairman & Managing Director

EX-99.3

Exhibit 99.3

S.R. Batliboi & Associates LLP Chartered Accountants THE SKYVIEW 10
18th Floor, “NORTH LOBBY” Survey No. 83/1, Raidurgam Hyderabad - 500 032, India Tel : +91 40 6141 6000

Independent Auditor’s Review Report on the Quarterly and Year to Date Unaudited Consolidated Financial Results of the Company Pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended

Review Report to

The Board of Directors

Dr. Reddy’s Laboratories Limited

1. We have reviewed the accompanying Statement of Unaudited Consolidated Financial Results of Dr. Reddy’s Laboratories Limited (the “Holding Company”) and its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”), and its joint ventures for the quarter ended December 31, 2020 and year to date from April 01, 2020 to December 31, 2020 (the “Statement”) attached herewith, being submitted by the Holding Company pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (the “Listing Regulations”).

2. This Statement, which is the responsibility of the Holding Company’s Management and approved by the Holding Company’s Board of Directors, has been prepared in accordance with the recognition and measurement principles laid down in Indian Accounting Standard 34, (Ind AS 34) “Interim Financial Reporting” prescribed under Section 133 of the Companies Act, 2013 as amended, read with relevant rules issued thereunder and other accounting principles generally accepted in India. Our responsibility is to express a conclusion on the Statement based on our review.

3. We conducted our review of the Statement in accordance with the Standard on Review Engagements (SRE) 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Institute of Chartered Accountants of India. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the Statement is free of material misstatement. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We also performed procedures in accordance with the Circular No. CIR/CFD/CMD1/44/2019 dated March 29, 2019 issued by the Securities and Exchange Board of India under Regulation 33(8) of the Listing Regulations, to the extent applicable.

4. The Statement includes the results of the following entities:

S.No       Name of the Company  

Subsidiaries:

1. Aurigene Discovery Technologies Limited

2. Cheminor Investments Limited

3. Dr. Reddy’s Bio-Sciences Limited

4. Dr. Reddy’s Farmaceutica Do Brasil Ltda.

5. Dr. Reddy’s Laboratories SA

6. Idea2Enterprises (India) Private Limited

7. Imperial Credit Private Limited

8. Industrias Quimicas Falcon de Mexico, S.A.de C.V.

9. Reddy Antilles N.V. (till 02 November, 2019)

 

S.R. Batliboi & Associates LLP, a Limited Liability Partnership with LLP Identity No. AAB-4295

