UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

¨ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

R ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended March 31, 2025

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

¨ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 1-15182

DR. REDDY’S LABORATORIES LIMITED

(Exact name of Registrant as specified in its charter)

Not Applicable	Telangana, India
(Translation of Registrant’s name	(Jurisdiction of incorporation or
into English)	organization)

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

Hyderabad, Telangana 500 034, India

+91-40-49002900

(Address of principal executive offices)

M.V. Narasimham, Chief Financial Officer, +91-40-66022564, narasimhammv@drreddys.com

8-2-337, Road No. 3, Banjara Hills, Hyderabad, Telangana 500 034, India

(Name, telephone, e-mail and/or facsimile number and address of company contact person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of Each Class	Trading Symbol	Name of Each Exchange on which Registered
American depositary shares, each	RDY	New York Stock Exchange
representing one equity share

Equity Shares*

* Not for trading, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission.

Securities registered or to be registered pursuant to Section 12(g) of the Act. None.

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act. None.

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

834,455,365 Equity Shares

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes R No ¨

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes ¨ No R

Note — Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes R No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes R No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth company. See the definitions of “accelerated filer”, “large accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer R Accelerated filer ¨ Non-accelerated filer ¨ Emerging growth company ¨    

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ¨

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  R

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ¨

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ¨

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ¨ International Financial Reporting Standards as issued  by the International Accounting Standards Board R Other ¨

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

Item 17 ¨ Item 18 ¨

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).

Yes  No R

Currency of Presentation and Certain Defined Terms

In this annual report on Form 20-F, references to “$” or “U.S.$” or “dollars” or “U.S. dollars” are to the legal currency of the United States and references to “Rs.” or “rupees” or “Indian rupees” or “INR” are to the legal currency of India, references to “MXN” are to the legal currency of Mexico, references to “ZAR” are to the legal currency of South Africa, references to “UAH” are to the legal currency of Ukraine, references to “GBP” are to the legal currency of the United Kingdom, references to “RUB” or “rouble” or “ruble” are to the legal currency of the Russian Federation, references to “EUR” or “euros” are to the legal currency of the European Union and references to “CAD” are to the legal currency of Canada. Our financial statements are prepared in accordance with International Financial Reporting Standards, or “IFRS”, as issued by the International Accounting Standards Board, or “IASB”. These standards include International Accounting Standards, or “IAS”, and their interpretations issued by the International Financial Reporting Interpretations Committee, or “IFRIC”, or its predecessor, the Standing Interpretations Committee, or “SIC”. References to a particular “fiscal” year are to our fiscal year ended March 31 of such year. References to our “ADSs” are to our American Depositary Shares. References to “OCI” are to other comprehensive income, to “FVTOCI” are to fair value through other comprehensive income, to “FVTPL” are to fair value through profit and loss and to “NCI” are to non-controlling interests.

References to “U.S. FDA” are to the United States Food and Drug Administration, to “ANDS” are to Abbreviated New Drug Submissions, to “NDAs” are to New Drug Applications, to “ANDAs” are to Abbreviated New Drug Applications, to “BLAs” are to Biologics License Applications, to “INDs” are to Investigational New Drug Applications, to “MAAs” are to Marketing Authorization Applications and to “NDSs” are to New Drug Submissions. References to the “SEC” are to the U.S. Securities and Exchange Commission.

References to “U.S.” or “United States” are to the United States of America, its territories and its possessions. References to “India” are to the Republic of India. References to “EU” are to the European Union. All references to “we,” “us”, “our”, “DRL”, “Dr. Reddy’s” or the “Company” shall mean Dr. Reddy’s Laboratories Limited and its subsidiaries. “Dr. Reddy’s” is a registered trademark of Dr. Reddy’s Laboratories Limited in India. Other trademarks or trade names used in this annual report on Form 20-F are trademarks registered in the name of Dr. Reddy’s Laboratories Limited or are pending before the respective trademark registries, unless otherwise specified. Market share data is based on information provided by IQVIA Holdings Inc. (formerly Quintiles IMS Holdings Inc.) (“IQVIA”), a provider of market research to the pharmaceutical industry, unless otherwise stated. References to “HUF” are to a Hindu Undivided Family, a form of entity found in India among related family members.

Our financial statements are presented in Indian rupees and translated into U.S. dollars for the convenience of the reader. Except as otherwise stated in this report, all convenience translations from Indian rupees to U.S. dollars are at the certified foreign exchange rate of U.S.$1 = Rs.85.43, as published by Federal Reserve Board of Governors on March 31, 2025. No representation is made that the Indian rupee amounts have been, could have been or could be converted into U.S. dollars at such a rate or any other rate. Any discrepancies in any table between totals and sums of the amounts listed are due to rounding.

Our main corporate website address is https://www.drreddys.com. Information contained in our website, www.drreddys.com, is not part of this Annual Report and no portion of such information is incorporated herein.

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Forward-Looking Statements and Risk Factor Summary

In addition to historical information, this annual report, and the reports and documents incorporated by reference in this annual report, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). 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. The forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, risks relating to:

· our business and operations in general, including: our ability to develop and commercialize additional pharmaceutical products; manufacturing, safety or quality control problems, which may damage our reputation for quality production and require costly remediation; interruptions in our supply chain; disruptions of our or third party information technology systems or breaches of our data security or other cyber-attacks; the failure to recruit or retain key personnel; significant sales to a limited number of customers in our U.S. market; and our ability to successfully undertake licensing opportunities;

· our generics medicines business, including: consolidation of our customer base and commercial alliances among our customers; the increase in the number of competitors targeting generic opportunities and seeking U.S. market exclusivity for generic versions of significant products; price erosion relating to our generic products, both from competing products and increased regulation; delays in launches of new generic products; efforts of pharmaceutical companies to limit the use of generics including through legislation and regulations; the difficulty and expense of obtaining licenses to proprietary technologies; and returns, allowances and chargebacks;

· compliance, regulatory and litigation matters, including: uncertainties regarding actual or potential legal proceedings; costs and delays resulting from the extensive governmental regulation to which we are subject; the effects of reforms in healthcare regulation and reductions in pharmaceutical pricing, reimbursement and coverage; governmental investigations into selling and marketing practices; potential liability for patent infringement; product liability claims; increased government scrutiny of our patent settlement agreements; failure to comply with complex Medicare and Medicaid reporting and payment obligations; and environmental risk;

· the effects of changes in U.S. tariffs or foreign trade laws, or retaliatory measures by other countries in response, including: increased business costs and impacts on supply chains; new operational challenges as we navigate a more complex business landscape; and business uncertainty that adversely affects macroeconomic conditions;

· changes in U.S. laws or policies designed to facilitate most-favored-nation (“MFN”) pricing for prescription drugs;

· current challenges associated with conducting business globally, including uncertainty regarding the conflict between India and Pakistan, in the middle east, and between Russia and Ukraine, its adverse effects or economic instability, major hostilities or terrorism;

· other financial and economic risks, including: our exposure to currency fluctuations and restrictions as well as credit risks; potential impairments of our intangible assets; potential significant increases in tax liabilities; and the effect on our overall effective tax rate of the termination or expiration of governmental programs or tax benefits, or of a change in our business;

· compliance matters, including lapses by our U.S. or overseas employees, third-party distributors or marketing and distribution agents in complying with the U.S. Foreign Corrupt Practices Act and other worldwide anti-bribery laws,  which could result in adverse consequences to us, including without limitation causing us to be subject to injunctions or limitations on future conduct, be required to modify our business practices and compliance programs and/or have a compliance monitor imposed on us, or suffer other criminal or civil penalties or adverse impacts, including lawsuits by private litigants or investigations and fines imposed by local authorities;

· risks of reputational damage and other adverse effects in the event of inadequate performance and management of environmental, social and governance (“ESG”) and climate change topics; and

· those discussed in the sections entitled “risk factors”, “business overview” and “operating and financial review and prospects” and elsewhere in this report.

Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis and assumptions only as of the date hereof. In addition, readers should carefully review the other information in this annual report and in our periodic reports and other documents filed with and/or furnished to the sec from time to time.

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TABLE OF CONTENTS

PART I	5
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	5
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE	5
ITEM 3. KEY INFORMATION	5
3.A. [Reserved]	5
3.B. Capitalization and indebtedness	5
3.C. Reasons for the offer and use of proceeds	5
3.D. Risk factors	5
ITEM 4. INFORMATION ON THE COMPANY	27
4.A. History and development of the Company	27
4.B. Business overview	29
4.C. Organizational structure	55
4.D. Property, plant and equipment	56
ITEM 4A. UNRESOLVED STAFF COMMENTS	58
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS	58
5.A. Operating results	63
5.B. Liquidity and capital resources	69
5.C. Research and development, patents and licenses, etc.	72
5.D. Trend Information	72
5.E. Critical Accounting Estimates	73
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	73
6.A. Directors and senior management	73
6.B. Compensation	79
6.C. Board Practices	81
6.D. Employees	86
6.E. Share ownership	87
6.F. Disclosure of a registrant’s action to recover erroneously awarded compensation	88
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	88
7.A. Major shareholders	88
7.B. Related party transactions	91
7.C. Interests of experts and counsel	91
ITEM 8. FINANCIAL INFORMATION	91
8.A. Consolidated statements and other financial information	91
8.B. Significant changes	92
ITEM 9. THE OFFER AND LISTING	92
9.A. Offer and listing details	92
9.B. Plan of distribution	92
9.C. Markets	92
9.D. Selling shareholders	92
9.E. Dilution	92
9.F. Expenses of the issue	92

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ITEM 10. ADDITIONAL INFORMATION	92
10.A. Share capital	92
10.B. Memorandum and articles of association	92
10.C. Material contracts	93
10.D. Exchange controls	94
10.E. Taxation	99
10.F. Dividends and paying agents	105
10.G. Statements by experts	105
10.H. Documents on display	105
10.I. Subsidiary information	105
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	106
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	108
12.A. Debt Securities.	108
12.B. Warrants and Rights.	108
12.C. Other Securities.	108
12.D. American Depositary Shares.	108
PART II	110
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	110
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	110
ITEM 15. CONTROLS AND PROCEDURES	110
ITEM 16. [RESERVED]	112
ITEM 16.A. AUDIT COMMITTEE FINANCIAL EXPERT	112
ITEM 16.B. CODE OF ETHICS	112
ITEM 16.C. PRINCIPAL ACCOUNTANT FEES AND SERVICES	112
ITEM 16.D. EXEMPTION FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES	112
ITEM 16.E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	113
ITEM 16.F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT	113
ITEM 16.G. CORPORATE GOVERNANCE	113
ITEM 16.H. MINE SAFETY DISCLOSURE	116
ITEM 16.I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	116
ITEM 16.J. Insider Trading Policies	116
ITEM 16.K. CYBERSECURITY	116
PART III	117
ITEM 17. FINANCIAL STATEMENTS	117
ITEM 18. FINANCIAL STATEMENTS	117
ITEM 19. EXHIBITS	203

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PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

3.A. [Reserved]

3.B. Capitalization and indebtedness

Not applicable.

3.C. Reasons for the offer and use of proceeds

Not applicable.

3.D. Risk factors

You should carefully consider all of the information set forth in this Form 20-F and in other documents we file with or furnish to the SEC, including the following risk factors that we face and that are faced by our industry. The risks below are not the only ones we face. Additional risks not currently known to us or that we presently deem immaterial may also affect our business operations. Our business, financial condition, results of operations and/or cash flows could be materially or adversely affected by any of these risks. This Form 20-F also contains forward-looking statements that involve risks and uncertainties. Our results could materially differ from those anticipated in these forward-looking statements as a result of certain factors, including the risks we face as described below and elsewhere in this report and our other SEC filings. For a summary of the risk factors included in this Item 3.D. and for further details on our forward-looking statements, see “Forward-Looking Statements and Risk Factors Summary” on page 2.

MATERIAL RISKS RELATING TO OUR COMPANY AND OUR BUSINESS

Our success depends on our ability to successfully develop and commercialize new pharmaceutical products.

Our future results of operations depend, to a significant degree, upon our ability to successfully develop and commercialize additional products in our Global Generics and Pharmaceutical Services and Active Ingredients segments.

Our research and development efforts are also dependent on collaborating with third party partners and contract research organizations which have the capability to handle complex technologies and products. Lack of effective project management at our end, or any failure to manage collaboration arrangements among multiple partners, may pose significant risks to product development, to our ability to obtain requisite regulatory approvals in a timely manner, and to our ability to successfully and profitably produce and market such products.

The development process, including drug formulation, testing and regulatory approvals, often takes many years, and is informed by factors outside of our control, including but not limited to staffing and policy changes at the U.S. FDA and other regulatory agencies.  In March 2025, the U.S. presidential administration announced a plan to cut 3,500 jobs from the U.S. FDA. The cuts may include staff involved with the drug review process, which may delay the approval processes and timelines for new drugs.

Additionally, if we fail to adequately protect critical proprietary or confidential information or associated intellectual property rights or fail to manage third party partners and contract research organizations that our business depends on, it might have a material adverse impact on our product development execution.

From time to time, we also acquire in-process research and development assets, which require significant resources and expenditures to continue to develop, both through our own efforts and through collaborations. Because of the inherent risk associated with research and development efforts in our industry, including the high cost and uncertainty of conducting clinical trials (where required), such efforts may not result in the successful introduction of new pharmaceutical products approved by the relevant regulatory bodies.

Our results of operations may suffer if these products are not timely developed, approved or successfully commercialized. Refer to Note 12 (“Property, plant and equipment”), Note 13 (“Goodwill”) and Note 14 (“Other intangible assets”) of our consolidated financial statements for details of impairment of non-current assets.

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We must develop, test and manufacture generic products as well as prove that our generic products are bio-equivalent or biosimilar to their branded counterparts, either directly or in partnership with contract research organizations. The development and commercialization process, particularly with respect to complex molecules and biosimilars, is both time consuming and costly and involves a high degree of business risk.

In addition, the competitive landscape includes a high level of uncertainty as numerous companies are working on or may be evaluating similar targets, and a product considered as promising at the beginning of its development may become less attractive if a competitor addressing the same unmet need reaches the market earlier.

Our products currently under development, if and when fully developed and tested, may not perform as we expect or meet our standards of safety and efficacy. Necessary regulatory approvals may not be obtained in a timely manner, if at all, and we may not be able to successfully and profitably produce and market such products. Our approved products may not achieve expected levels of market acceptance.

If we fail to comply fully with government regulations or to maintain continuing regulatory oversight applicable to our research and development activities or if a regulatory agency delays or denies approvals for new products, it may affect realization of product revenues.

Our research and development activities are heavily regulated. If we fail to comply fully with applicable regulations, then there could be a delay in the submission or approval of potential new products for marketing approval. In addition, the submission of an application to a regulatory authority does not guarantee that approvals required to market the product will be granted. Each authority may impose its own requirements and/or delay or refuse to grant approval, even when a product has already been approved in another country. This approval process increases the cost of developing new products to us and increases the risk that we will not be able to successfully sell such new products.

Delays in the receipt of, or failure to obtain approvals for, future products, or new indications or life cycle management activities and uses, could result in delayed realization of product revenues, reduction in revenues and substantial additional costs.

If we fail to comply with the regulatory standards of various regulatory agencies in manufacturing of quality products, it may have potential impact on our business, financials and operations.

Governmental authorities, including among others the U.S. Food and Drug Administration (“U.S. FDA”) and the U.K. Medicines and Healthcare Products Regulatory Agency (“MHRA”), heavily regulate the manufacturing of our products, including manufacturing quality standards. Periodic inspections are conducted on our manufacturing sites, and if the regulatory and quality standards and systems are not found adequate, it could result in an inspection observation (on Form 483, if from the U.S. FDA), or a subsequent investigative letter which may require further corrective actions. In recent years, a number of Indian generic pharmaceutical companies have been issued Official Action Indicated (“OAI”) status notices and warning letters by the U.S. FDA. A significant proportion of our manufacturing base of active pharmaceutical ingredients and formulations plants servicing the United States and other markets of our Global Generics business is based out of India. While our quality practices and quality management systems are designed and maintained in a manner to comply with the highest regulatory and quality standards, the inspections may often lead to non-conformity observations requiring corrective actions. Based on the criticality of the observations and the circumstances, the U.S. FDA may classify the inspection as Voluntary Action Indicated (“VAI”) status or OAI status, may issue warning letters and/or place our products on import alert detention lists. More generally, unless and until an issue, raised in a warning letter from the U.S. FDA is resolved to the agency’s satisfaction, they may withhold approvals of new products and new drug applications, issue import alert notices and/or take additional regulatory or legal action. The delay in approvals due to moving to an alternate site or alternate vendor, or the cost incurred in connection with remedial actions, can have significant adverse impacts on ongoing business, financial results and operations. Refer to Note 35 (“Regulatory inspection of facilities”) of our consolidated financial statements for the status of U.S. FDA inspections. See also the discussion of our inspections by the China National Medical Products Administration in Item 4.B. of this report under “Our Principal areas of Operations - ‘Rest of the World’ markets of our Global Generics segment”. We deal with numerous third party manufacturers and, despite our oversight, any lapse in their quality practices and quality management systems could lead to similar adverse outcomes in the event of an inspection by the U.S. FDA. or other regulators.

If we fail to meet all the quality and regulatory requirements of biologic drugs and fail to successfully challenge third party patents as allowed by national patent offices, it may impact production and revenues.

A portion of our portfolio are “biologic” products. Unlike traditional “small-molecule” drugs, biologic drugs cannot be manufactured synthetically, but typically must be produced from living animal cells or micro-organisms. As a result, the production of biologic drugs that meet all quality and regulatory requirements are especially complex Failures in clinical trials or delays in the complex and costly R&D processes for biologic drugs can be a significant setback.

Typically, biological therapeutics are extensively protected by innovators and biologic therapeutics have to work around third party intellectual property rights, otherwise known as freedom to operate (“FTO”) aspects. Further, our ability to successfully challenge third party patent rights is dependent on the laws of the applicable countries.

The regulatory requirements are still evolving and are dynamic in many emerging markets where we sell or manufacture products, including our biologic drugs, and regulatory requirements may be unclear due to lack of precedents, among other reasons, which may lead to delays in product approvals, reapproval or re-licensure process, or other sanctions and, in turn, additional cost to operations. In the United States, the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”) created a statutory pathway and abbreviated approval processes for the approval of biosimilar versions of branded biological products. Further, several legal challenges concerning the requirements of the abbreviated biosimilar pathway, patent exchange and other provisions of BPCIA have been adjudicated in U.S. courts, legal challenges concerning FTO, patent exchange and trade matters, among others, continue.

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For example, in October 2023 the U.S. FDA inspected our Biologics facility in Hyderabad, India. In November 2024, the U.S. FDA issued a complete response letter (“CRL”) with additional queries in reference to the ongoing resolution of observations arising from the October 2023 inspection, as well as certain aspects pertaining to our biologics license application (“BLA”) for a biosimilar rituximab. While we submitted a deficiency response letter for the CRL in April 2025, and resubmitted our BLA, there is no certainty on timelines as to when the U.S. FDA will ultimately approve our resubmitted BLA, or guaranty of such approval, and we could experience further delays relating to the development of the biosimilar product.