Regd. Office : 22, Camac Street, Block ‘B’, 3rd floor, Kolkata 700 016

S.R. Batliboi & Associates LLP

Chartered Accountants

10. Svaas Wellness Limited (formerly ‘Regkinetics Services Limited’ name changed effective December 18, 2020)

11. Aurigene Discovery Technologies (Malaysia) SDN BHD

12. Aurigene Discovery Technologies Inc.

13. Aurigene Pharmaceutical Services Limited (from 16 September 2019)

14. beta Institut gemeinnützige GmbH

15. betapharm Arzneimittel GmbH

16. Chirotech Technology Limited

17. DRL Impex Limited

18. Dr. Reddy’s Laboratories (Australia) Pty. Limited

19. Dr. Reddy’s Laboratories Canada, Inc.

20. Dr. Reddy’s Laboratories Chile SPA.

21. Dr. Reddy’s Laboratories (EU) Limited

22. Dr. Reddy’s Laboratories Inc.

23. Dr. Reddy’s Laboratories Japan KK

24. Dr. Reddy’s Laboratories Kazakhstan LLP

25. Dr. Reddy’s Laboratories LLC

26. Dr. Reddy’s Laboratories Louisiana LLC

27. Dr. Reddy’s Laboratories Malaysia Sdn. Bhd.

28. Dr. Reddy’s Laboratories New York, LLC

29. Dr. Reddy’s Laboratories Philippines Inc.

30. Dr. Reddy’s Laboratories (Proprietary) Limited

31. Dr. Reddy’s Laboratories Romania S.R.L.

32. Dr. Reddy’s Laboratories SAS

33. Dr. Reddy’s Laboratories Taiwan Limited

34. Dr. Reddy’s Laboratories (Thailand) Limited

35. Dr. Reddy’s Laboratories (UK) Limited

36. Dr. Reddy’s Research and Development B.V.

37. Dr. Reddy’s Singapore PTE Limited (till 04 June, 2019)

38. Dr. Reddy’s Srl

39. Dr. Reddy’s New Zealand Limited

40. Dr. Reddy’s (WUXI) Pharmaceutical Co. Limited

41. Dr. Reddy’s Venezuela, C.A.

42. Dr. Reddy’s Laboratories B.V. (Formerly Eurobridge Consulting B.V.)

43. Lacock Holdings Limited

44. OOO Dr. Reddy’s Laboratories Limited

45. OOO DRS LLC

46. Promius Pharma LLC

47. Reddy Holding GmbH

48. Reddy Netherlands B.V.

49. Reddy Pharma Iberia SA

50. Reddy Pharma Italia S.R.L

51. Reddy Pharma SAS

52. Dr. Reddy’s (Beijing) Pharmaceutical Co. Limited (from August 19, 2020)

Joint Ventures:

1. DRANU LLC

2. DRES Energy Private Limited

3. Kunshan Rotam Reddy Pharmaceutical Company Limited

Other Consolidating entities:

1. Cheminor Employees Welfare Trust

2. Dr. Reddy’s Employees ESOS Trust

3. Dr. Reddy’s Research Foundation

 

S.R. Batliboi & Associates LLP

Chartered Accountants

5. Based on our review conducted and procedures performed as stated in paragraph 3 nothing has come to our attention that causes us to believe that the accompanying Statement, prepared in accordance with recognition and measurement principles laid down in the aforesaid Indian Accounting Standards (‘Ind AS’) specified under Section 133 of the Companies Act, 2013, as amended, read with relevant rules issued thereunder and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of the Listing Regulations, including the manner in which it is to be disclosed, or that it contains any material misstatement.

For S.R. BATLIBOI & ASSOCIATES LLP

Chartered Accountants

ICAI Firm registration number: 101049W/E300004

  per Navneet Rai Kabra Partner Membership No.: 102328

UDIN: 21102328AAAAAU4019

Hyderabad

January 29, 2021

Dr. Reddy’s Laboratories Ltd. 8-2-337, Road No. 3, Banjara Hills, Hyderabad - 500 034, Telangana,
India. CIN : L85195TG1984PLC004507   Tel      :+91 40 4900 2900 Fax     :+91 40 4900 2999 Email :mail@drreddys.com www.drreddys.com

DR. REDDY’S LABORATORIES LIMITED

STATEMENT OF UNAUDITED CONSOLIDATED FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED 31 DECEMBER 2020

All amounts in Indian Rupees millions 

		Quarter ended									Nine months ended						Year ended
Sl. No.	Particulars	31.12.2020			30.09.2020			31.12.2019			31.12.2020			31.12.2019			31.03.2020
		(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Audited)
1	Revenue from operations
	a) Net sales / income from operations		47,109			47,766			42,607			138,119			120,213			163,574
	b) License fees and service income		2,187			1,201			1,231			4,319			10,069			11,026
	c) Other operating income		123			142			133			355			399			570
	Total revenue from operations		49,419			49,109			43,971			142,793			130,681			175,170
2	Other income		705			512			673			2,088			5,470			6,206
3	Total income (1 + 2)		50,124			49,621			44,644			144,881			136,151			181,376
4	Expenses
	a) Cost of materials consumed		11,773			9,485			7,528			32,697			22,395			29,848
	b) Purchase of stock-in-trade		6,803			6,889			8,426			18,968			19,584			25,459
	c) Changes in inventories of finished goods, work-in-progress and stock-in-trade		(2,199	)		(573	)		(1,801	)		(6,291	)		(1,746	)		237
	d) Employee benefits expense		9,157			9,488			8,377			27,369			25,247			33,802
	e) Depreciation and amortisation expense		3,112			3,165			2,869			9,200			8,890			11,631
	f) Impairment of non-current assets		5,972			781			13,200			6,753			16,760			16,767
	g) Finance costs		188			252			152			673			753			983
	h) Selling and other expenses		12,520			11,478			11,128			35,130			33,229			44,353
			-
	Total expenses		47,326			40,965			49,879			124,499			125,112			163,080
5	Profit / (loss) before tax and before share of equity accounted investees(3 - 4)		2,798			8,656			(5,235	)		20,382			11,039			18,296
6	Share of profit of equity accounted investees, net of tax		151			73			176			301			456			561
7	Profit / (loss) before tax (5+6)		2,949			8,729			(5,059	)		20,683			11,495			18,857
8	Tax expense / (benefit):
	a) Current tax		1,902			1,724			1,736			6,792			6,199			6,616
	b) Deferred tax		768			(713	)		(1,411	)		(52	)		(7,153	)		(8,019	)
9	Net profit / (loss) after taxes and share of profit of associates (7 - 8)		279			7,718			(5,384	)		13,943			12,449			20,260
10	Other comprehensive income
	a) (i) Items that will not be reclassified subsequently to profit or loss		2,803			(26	)		(200	)		2,984			(86	)		(412	)
	(ii) Income tax relating to items that will not be reclassified to profit or loss		-			-			-			-			-			(22	)
	b) (i) Items that will be reclassified subsequently to profit or loss		930			258			606			1,919			563			(448	)
	(ii) Income tax relating to items that will be reclassified to profit or loss		(1	)		(138	)		48			(295	)		136			232
	Total other comprehensive income		3,732			94			454			4,608			613			(650	)
11	Total comprehensive income (9 + 10)		4,011			7,812			(4,930	)		18,551			13,062			19,610
12	Paid-up equity share capital (face value Rs. 5/- each)		831			831			831			831			831			831
13	Other equity																	155,157
14	Earnings per equity share (face value Rs. 5/- each)
	Basic		1.68			46.54			(32.48	)		84.07			75.11			122.22
	Diluted		1.67			46.40			(32.48	)		83.83			74.97			121.99
			(Not annualised)			(Not annualised)			(Not annualised)			(Not annualised)			(Not annualised)

See accompanying notes to the financial results

 

 

DR. REDDY’S LABORATORIES LIMITED

Segment Information All amounts in Indian Rupees millions

		Quarter ended							Nine months ended				Year ended
Sl. No.	Particulars	31.12.2020		30.09.2020		31.12.2019			31.12.2020		31.12.2019		31.03.2020
		(Unaudited)		(Unaudited)		(Unaudited)			(Unaudited)		(Unaudited)		(Audited)
	Segment wise revenue and results:
1	Segment revenue :
	a) Pharmaceutical Services and Active Ingredients		8,841		10,355		8,654			29,361		23,304		32,086
	b) Global Generics		40,778		39,882		35,956			115,752		101,804		138,264
	c) Proprietary Products		124		100		241			280		7,947		7,949
	d) Others		1,412		523		763			2,424		2,058		2,781
	Total		51,155		50,860		45,614			147,817		135,113		181,080
	Less: Inter-segment revenue		1,736		1,751		1,643			5,024		4,432		5,910
	Total revenue from operations		49,419		49,109		43,971			142,793		130,681		175,170
2	Segment results:
	Gross profit from each segment
	a) Pharmaceutical Services and Active Ingredients		1,776		2,292		2,079			6,927		4,169		6,219
	b) Global Generics		23,454		23,685		20,910			68,665		58,117		78,449
	c) Proprietary Products		100		88		246			244		7,751		7,744
	d) Others		1,211		352		492			1,880		1,184		1,626
	Total		26,541		26,417		23,727			77,716		71,221		94,038
	Less: Selling and other un-allocable expenditure/(income), net		23,592		17,688		28,786			57,033		59,726		75,181
	Total profit before tax		2,949		8,729		(5,059	)		20,683		11,495		18,857

Global Generics includes operations of Biologics business. Inter-segment revenue represents sale from Pharmaceutical Services and Active Ingredients to Global Generics at cost.