Changes in tariffs and trade policies, and any retaliatory measures by other countries, could increase business costs, impact supply chains and cause business uncertainty, any of which may adversely impact our operations, supply chain, cash flows and profitability.

Escalating trade tensions have led to increased tariffs and trade restrictions. Since taking office in January 2025, the current U.S. presidential administration has issued numerous executive orders implementing or revising tariffs and international trade policies, seeking to prioritize U.S. domestic industry and rebalance global trade dynamics.

For example, the “Liberation Day” tariffs announced on April 2, 2025 included universal tariffs on imported goods, along with additional “reciprocal” tariffs on dozens of named countries. Although these tariffs include certain pharmaceutical product exemptions, the tariffs may nevertheless have a direct and/or indirect impact on products or components that we import. Subsequently, President Trump indicated that various additional changes in U.S. tariffs and trade policies may be forthcoming, including tariffs on pharmaceutical imports, including potential tariffs pursuant to Section 232 of the Trade Expansion Act of 1962. Other countries have implemented retaliatory tariffs in response and may announce additional tariffs or trade restrictions in the future.

Any trade policy change, through the implementation of tariffs or otherwise, or uncertainty regarding their implementation or final rates can create a volatile business environment, affecting strategic planning and investment decisions, and may have a material adverse effect on global trade, macroeconomic and geopolitical conditions and the stability of global financial markets.

Tariff could increase our cost of goods, including the availability and costs of API and raw materials. Depending upon shape and form in which tariffs and new trade policies are ultimately implemented, these could result in higher business decision complexity, additional operational expenses, tax complexity and profit margin pressure. They can also complicate supplier management and adversely impact supply chain flexibility and supply chain traceability. Moreover, they can have an added burden on asset management, with lower landed cost visibility.

Changes in laws or policies related to pricing for prescription drugs, including most-favored-nation (“MFN”) requirements, could adversely affect our product prices and profit margins, and thereby our operations, revenues and profits.

The adoption in new jurisdictions of laws and policies that reduce, establish or mandate price controls or establish prices paid by government entities or programs for our products, or the implementation of more restrictive controls in existing jurisdictions, could adversely affect our product prices and profit margins, and thereby our operations, revenues and profits. The failure to establish or maintain timely or adequate pricing may also adversely impact operations, revenues and profits. We expect that pricing pressures will continue globally.

For example, On May 12, 2025, the U.S. President issued an executive order "Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients," directing executive agencies to take steps to facilitate most-favored-nation (“MFN”) pricing for prescription drugs in the United States. The executive order directs the Secretary of Health and Human Services (“HHS”) to communicate MFN pricing targets to pharmaceutical manufacturers by June 11, 2025. Manufacturers are expected to make “significant progress” toward meeting these targets. If they fail to do so, then other regulatory actions are to be pursued, including proposing rules to implement MFN pricing, working with Congress to allow for expanded drug importation, exploring U.S. FDA drug approval reforms, increased antitrust enforcement and review of drug export practices. The order does not specify which drugs would be subject to MFN pricing, which countries will be considered, how MFN targets will be set or enforced, or what qualifies as “significant progress.”

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The May 12, 2025 executive order also calls on the Secretary of Commerce and the U.S. Trade Representative to address foreign pricing practices that may harm U.S. interests, including suppressing drug prices abroad and shifting the global research burden to American consumers. Additionally, the order directs HHS to support direct-to-consumer sales at MFN prices, seeking to bypass intermediaries in the current U.S. drug supply chain. We cannot predict the ultimate effect of this executive order on our business, but this could adversely affect our product prices and profit margins, and thereby our operations, revenues and profits. The executive order may also face lawsuits challenging the enforceability of certain of its terms, the outcome of which is inherently uncertain. As the implementation of this executive order evolves, we will continue to assess its impact on us.

Significant disruptions of information technology systems, breaches of data security or other cyber-attacks could adversely affect our business.

Our business is dependent upon increasingly complex and interdependent information technology (“IT”) systems, including internet and cloud based systems, to support our business processes as well as internal and external communications. In addition, our businesses and operating models increasingly depend on outsourcing and collaboration, which requires exchanging data and information. The size and complexity and interconnectivity of our computer systems make them potentially vulnerable to breakdown, malicious intrusion, computer viruses and other cyber-attacks.

We and our third party service providers perform regular risk assessments and take precautions intended to protect against and detect such risks, but we cannot be assured that these measures will be successful in preventing the compromise and/or disruption of our information technology systems and related data, especially as the external cyber-attack threat continues to grow.

Any such compromise or disruption may result in the loss, theft or unauthorized disclosure of key information and/or disruption of production and business processes, such as the conduct of scientific research and clinical trials, the submission of the results of such efforts to regulatory authorities in support of requests for product approvals, the functioning of our manufacturing and supply chain processes, our compliance with legal obligations and other key business activities, any of which could materially and adversely affect our business.

We maintain cybersecurity insurance to further mitigate these risks, but there can be no assurance that a policy exclusion will not apply, or that our insurance coverage limits will be sufficient to protect us against the financial, legal, business or reputational losses that may result from an interruption or breach of our systems.

In our pursuit of operational excellence, several change management initiatives across our organization are ongoing, including but not limited to information technology automation in the areas of manufacturing, research and development, supply chain and shared services. As part of our resiliency strategy, we have an IT disaster recovery plan in place for our key applications in order to minimize impacts from any unanticipated events and breakdowns.

       We have outsourced our IT hardware and applications in order to improve IT capability and performance. Any failure by such outsourced service providers to deliver timely and quality services and to co-operate with one another could create disruption, which could materially adversely affect our business or results of operations. Further, any failure by us to effectively manage such change initiatives or implement adequate controls in automation, security or availability of information technology systems could have a material adverse effect on our business.

 Increased outsourcing or use of cloud services for conducting our business requires highly secure controls to ensure adequate security of information, considering potential for sabotage as well as availability. Data integrity, confidentiality and data privacy requirements are increasingly concerning regulators, and are incorporated into legal contracts. While we have invested heavily in the protection of data and information technology to reduce these risks, there can be no assurance that our efforts or those of our third-party service providers would be sufficient to protect against data from being stolen or corrupted in the event of a security breach.

In cases where our personnel work remotely, their dependence on secure access may cause the risk of cyber incidents to remain elevated. If our information technology systems are unsuccessfully implemented, fail, suffer errors or interruptions, or become unavailable, that might have a materially adverse impact on our business operations and our financial position or results of operations and/or cash flows. See also the risk factors regarding artificial intelligence set forth in “EMERGING RISKS” below.

8

We have operations in certain countries and geographies susceptible to political and economic instability that could lead to disruption or other adverse impact on such operations.

We expect to derive an increasing portion of our sales from regions such as Latin America, Russia and other countries of the former Soviet Union, China Central Europe, Eastern Europe and South Africa, all of which may be more susceptible to political and economic instability.

In February 2022, Russia initiated military action against Ukraine. In response, the United States and certain other countries imposed significant sanctions and trade actions against Russia, which are continuing. The broader economic consequences of the military conflict, geopolitical instability, the imposition of sanctions and other restrictive measures against Russia and any retaliatory actions taken by Russia in response to such measures could adversely affect the global geopolitical and economic environment. And that could in turn adversely impact our operations, cash flows and growth in Russia and other countries of the former Soviet Union. For details on the impacts of this conflict on our business, see the discussion in Section 4.B. of this report under “Our Principal Areas of Operations - Global Generics Segment - Russia and other Countries of the former Soviet Union and Romania - Impact on our Operations due to the military conflict between Russia and Ukraine.”

If the military conflict between Russia and Ukraine results in further deterioration of their region’s economies, or if the negotiations between Russia and Ukraine to end the conflict and stand taken by the United States significantly deteriorates and the United States or other countries impose additional economic sanctions or supply chain restrictions, it could adversely impact our sales or cost of doing business in the region.

In April 2025, a major terrorist attack in Pahalgam, Jammu and Kashmir, India resulted in significant casualties and escalated military tensions between India and Pakistan. Although a ceasefire was agreed on May 10, 2025, the situation remains unpredictable.

In addition, the war declared by Israel on Hamas in October 2023, and the military activity in the region, remain ongoing.

We continue to monitor the effects of these military conflicts, as well as to monitor significant political, legal, regulatory and other susceptible economic developments in these regions and attempt to mitigate our exposure where possible. However, mitigation is not always possible, and our domestic and international operations could be adversely affected by political, legal, regulatory and economic developments, such as changes in capital and exchange controls; expropriation and other restrictive government actions; intellectual property protection and remedy laws; trade regulations; procedures and actions affecting approval, manufacturing and production, pricing, distribution and marketing of, reimbursement for and access to our products; and intergovernmental disputes, including embargoes and/or military hostilities.

Significant portions of our manufacturing operations for markets outside India in which our products are sold, and accordingly we often import a substantial number of products into such markets. We may, therefore, be denied access to our customers or suppliers or denied the ability to ship products from any of our sites as a result of closing of the borders of the countries in which we sell our products, or in which our operations are located.

This may result from economic, legislative, political or military conditions, including hostilities or acts of terror, in such countries. We currently face increased logistics costs as a result of requirements that we ship through longer marine routes or choose air shipments over sea routes.

A relatively small group of products may represent a significant portion of our net revenues, gross profit or net earnings from time to time.