Segmental Capital employed

As certain assets of the Company including manufacturing facilities, development facilities and treasury assets and liabilities are often deployed interchangeably across segments, it is impractical to allocate these assets and liabilities to each segment. Hence, the details for capital employed have not been disclosed in the above table.

Notes:

1 These results have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules 2015 as amended.

2 During the quarter ended 31 December 2020, there were significant changes to the market conditions for certain of the products forming part of Company’s Global Generics and Proprietary Products segments. The changes include the launch by competitor of generic version of the product, decrease in the market potential of products primarily due to higher than expected price erosion and increased competition, and higher than expected value erosion. Due to these adverse market developments, the Company recorded an impairment loss of:
- Rs. 3,180 million relating to Ethinyl estradiol / Ethenogestral vaginal ring (a generic equivalent to NuvaRing®);
- Rs. 1,587 million relating to Saxagliptin and metformin (generic version of Kombiglyze-XR) and Phentermine and Topiramate (generic version of Qsymia®); and
- Rs. 1,159 million relating to other intangible assets forming part of the Company’s Global Generics and Proprietary Products segments.
In addition, an amount of Rs. 46 million was recorded as impairment loss pertaining to property, plant and equipment on write-down of assets to fair value less costs to sell forming part of Company’s Global generics segment.

3 During the quarter ended 31 December 2020, the Company entered into a definitive agreement with Glenmark Pharmaceuticals Ltd. to acquire, certain brands in various Emerging Market countries for a total consideration of Rs. 1,516 million. The said transaction was accounted for as an acquisition of product related intangibles.

4 Impairment expense of Rs. 781 million for the quarter ended 30 September 2020 comprises of:
- Rs. 728 million pertaining to product related intangible forming part of Company’s Proprietary Segment due to decrease in the market potential for the product;
- Rs. 53 million pertaining to certain product related intangibles forming part of Company’s Global generics Segment due to Company’s decision to discontinue their further development.

5 Tax expense for the quarter ended 30 September 2020 includes benefit on account of recognition of deferred tax asset amounting to Rs. 1,012 million pursuant to a planned restructuring activity between the Group companies. The said restructuring activity was concluded during the quarter ended 31 December 2020.

6 On 10 June 2020, the Company completed the acquisition of select divisions of Wockhardt Limited’s branded generics business in India and the territories of Nepal, Sri Lanka, Bhutan and Maldives. The business comprises a portfolio of 62 brands in multiple therapy areas, such as respiratory, neurology, venous malformations, dennatology, gastroenterology, pain, and vaccines. This entire portfolio has been transferred to the Company, along with related sales and marketing teams, the manufacturing plant located in Baddi, Himachal Pradesh, and employees. During the quarter ended 30 September 2020, the Company completed the purchase price allocation. The fair value of consideration transferred is Rs.16,115 million. The Company recognised Rs. 373 million, Rs. 14,888 million and Rs. 530 million towards property, plant and equipment, intangible assets, and goodwill, respectively. The acquisition pertains to Company’s Global Generics segment.

7 “Revenue from operations” for the year ended 31 March 2020 includes an amount of Rs. 7,486 million (U.S.$108.7 million) towards license fee for selling US and select territory rights for ZEMBRACE^® SYMTOUCH^® (sumatriptan injection) 3 mg and TOSYMRA^® (sumatriptan nasal spray) 10 mg, (formerly referred to as “DFN-02”) to Upsher-Smith Laboratories, LLC. The costs associated with this transaction are Rs. 328 million.