In certain markets, sales of a limited number of products may represent a significant portion of our net revenues, gross profit and net earnings. If the volume or pricing of such products declines in the future, or if new product approvals get delayed by regulatory bodies, our business, financial position, results of operations and/or cash flows could be materially adversely affected.

We are subject to the U.S. Foreign Corrupt Practices Act, similar anti-bribery laws and other worldwide laws regarding marketing practices, which impose restrictions and may carry substantial penalties.

The U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to public officials or otherwise for the purpose of obtaining or retaining business. These laws may also require us to maintain accurate books and records, as well as to establish and monitor adequate controls, policies and processes to ensure business is conducted without the influence of bribery and corruption.

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Ethics and compliance is core to our values and, in this pursuit, we have established a strong compliance framework program. Our policies mandate compliance with these anti-bribery laws, which if not complied, often carry substantial penalties including fines, criminal prosecution and potential debarment from public procurement contracts. Failure to comply may also result in reputational damages.

We operate in certain jurisdictions that experience governmental corruption to some degree or, are found to be low on the Transparency International Corruption Perceptions Index and, in some circumstances, anti-bribery and anti-corruption (“ABAC”) laws may conflict with some local customs and practices. Business activities in many of these markets have historically been more susceptible to corruption. In many less-developed markets, we work with third party distributors and other agents for the marketing and distribution of our products. Our third party risk management (“TPRM”) policy sets forth the ABAC policy standards required for all of our vendors and third party agents. In addition to requiring initial due diligence screenings and ABAC training and certification, our TPRM policy mandates that contracts with these third parties include ABAC compliance obligations. Nonetheless, any lapses in complying with ABAC laws by these third parties despite our TPRM policy may adversely impact us.

If our efforts to maintain a strong TPRM policy or adequate controls fail, we could be held responsible for the non-compliance of third-party agents and distributors under applicable laws and regulations, including the U.S. Foreign Corrupt Practices Act and other anti-bribery laws. In such an event, we may be subject to injunctions or limitations on future conduct, be required to modify our business practices and compliance programs and/or have a compliance monitor imposed on us or suffer other criminal or civil penalties or adverse impacts, including lawsuits by private litigants or investigations and fines imposed by local authorities. Refer to Note 32 (“Contingencies - Internal Investigation”) of our consolidated financial statements for current internal investigation details.

From time to time, any change in regulatory requirements in the key geographies in which we operate might require us, along with the rest of the industry, to make necessary corresponding changes in our approach. Compliance with India’s Uniform Code for Pharmaceutical Marketing Practices (“UCPMP”) was changed from voluntary to mandatory in March 2024.

Our code of conduct in all areas of work, including ethical marketing practices, our transparent guidelines for interaction with healthcare professionals, and our culture of adherence to all applicable laws help us in being compliant and adapt to any changes in the future.

Pharmaceutical industry associations such as the Organization of Pharmaceutical Producers of India (“OPPI”) have made presentations to the government on the difficulties of implementation of the UCPMP as it stands today. As a company, we continue to work with industry associations such as the Indian Pharmaceutical Alliance (“IPA”) and the Federation of Indian Chambers of Commerce and Industry (“FICCI”) on such matters of policy. The manufacturing and marketing of drugs, drug products and cosmetics in India is governed by many statutes, regulations and guidelines, including but not limited to the following:

· The Drugs and Cosmetics Act, 1940 and the Drugs and Cosmetics Rules, 1945;

· The Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954;

· The Narcotic Drugs and Psychotropic Substances Act, 1985;

· The Drugs (Price Control) Order, 1995 and 2013, read in conjunction with the Essential Commodities Act, 1955;

· The National Pharmaceuticals Pricing Policy, 2012; and

· Uniform Code for Pharmaceutical Marketing Practices, 2024.

We need to constantly review and update our compliance program to keep it current and active. If we fail to do so, our vulnerabilities may increase and our controls may be found to be inadequate.

Actions by our employees, or third-party intermediaries acting on our behalf, in violation of such laws, whether carried out in the United States or elsewhere, may expose us to liability for violations of such anti-bribery laws and accordingly may have a material adverse effect on our reputation and our business, financial condition, results of operations and/or cash flows.

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If there is delay and/or failure in supplies of materials, services and finished goods from third parties or failure of finished goods from our key manufacturing sites, it may adversely affect our business and results of operations.

In some of our businesses, we rely on third parties for the timely supply of active pharmaceutical ingredients (“API”), specified raw materials, equipment, formulation or packaging services and maintenance services, and in some cases there could be a single source of supply.

Although, we actively manage these third party relationships to ensure continuity of supplies and services on time and to our required specifications, events beyond our control could result in the complete or partial failure of supplies and services or in supplies and services not being delivered on time.

We collaborate with several third-party contract research organizations and contract manufacturing organizations to facilitate the development and commercialization of certain drugs. However, any financial limitations or compliance challenges encountered by these external partners may lead to delays in product launches or cancellation of planned launches. In the event that we experience a shortage in our supply of raw materials, we might be unable to fulfill all of the API needs of our Global Generics segment, which could result in a loss of production capacity for this segment. Moreover, we may continue to be dependent on vendors, strategic partners and alliance partners for supplies of some of our existing products and new generic launches.

Any unanticipated capacity or supply related constraints affecting such vendors, strategic partners or alliance partners can adversely affect our business or results of operations. Our key generics manufacturing sites also may have capacity constraints and, at times, we may not be able to generate sufficient supplies of finished goods.

The ongoing macroeconomic environment and trade policy changes (i.e., tariffs imposed by the United States and retaliatory tariffs from other countries in response) or any escalation thereof, or an escalation in the currently ongoing military conflicts between India and Pakistan, in Ukraine or in the middle east, could also lead to challenges in supply fulfillment from our contract manufacturing organizations and other key suppliers of API and raw materials. That could impact our operations and delay our ability to manufacture finished dosages.

If we fail to maintain a supply of compliant, quality product, it may adversely affect our reputation and our business.

We may experience difficulties, delays and interruptions in the manufacturing and supply of our products for various reasons, including among other reasons:

· demand significantly in excess of forecast demand, which may lead to supply shortages (this is particularly challenging before the launch of a new product);

· supply chain disruptions, including those due to natural or man-made disasters at one of our facilities or at a critical supplier or vendor;

· delays in construction of new facilities or the expansion of existing facilities, including those intended to support future demand for our products (the complexities associated with biosimilar facilities, especially for drug substance, increases the probability of delay);

· the inability to supply products due to a product quality failure or regulatory agency compliance action such as license withdrawal, product recall or product seizure. For example, during the year ended March 31, 2025, we had a Class I recall of Sapropterin Dihydrochloride (Javygtor) Powder for Oral Solution and Levetiracetam Injection in the United States;

· other manufacturing or distribution problems, including changes in manufacturing production sites, limits to manufacturing capacity due to regulatory requirements, changes in the types of products produced, or physical limitations or other business interruptions that could impact continuous supply; and

· the difficulties inherent in the manufacture and sale of sterile products, including oncology products, which are technically complex to manufacture, and require sophisticated environmental controls. Because the production process for such products is so complex and sensitive, any production failures may lead to lengthy supply interruptions.

Our success depends on our ability to retain and attract qualified personnel and, if we are not able to retain them or recruit additional qualified personnel, we may be unable to successfully develop our business.

We are highly dependent on the principal members of our management and scientific staff, the loss of whose services might significantly delay or prevent the achievement of our business or scientific objectives. In the United States, executive officers and key employees typically provide a very short termination notice period (usually two weeks or less) unless specified otherwise in their contracts. However, in India, employment agreements generally mandate a termination notice period of several months. At present, we are not aware of any executive officer’s or key employee’s departure - planned or otherwise - that has had or is expected to have a material impact on our operations. Competition among pharmaceutical companies for qualified employees is intense, and the ability to retain and attract qualified individuals is critical to our success. Current or prospective employees may have changing expectations around workplace flexibility and diversity and inclusion, and a failure to meet these expectations may affect our ability to attract and retain top talent to support our business growth. There can be no assurance that we will be able to retain and attract such individuals currently or in the future on acceptable terms, or at all, and the failure to do so could have a material adverse effect on our business, financial condition, results of operations and/or cash flows.

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Reforms in the health care industry and the uncertainty associated with pharmaceutical pricing, reimbursement and related matters could adversely affect the marketing, pricing and demand for our products.

Our businesses are operating in an ever more challenging environment, with significant pressures on the pricing of our products and on our ability to obtain and maintain satisfactory rates of reimbursement for our products by governments, insurers and other payors.

For example, in the United States, Congress passed the Inflation Reduction Act of 2022 (the “IRA”), which makes significant changes to how drugs are covered and paid for under the Medicare program, including the creation of new rebates and financial penalties for drugs (including single-source generics) whose prices rise faster than the rate of inflation, redesign of the Medicare Part D program to require manufacturers to bear more of the liability for certain drug benefits, and government price-setting for certain Medicare Part D drugs, starting in 2026, and Medicare Part B drugs starting in 2028. The long-term implications of the IRA remain uncertain and we are continuing to evaluate this law and its impact on our business.

The U.S. Congress also continues to consider other drug pricing legislation that, if passed and signed into law, could impact companies’ ability to increase prices for prescription drugs, even in case of increase in our input costs, to maintain our margins. For instance, the U.S. Department of Health and Human Services and U.S. FDA’s Safe Importation Action Plan was announced in July 2019. Following this framework, the U.S. FDA enacted a rule, which became effective in November 2020.  Under the rule, states or certain other non-federal governmental entities may submit importation program proposals to the U.S. FDA for review and authorization of two-year programs (with the opportunity to extend for two more years).  The FDA's Safe Importation Action Plan has been implemented, allowing states to import certain prescription drugs from Canada under specific conditions. In January 2024, Florida became the first state authorized to implement a Section 804 Importation Program to import drugs from Canada. Although the U.S. FDA has authorized Florida to import specific drugs from Canada, the plan is still in its early stages and requires further steps before it can be fully implemented. It is unclear how this program will be implemented, including which drugs will be chosen, and whether it will be subject to legal challenges in the United States or Canada. Other states have also submitted importation program proposals that are pending review by the U.S. FDA. Any such importation plans, when approved and implemented, may result in lower drug prices for products covered by those programs. Certain states have also proposed other measures that are designed to control the costs of pharmaceuticals for which they provide reimbursement.

The growth of overall healthcare costs as a percentage of gross domestic product in many countries means that governments and payors are under intense pressure to control healthcare spending even more tightly than in the past.

These pressures are particularly strong given the persistently weak economic and financial environment in many countries and the increasing demand for healthcare resulting from the aging of the global population and associated increases in non-communicable diseases. These pressures are further compounded by consolidation among distributors, retailers, private insurers, managed care organizations and other private payors, which can increase their negotiating power. For example, there are three large Group Purchasing Organizations that account for a substantial majority of generics purchases in the United States in 2025. In addition, these pressures are augmented by intense publicity regarding the pricing of pharmaceuticals by our competitors, as well as government investigations and legal proceedings regarding pharmaceutical pricing practices. Refer to Note 32 (“Contingencies”) of our consolidated financial statements for current investigations and legal proceedings. In many countries in which we currently operate, pharmaceutical prices are increasingly subject to regulation.

Our products continue to be subject to increasing price and reimbursement pressure that can limit the revenues we earn from our products in many countries due to, among other things:

· the existence of government-imposed price controls, tender systems, mandatory discounts and rebates, pricing transparency mandates and drug importation program;

· more governments using international reference pricing to set the price of drugs based on international comparisons (Refer to “Our Principal areas of Operations - Global Generic segment” in Item 4.B. of this report);

· increased difficulty in obtaining and maintaining satisfactory drug reimbursement rates;

· increase in cost containment policies related to health expenses in the context of economic slowdown;

· more demanding evaluation criteria applied by health technology assessment agencies when considering whether to cover new drugs at a certain price level; and

· the ongoing macroeconomic environment and tariffs (i.e., tariffs imposed by the United States and retaliatory tariffs from other countries in response) or any escalation thereof could force us to evaluate our product pricing.

We expect these efforts to continue as healthcare payors around the globe, in particular government-controlled health authorities, insurance companies and managed care organizations, step up initiatives to reduce the overall cost of healthcare.

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We operate in a highly competitive and rapidly consolidating industry which may adversely affect our revenues and profits.

Our products face intense competition from products commercialized or under development by competitors in all of our business segments based and geographies in which we operate. Many of our competitors have greater financial resources and marketing capabilities than we do.

Our competitors may succeed in developing technologies and products that are more effective, more popular or cheaper than any we may develop or license, thus rendering our technologies and products obsolete or uncompetitive, which would harm our business and financial results. It is also possible that alternate therapies or substitutable products that we developed for the same indication would lead to cannibalization of revenues from our products.

The U.S. FDA’s efforts to increase the pace at which generics enter the market has also resulted in higher competition and in a trend of many first-time generic manufacturers entering the market, which is further increasing competition in the market and increasing pressure on pricing.

In recent years, there has also been an increase in the number of generic manufacturers targeting significant new generic opportunities with exclusivity under the Hatch-Waxman Act, or which are complex to develop. Many of the smaller generic manufacturers have increased their capabilities, level of sophistication and development resources in recent years.

Our generics business is also facing increasing competition from brand-name manufacturers who do not face any significant regulatory approvals or barriers to enter into the generics market. These brand name manufacturers have devised numerous strategies to do so including, for example, by selling generic versions of their products directly, by forming strategic alliances with our competitor generic pharmaceutical companies or by granting them rights to sell “authorized generics”. Moreover, brand companies continually seek new ways to delay the introduction of generic products and decrease the impact of generic competition, such as by: filing new patents on drugs whose original patent protection is about to expire, developing patented controlled-release products, changing the dosage form or dosing regimen of the brand product prior to generic introduction while the generic applicant seeks to amends its ANDA dossier to match the changes in the brand product; changing product claims and product labeling; developing and marketing as over-the-counter products those branded products that are about to face generic competition; or pricing the branded product at a discount equivalent to generic pricing.

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We are subject to data protection laws and regulations in many different jurisdictions and countries where we do business, and a failure to comply by us or by our third parties acting on our behalf could result in fines, administrative and criminal penalties, reputational damage, and could adversely impact the way we operate our business.

We are subject to laws and regulations governing the collection, use, transfer and retention of personal data, including health information. As the legislative and regulatory landscape continues to evolve around the world, there has been an increasing focus on data privacy and protection issues that may affect our business. The European Union’s (EU) General Data Protection Regulation (“GDPR”), which became fully effective in May 2018, implemented stringent requirements on how a company may gather, retain, use and manage personal and sensitive personal data, as well as mandatory data breach notification requirements. The GDPR grants national authorities the power to apply fines of up to EUR 20 million or 4% of the previous financial year’s global turnover (whichever is greater).

Additionally, the California Consumer Privacy Act (“CCPA”) of 2018, as amended by California Privacy Rights Act (“CPRA”) of 2020, created new individual privacy rights for California consumers and increased the privacy and security obligations on business entities handling personal data of consumers or households. These laws require businesses to provide new disclosures to California consumers, provide such consumers with new ways to opt-out of certain sales of personal information, and allow for a new cause of action for data breaches. Similarly, several other U.S. states have recently enacted privacy laws which are either currently in effect or are in process of being implemented.

More recently, the Digital Personal Data Protection Act of India (the “DPDP Act”) was passed in 2023, with extra-territorial scope. The DPDP Act puts several obligations on ‘data fiduciaries’ which process digital personal data collected in India or processed in connection with offering goods and services to individuals in India. As per the DPDP Act, penalties levied for data breaches can be up to Rs.2.5 billion. The DPDP Act has not yet come into force, pending notification of its final implementation rules by the Government of India.

Other countries in which we do business have, or are developing, or strengthening data protection laws that may affect our business or require us to adapt our technologies and organizational measures.

Also, data localization requirements and enforcement in countries such as Russia and China, along with the EU’s restrictions related to cross-border transfer of personal data to third countries, further limits the ease of transfer of personal data from such countries to the rest of the world.

Evolving third-party relationships beyond the traditional vendor/supplier model and the increased use of digital solutions and medical devices, including those utilizing emerging technologies such as artificial intelligence (“AI”), pose new privacy, and security challenges. These will require constant monitoring of new guidelines and regulations (e.g. the EU AI act) around the world, such as the EU AI Act (Regulation (EU) 2024/1689 laying down harmonized rules on artificial intelligence), as well as a need for us to assess and upgrade our capabilities in these areas.

The burdensome and often conflicting requirements under these various Data Protection laws as well as emerging AI and guidelines, require us to allocate increasingly greater resources towards ensuring compliance with them. Among other things, there is significant additional cost associated with the development, implementation and maintenance of upgrades to our information technology systems, as well as ongoing monitoring and governance efforts.

Impairment charges or write downs in our books could have a significant adverse effect on our results of operations and financial results.

A substantial portion of the value of our assets pertains to various intangible assets and goodwill. The proportion of the intangible assets and goodwill to our total assets could increase significantly as we pursue various growth strategies. The value of these intangible assets and goodwill could be substantially impaired upon indications of impairment, with adverse effects on our financial condition and the value of our assets.

Our results of operations may suffer if our products are not timely developed, approved or successfully commercialized. Certain of our products were impaired during the years ended March 31, 2025, 2024 and 2023. Refer to Note 12 (“Property, plant and equipment”), Note 13 (“Goodwill”) and Note 14 (“Other intangible assets”) of our consolidated financial statements for further details.

If we fail to comply with environmental laws and regulations, or face environmental litigation, our costs may increase, or our revenues may decrease.

We may incur substantial costs complying with requirements of environmental laws and regulations. In addition, we may discover currently unknown environmental problems or conditions. In all countries where we have production facilities, we are subject to significant environmental laws and regulations that govern the discharge, emission, storage, handling and disposal of a variety of substances that may be used in or result from our operations. In the normal course of our business, we are exposed to risks relating to possible releases of hazardous substances into the environment, which could cause environmental or property damage or personal injuries, and that could require remediation of contaminated soil and groundwater, which could cause us to incur substantial remediation costs that could adversely affect our consolidated financial position, results of operations or liquidity. Refer to Note 32 (“Contingencies - Environmental matters”) of our consolidated financial statements for further details on current environmental matters.

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If any of our plants or the operations of such plants are shut down, it may severely hamper our ability to supply our customers and we may continue to incur costs in complying with regulations, appealing any decision to close our facilities, maintaining production at our existing facilities and continuing to pay labor and other costs, which may continue even if the facility is closed.

Environmental regulatory requirements in different countries where we operate continue to evolve and may require us to incur additional costs to comply with such requirements.

If we elect to sell a generic product prior to the final resolution of outstanding patent litigation, we could be subject to liabilities for damages.