8 “Other income” for the year ended 31 March 2020 includes an amount of Rs. 3,457 million received from Celgene, pursuant to a settlement agreement entered in April 2019. The agreement effectively settles any claim the Company or its affiliates may have had for damages under section 8 of the Canadian Patented Medicines (Notice of Compliance) Regulations in regard to the Company’s ANDS for a generic version of REVLIMID brand capsules, (Lenalidomide) pending before Health Canada.

 

 

DR. REDDY’S LABORATORIES LIMITED

9 Total impairment charge for the year ended 31 March 2020 is Rs. 16,767 million, of which Rs. 11,137 million was towards impairment of gNuvaring, Rs. 4,385 million was towards ramelteon, tobramycin and imiquimod, and the balance is towards other product related intangibles forming part of Company’s Global generics and Proprietary Products segments.

10 Tax benefit for the year ended 31 March 2020 was primarily due to recognition of deferred tax asset of:
- Rs. 4,989 million towards MAT recoverable pursuant to enactment of Taxation Laws (Amendment) Act, 2019;
- Rs. 1,264 million pursuant to a planned restructuring activity between the group Companies.

11 The Code on Social Security, 2020 (‘Code’) received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the related final rules have not yet been issued and the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code and the rules thereunder when they come into effect.

12 On 22 October 2020, the Company experienced a cybersecurity incident related to ransomware. The Company could contain the incident in a timely fashion and has also ensured that all traces of the infection are completely cleaned from the network. All affected systems were restored and brought back to normalcy in the order of priority. Based on our forensic investigation, no evidence was found of any data breaches leading to personally identifiable information. Since then, the Company has also been focused on implementing significant improvements to its cyber and data security systems to safeguard from such risks in the future.

13 The Company continues to consider the impact of COVID-19 pandemic in assessing the recoverability of receivables, goodwill, intangible assets, and certain investments. For this purpose, the Company considered internal and external sources of information up to the date of approval of these financial results. The Company based on its judgements, estimates and assumptions including sensitivity analysis expects to fully recover the carrying amount of receivables, goodwill, intangible assets, investments and other assets.The Company will continue to closely monitor any material changes to future economic conditions.

14 The unaudited results were reviewed by the Audit Committee of the Board at their meeting held on 28 January 2021 and approved by the Board of Directors of the Company at their meeting held on 29 January 2021.

15 The results for the quarter and nine months ended 31 December 2020 were subject to a “Limited Review” by the Statutory Auditors of the Company. An unqualified report has been issued by them thereon.

By order of the Board

For Dr. Reddy’s Laboratories Limited

Place: Hyderabad	G V Prasad
Date: 29 January 2021	Co-Chairman & Managing Director

EX-99.4

Exhibit 99.4

S.R. Batliboi & Associates LLP Chartered Accountants THE SKYVIEW 10 18th Floor, “NORTH LOBBY” Survey No. 83/1, Raidurgam Hyderabad - 500 032, India Tel : +91 40 6141 6000

Independent Auditor’s Review Report on the Quarterly and Year to Date Unaudited Standalone Financial Results of the Company Pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended

Review Report to

The Board of Directors

Dr. Reddy’s Laboratories Limited

1. We have reviewed the accompanying statement of unaudited standalone financial results of Dr. Reddy’s Laboratories Limited (the “Company”) for the quarter ended December 31, 2020 and year to date from April 01, 2020 to December 31, 2020 (the “Statement”) attached herewith, being submitted by the Company pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (the “Listing Regulations”).

2. This Statement, which is the responsibility of the Company’s Management and approved by the Company’s Board of Directors, has been prepared in accordance with the recognition and measurement principles laid down in Indian Accounting Standard 34, (Ind AS 34) “Interim Financial Reporting” prescribed under Section 133 of the Companies Act, 2013 as amended, read with relevant rules issued thereunder and other accounting principles generally accepted in India. Our responsibility is to express a conclusion on the Statement based on our review.