At times we seek approval to market generic products before the expiration of patents for those products, based upon our belief that such patents are invalid, unenforceable, or would not be infringed by our products. As a result, we might be involved in patent litigation, the outcome of which could materially adversely affect our business. Based upon a complex analysis of a variety of legal and commercial factors, we may elect to market a generic product even though litigation is still pending. This could be before any court decision is rendered or while an appeal of a lower court decision is pending. To the extent we elect to proceed in this manner, if the final court decision is adverse to us, we could be required to cease the sale of the infringing products and face substantial liability for patent infringement. These damages may be significant as they may be measured by a royalty on our sales or by such damages as may be awarded by the court as a result of final litigation outcome. Refer to Note 32 (“Contingencies”) for further details on our current product and patent related litigations.

Because of the discount pricing typically involved with generic pharmaceutical products, patented brand products generally realize a significantly higher profit margin than generic pharmaceutical products. Furthermore, there may be risks involved in entering into in-licensing arrangements for products, which are often conditioned upon the licensee’s sharing in the patent-related risks.

For business reasons, we continue to examine such product opportunities (i.e., involving non-expired patents) going forward and this could result in patent litigation, the outcomes of which may have a material adverse effect on our results of operations, financial condition and/or cash flows.

If we improperly handle any of the dangerous materials used in our business and accidents result, we could face significant liabilities that would adversely affect our business, reputation and result of operations.

We handle dangerous materials, including explosive, toxic and combustible materials. If improperly handled or subjected to the wrong conditions, these materials could cause accidents resulting in injury, property and environment damage, and business disruptions. Changes in business and operations in our plants from the introduction of new products, or increased demand for existing products, can also pose increased safety hazards. Such hazards can be addressed and mitigated through project risk assessment, employee and contractor training, proper governance systems and other safety measures, and the failure to carry these out can lead to industrial accidents.

Any of the foregoing could subject us to significant litigation, which could lower our profits in the event we were found liable and could also adversely impact our reputation.

In a worst case scenario, this could also result in a government forced shutdown of our manufacturing plants, which in turn could lead to product shortages that delay or prevent us from fulfilling our obligations to customers and would adversely affect our business and results of operations.

Fluctuations in exchange rates and interest rate movements may adversely affect our business and results of operations.

A significant portion of our revenues are in currencies other than the Indian rupee, especially in the U.S. dollar, the Euro, the Russian rouble, the U.K. pound sterling, and the Brazilian reals, while a significant portion of our costs are in Indian rupees. As a result, if the value of the Indian rupee appreciates relative to these other currencies, our revenues measured in Indian rupees may decrease and our financial performance may be adversely impacted.

Further, we may also be exposed to credit risks in some of the emerging markets from our customers on account of adverse economic conditions.

We use derivative financial instruments to manage interest rate fluctuations and some of our net exposure to currency exchange rate fluctuations in certain key foreign currencies.

15

We may be susceptible to significant product liability claims that are not covered by insurance.

Our business inherently exposes us to potential product liability claims, and the severity and timing of such claims are unpredictable. Notwithstanding pre-clinical and clinical trials conducted during the development of potential products to determine the safety and efficacy of products for use by humans following approval by regulatory authorities, unanticipated side effects may become evident only when drugs are introduced into the marketplace. Due to this fact, our customers and participants in clinical trials may bring lawsuits against us for alleged product defects. In other instances, third parties may perform analyses of published clinical trial results which raise questions regarding the safety of pharmaceutical products, and which may be publicized by the media. Even if such reports are inaccurate or misleading, in whole or in part, they may nonetheless result in claims against us for alleged product defects.

Under the current regulatory scheme in the United States, branded drug manufacturers can independently update product labeling through the “changes being effected” (“CBE”) supplement process, but a generic manufacturer is only permitted to use the CBE process to update its label if the branded drug manufacturer changes its label first. This can prevent generic manufacturers from complying with state law warning requirements and, as a result, state product liability suits based on failure-to-warn and design defect claims against generics manufacturers have generally been determined to be preempted by Federal law.

However, emerging developments in various countries laws relating to the liability of generic pharmaceutical manufacturers for certain product liability claims could increase our exposure to litigation costs and damages. This potential exposure to lawsuits would also have increased the risk that, in the future, we would not be able to obtain the type and amount of insurance coverage we desire at an acceptable price The risk of exposure to lawsuits is likely to increase as we develop limited competition/complex products, such as injectable vaccines or biosimilar products, in addition to making generic versions of drugs that have been in the market for some time. In addition, the existence or even threat of a major product liability claim could also damage our reputation and affect consumers’ views of our other products, thereby negatively affecting our business, financial condition, results of operations and cash flows.

If we are unable to defend ourselves in patent challenges, we could be subject to injunctions preventing us from selling our products, or we could be subject to substantial liabilities that could adversely affect our profits and cash flows. Further, our patent settlement agreements with the innovators may face government scrutiny, exposing us to significant damages.

There has been substantial patent related litigation in the pharmaceutical industry concerning the manufacture, use and sale of various products. In the normal course of business, we are regularly subject to lawsuits and the ultimate outcome of litigation could adversely affect our results of operations, financial condition, and cash flow. Regardless of regulatory approval, lawsuits are periodically commenced against us with respect to alleged patent infringements by us, such suits often being triggered by our filing of an application for governmental approval, such as an ANDA or NDA.

The expense of any such litigation and the resulting disruption to our business, whether or not we are successful, could harm our business. The uncertainties inherent in patent litigation make it difficult for us to predict the outcome of any such litigation.

California passed the Preserving Access to Affordable Drugs (AB-824), legislation that could adversely impact our ability to settle patent litigations. The law, which took effect on January 1, 2020, creates a presumption that a patent settlement has anti-competitive effects, and thus violates California's state antitrust law, if it provides for the generic pharmaceutical company to receive “anything of value” from the branded pharmaceutical company and if the generic pharmaceutical company agrees to delay the launch of a generic product for any period of time. The law specifically identifies exclusive licenses and agreements by the branded pharmaceutical company “not to launch an authorized generic version” of its branded product as things of value that would trigger the presumption. Such presumption may make it more difficult to negotiate settlement agreements which are subject to this new law.

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If we are unsuccessful in defending ourselves against these suits, we could be subject to injunctions preventing us from selling our products, resulting in a decrease in revenues, or to damages, which may be substantial. An injunction or substantial damages resulting from these suits could adversely affect our consolidated financial position, results of operations or liquidity.

Further, we have been involved in various litigations involving challenges to the validity or enforceability of registered patents and therefore settling such patent litigations has been and is likely to continue to be an important part of our business.

Parties to patent litigation settlement agreements in the United States, including us, are required by law to file them with the Federal Trade Commission (“FTC”) and the Antitrust Division of the Department of Justice for review. The FTC has publicly stated that, in its view, some of the brand-generic settlement agreements violate the antitrust laws and has brought actions against some brand and generic companies that have entered into such agreements. Accordingly, such settlement agreements may expose us to antitrust violation claims.

Class action lawsuits could expose us to significant liabilities, result in negative publicity, harm our reputation and have a material adverse effect on the price of our ADSs.

Shareholders of a public company sometimes bring securities class action lawsuits against the company following periods of instability in the market price of that company’s securities. As a public company grows in size, the risk of such litigations may increase. If we were to be sued in any such class action suit, irrespective of the merits of the underlying case, it could have adverse effects on us, including among other things: (a) a diversion of management’s time and attention and other resources from our business and operations, which could harm our results of operations; (b) negative publicity, which could harm our reputation and restrict our ability to raise capital in the future; (c) require us to incur significant expenses to defend the suit; and (d) if a claim against us is successful, we may be required to pay significant damages and, in certain circumstances, to indemnify our directors and officers if they are named as defendants in the class action suit. Any of the foregoing could, individually or in the aggregate, have a material adverse effect on our financial condition, results of operations, cash flows and/or the price of our ADSs.

The off-label use of our products may result in costly investigations, fines or sanctions by regulatory bodies if we or our distributors are deemed to have engaged in the promotion of these uses.

While physicians may prescribe products for uses that are not described in the product labeling and that differ from those approved by the U.S. FDA or other similar regulatory authorities (an “off label” use), we and our distributors are permitted to market our products only for the indications for which they have been approved. The U.S. FDA and other regulatory agencies actively enforce regulations prohibiting promotion of off-label uses, and significant liability can be imposed on manufacturers found to be engaged in off-label marketing violations, including substantial civil penalties and fines, as well as criminal sanctions or exclusion from participation in government healthcare programs. If some of our products are prescribed off label, regulatory authorities such as the U.S. FDA could take enforcement actions if they conclude that we or our distributors have engaged in off label marketing.

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OTHER RISKS GENERALLY APPLICABLE TO OUR INDUSTRY OR THE GEOGRAPHIES IN WHICH WE OPERATE

Current economic conditions may adversely affect our industry, financial position, results of operations and cash flows.

In recent years, the global economy has experienced volatility and an unfavorable economic environment, and these trends may continue in the future. The growth of our business may be negatively affected by high unemployment levels and increases in co-pays, which may lead some patients to delay treatments, skip doses or use less effective treatments to reduce their costs.

We have exposure to many different industries and counterparties, including our partners under our alliance, research and promotional services agreements, suppliers of raw materials, drug wholesalers and other customers, who may be unstable or may become unstable in the current economic environment. We run the risk of delayed payments or even non-payment by our customers, which consist principally of wholesalers, distributors, pharmacies, hospitals, clinics and government agencies.

Significant changes and volatility in the consumer environment and in the competitive landscape may make it increasingly difficult for us to predict our future revenues and earnings.

In addition, there has recently been an accelerated rate of inflation (a trend which is expected to continue in the near future) that has resulted, and may continue to result, in increased costs of labor, raw materials, other supplies and commodity prices and freight and distribution costs, among others. For the pharmaceutical industry, the pricing dynamics of our products generally does not provide the opportunity to pass on such costs to customers. Inflation may also result in higher interest rates and increased costs of capital.

Counterfeit versions of our products could harm our patients and reputation.

Our industry has been increasingly challenged by the vulnerability of distribution channels to illegal counterfeiting and the presence of counterfeit products in a growing number of markets and over the internet. Third parties may illegally distribute and sell counterfeit versions of our products, which do not meet the rigorous manufacturing and testing standards that our products undergo. Counterfeit products are frequently unsafe or ineffective and can be potentially life-threatening.

Counterfeit medicines may contain harmful substances, the wrong dose of the API or no API at all. Counterfeiters may use the same brand name and packaging as the genuine pharmaceutical company, so as to make it visually indistinguishable from the authentic version and thereby deceive distributors and consumers.  Counterfeit medicines are manufactured in unsafe conditions and are not approved by regulatory authorities. They are inherently unsafe and pose a serious risk to public health.

Reports of adverse reactions to counterfeit drugs or increased levels of counterfeiting could materially affect patient confidence in the authentic product, and harm the business of companies such as ours. Additionally, it is possible that adverse events caused by unsafe counterfeit products would mistakenly be attributed to the authentic product.

Various governments have enacted laws intended to combat counterfeiting, including the U.S. Drug Quality and Security Act and the EU’s Falsified Medicines Directive, as further discussed in Section 4.B. (Business Overview). In addition to complying with these laws, we have put in place internal mechanisms to monitor incidents that come to our notice and we proactively carry out regional surveys.

With an increased focus from key stakeholders on climate-related and other environmental, social and governance (“ESG”) disclosures, an inadequate performance and management of ESG topics could materially affect our growth and reputation.

As ESG continues to gain significance with governments, corporates and investors, there have been multiple shifts in the global ESG regulatory and reporting landscape, along with changing stakeholder expectations. Disclosure requirements are becoming more complex with constantly evolving and newly emerging ESG reporting regulations, and mandatory and voluntary frameworks such as the Corporate Sustainability Reporting Directive (CSRD) and International Sustainability Standards Board (ISSB) sustainability disclosure standards, with little or no standardization across methodologies. Many voluntary disclosures on human rights-related or climate-related issues and topics are expected due to their growing global significance and need for urgent solutions. As we engage in voluntary reporting and prepare for compliance with mandatory standards, we face greater pressure to ensure the accuracy, reliability, and verifiability of our ESG data, requiring strong internal controls and processes to internally and externally assure, and deliver timely reporting to our stakeholders.

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Climate change has the potential to increase the frequency and severity of natural disasters and extreme weather events. Even if we take precautions to provide back-up support in the event of such a natural disaster, the disaster may nonetheless affect our facilities, harming production and ultimately our business. And, even if our manufacturing facilities are not directly damaged, a large natural disaster may result in disruptions in distribution channels or supply chains.

We are an integrated pharmaceutical company operating in multiple geographies such as India, Mexico, the United States and the United Kingdom. Several of our operations can be exposed to different climate-related regulations. In addition, current or emerging laws or regulations intended to limit greenhouse gas emissions or water usage, such as carbon pricing, taxes on emissions, fuel and energy, or to mitigate the impacts of climate change may become more prevalent, which could increase our operating costs and the costs charged by suppliers. These events could have a material adverse effect on our business. Our customers conduct audits on a continual basis on matters related to sustainability including climate change adaption and mitigation. Inadequate management of environmental resources could lead to loss of revenue, higher operational costs, and incidents that could harm our communities and the environment, leading to financial and reputational implications. Moving to new, more sustainable solutions for resource conservation may require increased capital expenditure.

We are subject to various laws and regulations concerning, among other things: employee safety; product safety; the handling, transportation, storage, use and disposal of chemicals; and the discharge of regulated materials and pollutants into the environment. Failure to adapt to or comply with existing or new regulatory requirements, or investor or stakeholder expectations and standards, on these ESG matters could negatively impact our reputation or harm our business. Our suppliers, business partners, or other stakeholders are subject to similar expectations, which may augment or create additional risks.

We have set ambitious strategic ESG goals in line with our vision, and our targets, stated strategy, and the ability to achieve our goals are based on assumptions that are subject to change in the future. Meeting our access to medicines goals involves navigating complex factors such as government regulations, socioeconomic factors, the availability, quality, and increasing costs of medicines, healthcare expenditures etc., and may impact our ability to deliver affordable and innovative treatment to patients. Achieving our targets on carbon neutrality and renewable energy is dependent on multiple external factors including the pace of deployment of renewable energy, intermittency and variability, storage capacity and infrastructure challenges, technical challenges, the cost of carbon offsets etc. These factors may impact our ability to meet our goals or meet them within our stated timelines, including heightened stakeholder expectations, and our reputation may be harmed. Additionally, our value chain partners may not comply with our ESG commitments, and this may have a negative influence on our business.

In recent years, in addition to financial results, companies are increasingly being judged by their ESG practices. Several global and national organizations including ESG rating agencies, research analysts, and disclosure and standards organizations evaluate our work through in-depth analyses of our sustainability efforts. These include reviews of our publicly available documents, and independent quantitative and qualitative assessments, often involving discussions with our management and employees. The results of these ratings are publicly and widely available. Any negative score could adversely impact our reputation and brand value, and the trust placed in us by our stakeholders. This could negatively impact our ability to attract and retain employees, the implementation of our strategic objectives, our operational and financial results, our access to capital, and share price.

With growing pressure to improve and expand our ESG disclosures, we need to engage with our investors frequently and keep a close eye on their ESG-related concerns. Investor sentiment is also driven by global shifts, the political climate, and international policies. Simultaneously, other stakeholders (including regulators and legislators) have increasingly expressed or pursued opposing views, legislation and investment expectations with respect to sustainability initiatives, including the enactment or proposal of “anti-ESG” legislation or policies. These opposing views may also be adopted by our investors.

Considering the fast pace of change of external expectations and regulations, there can be no certainty that we will manage such issues successfully, that the ESG standards we currently use to measure our performance against will remain the same, or that we will successfully meet society or investors’ expectations. An inability to manage investor sentiment or conflicting stakeholder expectations may negatively impact our positioning and valuation.

Stringent labor laws may adversely affect our ability to have flexible human resource policies; labor union problems could negatively affect our production capacity and overall profitability.

Labor laws may restrict our ability to have human resource policies that would allow us to react swiftly to the needs of our business. As of March 31, 2025, approximately 1.7% of our employees belonged to a number of different labor unions. If we experience problems with our labor unions, that may adversely affect our production capacity and our overall results and operations.  

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India’s Code on Social Security, 2020, which aims to consolidate, codify and revise certain existing social security laws, received Presidential assent in September 2020 and has been published in the Gazette of India. However, the related final rules have not yet been issued and the date on which this Code will come into effect has not been announced. We will assess the impact of this Code and the rules thereunder when they come into effect.

If we have difficulty in identifying candidates for or consummating acquisitions and strategic alliances, our competitiveness and our growth prospects may be harmed.

In order to enhance our business, we frequently seek to acquire or make strategic investments in complementary businesses or products, or to enter into strategic partnerships or alliances with third parties. It is possible that we may not identify suitable acquisition, strategic investment or strategic partnership candidates, or if we do identify suitable candidates, we may not complete those transactions on terms commercially acceptable to us. We compete with others to acquire companies, and we believe that this competition has intensified and may result in decreased availability or increased prices for suitable acquisition candidates. Even after we identify acquisition candidates and/or announce that we plan to acquire a company, we may ultimately fail to consummate the acquisition. For example, we may be unable to obtain necessary regulatory approvals, including the approval of antitrust regulatory bodies.

All acquisitions involve known and unknown risks that could adversely affect our future revenues and operating results. For example:

· We may fail to successfully integrate our acquisitions in accordance with our business strategy.

· The initial rationale for the acquisition may not remain viable due to a variety of factors, including unforeseen regulatory changes and market dynamics after the acquisition, and this may result in a significant delay and/or reduction in the profitability of the acquisition.

· We may not be able to retain the skilled employees and experienced management that may be necessary to operate the businesses we acquire. If we cannot retain such personnel, we may not be able to locate or hire new skilled employees and experienced management to replace them.

· We may purchase a company that has contingent liabilities that include, among others, known or unknown patent or product liability claims or environmental liability claims.

· We may purchase companies located in jurisdictions where we do not have operations and as a result we may not be able to anticipate local regulations and the impact such regulations have on our business.

 A pandemic, epidemic or outbreak of an infectious disease, such as COVID-19, and the resulting restrictive measures and economic impacts may materially and adversely impact our business and results of our operations.

The pandemic, epidemic or outbreak of an infectious disease, such as COVID-19, and responses to curtail them may have a number of risks and challenges for our business, including among others its impacts on the global supply chain, on governmental processing time for product and patent approvals, on health and safety of employees and on the economy in general. In the years ended March 31, 2025 and 2024, we did not experience significant impacts or delays from any pandemic or epidemic on our business operations. However, we had experienced certain disruptions relating to the COVID-19 pandemic during the year ended March 31, 2021, and we cannot be certain whether COVID-19 or other pandemics will adversely impact our business operations and results in future periods.

Changes in tax regulations of the countries we operate in may increase our tax liabilities and thus adversely affect our financial results.

Currently we are entitled to concessional tax rate under Indian tax laws for one of our subsidiaries in India. Concessional tax rates are reduced rates applicable to companies engaged in manufacturing activities which have been set-up and registered in India on or after October 1, 2019 and which commenced manufacturing or production on or before March 31, 2024. Any changes in these laws may increase our tax liability and thus affect our financial results accordingly.