3. We conducted our review of the Statement in accordance with the Standard on Review Engagements (SRE) 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Institute of Chartered Accountants of India. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the Statement is free of material misstatement. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

4. Based on our review conducted as above, nothing has come to our attention that causes us to believe that the accompanying Statement, prepared in accordance with the recognition and measurement principles laid down in the aforesaid Indian Accounting Standards (‘Ind AS’) specified under Section 133 of the Companies Act, 2013 as amended, read with relevant rules issued thereunder and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of the Listing Regulations, including the manner in which it is to be disclosed, or that it contains any material misstatement.

For S.R. BATLIBOI & ASSOCIATES LLP

Chartered Accountants

ICAI Firm registration number: 101049W/E300004

per Navneet Rai Kabra Partner Membership No.: 102328   UDIN: 21102328AAAAAV6613   Place: Hyderabad Date: January 29, 2021

S.R. Batliboi & Associates LLP, a Limited Liability Partnership with LLP Identity No. AAB-4295

Regd. Office: 22, Camac Street, Block ‘B’, 3rd Floor, Kolkata 700 016

Dr. Reddy’s Laboratories Ltd. 8-2-337, Road No. 3, Banjara Hills, Hyderabad - 500 034, Telangana, India. CIN : L85195TG1984PLC004507   Tel :+91 40 4900 2900 Fax :+91 40 4900 2999 Email :mail@drreddys.com www.drreddys.com

DR. REDDY’S LABORATORIES LIMITED

STATEMENT OF UNAUDITED STANDALONE FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED 31 DECEMBER 2020

		All amounts in Indian Rupees millions
Sl.		Quarter ended									Nine months ended						Year ended
No.	Particulars	31.12.2020			30.09.2020			31.12.2019			31.12.2020			31.12.2019			31.03.2020
		(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Audited)
1	Revenue from operations
	a) Net sales / income from operations		33,818			33,233			29,864			99,315			81,730			109,925
	b) License fees and service income		157			103			458			364			7,921			8,105
	c) Other operating income		107			122			118			305			336			474
	Total revenue from operations		34,082			33,458			30,440			99,984			89,987			118,504
2	Other income		628			266			693			7,195			6,158			7,432
	Total income (1 + 2)		34,710			33,724			31,133			107,179			96,145			125,936
3	Expenses
	a) Cost of materials consumed		8,453			8,165			6,730			24,500			19,022			25,565
	b) Purchase of stock-in-trade		3,211			3,043			3,461			9,257			8,911			11,172
	c) Changes in inventories of finished goods, work-in-progress and stock-in-trade		(877	)		(1,358	)		(1,001	)		(4,164	)		(1,671	)		(999	)
	d) Employee benefits expense		5,715			6,080			5,112			17,245			15,136			20,302
	e) Depreciation and amortisation expense		2,124			2,142			1,958			6,243			5,969			7,892
	f) Finance costs		65			93			117			298			360			478
	g) Selling and other expenses		9,840			9,362			8,581			27,807			25,101			33,768
	Total expenses		28,531			27,527			24,958			81,186			72,828			98,178
4	Profit  before tax (1 + 2 - 3)		6,179			6,197			6,175			25,993			23,317			27,758
5	Tax expense / (benefit)
	a) Current tax		1,108			1,114			1,092			4,613			4,149			4,839
	b) Deferred tax		634			273			(134	)		2,631			(5,181	)		(6,458	)
6	Net profit for the period / year (4 - 5)		4,437			4,810			5,217			18,749			24,349			29,377
7	Other comprehensive income
	a)    (i) Items that will not be reclassified to profit or loss		6			-			4			5			3			88
	(ii) Income tax relating to items that will not be reclassified to profit or loss		-			-			-			-			-			(33	)
	b)    (i) Items that will be reclassified to profit or loss		136			420			(33	)		916			(286	)		(750	)
	(ii) Income tax relating to items that will be reclassified to profit or loss		(33	)		(157	)		12			(318	)		98			259
	Total other comprehensive income		109			263			(17	)		603			(185	)		(436	)
8	Total comprehensive income (6 + 7)		4,546			5,073			5,200			19,352			24,164			28,941
9	Paid-up equity share capital (face value Rs. 5/- each)		831			831			831			831			831			831
10	Other equity																	151,088
11	Earnings per equity share (face value Rs. 5/- each)
	Basic		26.74			29.00			31.47			113.05			146.89			177.23
	Diluted		26.66			28.92			31.42			112.73			146.62			176.88
			(Not annualised)			(Not annualised)			(Not annualised)			(Not annualised)			(Not annualised)

See accompanying notes to the financial results.

DR. REDDY’S LABORATORIES LIMITED

Segment information		All amounts in Indian Rupees millions
		Quarter ended								Nine months ended					Year ended
Sl.	Particulars	31.12.2020			30.09.2020			31.12.2019		31.12.2020			31.12.2019		31.03.2020
No.		(Unaudited)			(Unaudited)			(Unaudited)		(Unaudited)			(Unaudited)		(Audited)
	Segment wise revenue and results
1	Segment revenue
	a) Pharmaceutical Services and Active Ingredients		7,763			7,996			7,106		24,465			19,623		26,996
	b) Global Generics		27,970			27,112			24,680		80,323			67,168		89,774
	c) Proprietary Products		85			101			296		220			7,628		7,644
	Total		35,818			35,209			32,082		105,008			94,419		124,414
	Less: Inter-segment revenue		1,736			1,751			1,642		5,024			4,432		5,910
	Total revenue from operations		34,082			33,458			30,440		99,984			89,987		118,504
2	Segment results
	Profit / (loss) before tax and interest from each segment
	a) Pharmaceutical Services and Active Ingredients		428			145			957		6,259			1,027		1,465
	b) Global Generics		6,447			5,674			6,193		20,363			17,913		22,116
	c) Proprietary Products		(220	)		(281	)		92		(675	)		6,622		6,525
	Total		6,655			5,538			7,242		25,947			25,562		30,106
	Less: (i) Finance costs		65			93			117		298			360		478
	(ii) Other un-allocable expenditure / (income), net		411			(752	)		950		(344	)		1,885		1,870
	Total profit before tax		6,179			6,197			6,175		25,993			23,317		27,758

Global Generics includes operations of Biologics business. Inter-segment revenue represents sale from Pharmaceutical Services and Active Ingredients to Global Generics at cost.

Segmental capital employed

As certain assets of the Company including manufacturing facilities, development facilities and treasury assets and liabilities are often deployed interchangeably across segments, it is impractical to allocate these assets and liabilities to each segment. Hence, the details for capital employed have not been disclosed in the above table.

Notes:

1 These results have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules 2015 as amended.

2 During the three months ended 31 December, 2020 there were significant changes to the market conditions for certain products forming part of Company’s Global Generics segments. The changes include decrease in the market potential of products primarily due to higher than expected price erosion, increased competition and higher than expected value erosion. Due to these adverse market developments, the Company recorded an impairment loss of Rs.97 million for the quarter ended 31 December, 2020

Consequent to the company’s decision to discontinue the development of certain product related intangibles in the Company’s Global Generics segment, an amount of Rs.53 million is recognised as impairment charge for the quarter ended 30 September, 2020

3 During the three months ended 31 December, 2020, the Company entered into a definitive agreement with Glenmark Pharmaceuticals Ltd. to acquire certain brands in various Emerging Market countries for a total consideration of Rs. 1,516 million. The said transaction was accounted for as an acquisition of product related intangibles.

4 On 10 June 2020, the Company completed the acquisition of select divisions of Wockhardt Limited’s branded generics business in India and the territories of Nepal, Sri Lanka, Bhutan and Maldives. The business comprises a portfolio of 62 brands in multiple therapy areas, such as respiratory, neurology, venous malformations, dennatology, gastroenterology, pain, and vaccines. This entire portfolio has been transferred to the Company, along with related sales and marketing teams, the manufacturing plant located in Baddi, Himachal Pradesh, and employees. During the quarter ended 30 September 2020, the Company completed the purchase price allocation. The fair value of consideration transferred is Rs.16,115 million. The Company recognised Rs. 373 million, Rs. 14,888 million and Rs. 530 million towards property, plant and equipment, intangible assets, and goodwill, respectively. The acquisition pertains to Company’s Global Generics segment.

5 “Revenue from operations” for the year ended 31 March 2020 includes an amount of Rs. 7,486 million (U.S.$108.7 million), respectively, towards license fee for selling US and select territory rights for ZEMBRACE^® SYMTOUCH^® (sumatriptan injection) 3 mg and TOSYMRA^® (sumatriptan nasal spray) 10 mg, (formerly referred to as “DFN-02”) to Upsher-Smith Laboratories, LLC. The costs associated with this transaction are Rs. 328 million.

6 “Other income” for the year ended 31 March 2020 includes an amount of Rs. 3,457 million received from Celgene, pursuant to a settlement agreement entered in April 2019. The agreement effectively settles any claim the Company or its affiliates may have had for damages under section 8 of the Canadian Patented Medicines (Notice of Compliance) Regulations in regard to the Company’s ANDS for a generic version of REVLIMID brand capsules, (Lenalidomide) pending before Health Canada.

7 During the quarter ended 30 September 2019, the Government of India promulgated the Taxation Laws (Amendment) Ordinance 2019 (enacted into Taxation laws (Amendment) Act 2019), announcing key changes to corporate tax rates in the Income-tax Act, 1961. The key changes include, among others, reduction of MAT rate from 21.55% to 17.47% (including surcharge and cess). As a result of this, the Company reassessed the MAT recoverability and recognised an amount of Rs. 4,989 million as deferred tax asset during the quarter ended 30 September 2019.

During the quarter ended 31 March 2020, the Company recognised deferred tax benefit of Rs. 1,264 million pursuant to a plan for restructuring of the Company’s pharmaceutical services in India.

8 The Code on Social Security, 2020 (‘Code’) received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the related final rules have not yet been issued and the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code and the rules thereunder when they come into effect.

9 On 22 October 2020, the Company experienced a cybersecurity incident related to ransomware. The company could contain the incident in a timely fashion and has also ensured that all traces of the infection are completely cleaned from the network. All affected systems were restored and brought back to normalcy in the order of priority. Based on our forensic investigation, no evidence was found of any data breaches leading to personally identifiable information. Since then, the Company has also been focused on implementing significant improvements to its cyber and data security systems to safeguard from such risks in the future.

10 The Company continues to consider the impact of COVID-19 pandemic in assessing the recoverability of receivables, goodwill, intangible assets, and certain investments. For this purpose, the Company considered internal and external sources of information up to the date of approval of these financial results. The Company based on its judgements, estimates and assumptions including sensitivity analysis expects to fully recover the carrying amount of receivables, goodwill, intangible assets, investments and other assets. The Company will continue to closely monitor any material changes to future economic conditions.

DR. REDDY’S LABORATORIES LIMITED

11 The unaudited results were reviewed by the Audit Committee of the Board at their meeting held on 28 January 2021 and approved by the Board of Directors of the Company at their meeting held on 29 January 2021.

12 The results for the quarter and nine months ended 31 December 2020 presented were subjected to a “Limited review” by the Statutory Auditors of the Company. An unqualified report was issued by them thereon.

Place: Hyderabad Date: 29 January 2021 By order of the Board For Dr. Reddy’s Laboratories Limited     G V Prasad Co-Chairman & Managing Director