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India’s Finance Act, 2016 amended the test of residence for foreign companies. While a non-resident company is generally taxed only on its Indian sourced income, a resident company is taxed on its global income. Under the amended rule, a company not formed under the laws of India would be considered a resident in India if its place of effective management in the previous year was in India.

The term “place of effective management” (or “PoEM”) has been defined to mean a place where key management operates and commercial decisions that are necessary for the conduct of the business of an entity as a whole are in substance made.

We operate in various countries, and changes in tax rate or tax laws of countries in which we have significant operations could result in a material impact on our tax liabilities and tax charges, resulting in either an increase or a reduction in financial results depending upon the nature of the change. There may be changes in tax rates in a few countries due to initiatives such as the Pillar Two Inclusive Framework on the Base Erosion and Profit Shifting (“BEPS”) project undertaken by the Organization for Economic Cooperation and Development (“OECD”), which seeks to establish a global minimum tax rate of 15%. Currently, numerous countries are drafting or have enacted legislation to implement Pillar Two rules with some effective dates as early as January 1, 2024. Tax and compliance costs are expected to be increased by the adoption of Pillar Two regulations in these countries. We continue to monitor pending OECD guidance and legislation enactment and implementation by individual countries.

We operate in jurisdictions that impose transfer pricing and other tax-related regulations on our intercompany arrangements, and any failure to comply could materially and adversely affect our profitability.

We are required to comply with various transfer pricing regulations in India and other countries. Failure to comply with such regulations may impact our effective tax rates and consequently affect our net margins. Additionally, we operate in numerous countries and our failure to comply with the local and municipal tax regimes may result in additional taxes, penalties and enforcement actions from such authorities.

Although our intercompany arrangements are based on accepted tax standards, tax authorities in various jurisdictions may disagree with and subsequently challenge the amount of profits taxed in such jurisdictions, which may increase our tax liabilities and could have a material adverse effect on the results of our operations and cash flows. Further, the BEPS project undertaken by the OECD contemplates changes to numerous international tax principles. Various countries have incorporated such tax principles into their domestic legislations by way of enactment. These enactments are significant in nature and require compliance on a regular basis. Although we will continue to adhere to such compliance, significant uncertainties remain as to the outcome of these efforts.

From time to time we enter new markets, and face risks arising out of our limited knowledge of the market and the customs, laws and regulatory systems that may apply.

From time to time, we enter new markets in which we have limited knowledge of the market and the customs, laws, regulatory, political and social systems that may apply. Our success in these new markets is dependent upon the acceptability of our product and brand, the ease of doing business in such market and various other social and economic factors that may be specific to such market. Further, limitations by the local authorities of repatriation of generated funds may pose a risk to our success in these new markets. Our sales and profit margins may be adversely affected if we fail to provide competitive options in the market or our brands fail to gain acceptability in the market.

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EMERGING RISKS

We analyze reports and insights issued by the World Economic Forum, audit and consulting firms, banks and insurance companies, and investigations on the internet from selected reliable sources, regarding trends for the coming years and main threats and opportunities to be anticipated by pharmaceutical industry.

Given the relatively recent development of AI and Generative AI and its rapidly evolving nature, new risks and opportunities continue to emerge.

Artificial intelligence (“AI”) and generative AI present opportunities to analyze data, improve performance and productivity and generate business growth, but also poses inherent risks. Flaws, biases, or malfunctions in these systems could lead to operational disruptions, data loss, or erroneous decision-making, impacting our business operations, financial condition, and reputation. Ethical and legal challenges may arise, including biases or discrimination in AI outcomes, non-compliance with data protection regulations, and lack of transparency. Furthermore, the deployment of AI systems could expose us to increased cybersecurity threats, such as data breaches and unauthorized access leading to financial losses, legal liabilities, and reputational damage. We also face competitive risks if we fail to adopt AI or other machine learning technologies in a timely fashion.

There is also a rapidly evolving landscape for AI governance and compliance. There are challenges in ensuring an understanding, and implementation, of country specific regulations, managing data privacy and intellectual property and securing AI platforms. While we look forward to adapting newer AI technologies, we continue to evaluate use cases, and their risk benefit ratios, prior to operationalizing its usage.

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RISKS RELATING TO INVESTMENTS IN INDIAN COMPANIES

We are an Indian company. Our headquarters are located in India, a substantial part of our operations are conducted in India, and a significant part of our infrastructure and other assets are located in India. In addition, a portion of our total revenues for the year ended March 31, 2025 continued to be derived from sales in India. As a result, the following additional risk factors apply that are not specific to our company or industry.

We may be subjected to additional compliance and litigation risks as a result of periodic amendments in certain key Indian regulations, including The Indian Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Foreign Exchange Management Act, 1999 and other laws, regulations, as applicable to our company.

As a company that is incorporated in India, we are governed by certain key Indian rules and regulations, including The Companies Act, 2013. Some of the significant changes from The Companies Act, 2013 were in the areas of board and governance processes, boardroom responsibilities, disclosures, corporate social responsibility, audit matters, initiation of class action suits by shareholders or depositors, fraud reporting and whistle-blower mechanisms.

In addition, the Securities and Exchange Board of India (“SEBI”) issued the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the “Listing Regulations”) which replaced the former Listing Agreement, that must be followed by all listed Indian public companies. The Listing Regulations were intended to consolidate and streamline the provisions of the then existing listing agreements for different segments of the capital markets (e.g., equity securities, debt securities, Indian depository receipts, etc.). The Listing Regulations have thus been structured to provide ease of reference by consolidating into one single document across various types of securities listed on the stock exchanges.

Key features of the Listing Regulations include:

· A framework has been prescribed for disclosure of material events and information by listed entities to the Indian stock exchanges. Certain events mentioned in the regulations are deemed material and disclosure is mandatory. Subject companies are also required to make adequate disclosure of events or information which may have material effect. Certain events are to be disclosed based on application of the guidelines for materiality as prescribed. The Board of Directors is required to frame a policy for determination of materiality and disclose the same on the website of the company.

· Entities are required to frame policies on preservation of documents, determination of material subsidiaries, risk management, code of conduct, remuneration of directors, key managerial personnel and other employees, board diversity, materiality of related party transactions and dealing with related party transactions, criteria for evaluation of directors, and certain other matters.

However, certain provisions of the Companies Act, 2013 and the SEBI Listing Regulations provisions are subject to varying interpretations and their application in practice may evolve over time as additional guidance is provided by regulatory and governing bodies. Further, the Companies Act, 2013, the rules made thereunder and the SEBI Listing Regulations have been and are being amended from time to time.

These amendments relate to, among other things, governance, related party transactions, financial reporting, audits and auditors, disclosures and other board and shareholders related matters. All of the foregoing may collectively result in continuing uncertainty regarding compliance matters and higher costs of compliance as a result of ongoing revisions.

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Risks Relating to our ADSS THAT ARE NOT SPECIFIC TO OUR COMPANY OR INDUSTRY

Our principal shareholders have significant influence over us and, if they take actions that are not in the best interests of our minority shareholders, the value of their investment in our ADSs may be harmed.

Our full time executive directors and members of their immediate families, in the aggregate, beneficially owned 26.64% of our issued shares as of March 31, 2025. As a result, these people, acting in concert, are likely to have the ability to exercise significant influence over most matters requiring approval by our shareholders, including the election and removal of directors and significant corporate transactions. This significant influence by these directors and their family members could delay, defer or prevent a change in control, impede a merger, consolidation, takeover or other business combination involving us, or discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us. As a result, the value of the equity shares and/or ADSs of our minority shareholders may be adversely affected or our minority shareholders might be deprived of a potential opportunity to sell their equity shares and/or ADSs at a premium.

Fluctuations in our quarterly revenues, operating results and cash flows may adversely affect the trading price of our shares and ADSs.

Our quarterly revenues, operating results and cash flows have fluctuated significantly in the past and may fluctuate substantially from quarter to quarter in the future. Such fluctuations result from a variety of factors, including but not limited to changes in demand for our products, timing of regulatory approvals and of launches of new products by us and our competitors (particularly where we obtain the 180-day period of market exclusivity in the United States provided under the Hatch-Waxman Act of 1984), timing of our retailers’ promotional programs and successful development and commercialization of limited competition and complex products. Such fluctuations may result in volatility in the price of our equity shares and our ADSs. In such an event, the trading price of our shares and ADSs may be adversely affected.

Negative media coverage and public scrutiny may adversely affect the prices of our equity shares and ADSs.

Media coverage, including social media coverage such as blogs, of us has increased dramatically over the past several years. Any negative media coverage, regardless of the accuracy of such reporting, may have an adverse impact on our reputation and investor confidence, resulting in a decline in the share price of our equity shares and our ADSs.

Indian law imposes certain restrictions that limit a holder’s ability to transfer the equity shares obtained upon conversion of ADSs and repatriate the proceeds of such transfer, which may cause our ADSs to trade at a premium or discount to the market price of our equity shares.

Under certain circumstances, the Reserve Bank of India must approve the sale of equity shares underlying ADSs by a non-resident of India to a resident of India. The Reserve Bank of India has given general permission to effect sales of existing shares or convertible debentures of an Indian company by a resident to a non-resident, subject to certain conditions, including the price at which the shares must be sold. Additionally, except under certain limited circumstances, if an investor seeks to convert the Indian rupee proceeds from sale of equity shares in India into foreign currency and then repatriate that foreign currency from India, he or she will have to obtain an additional approval from the Reserve Bank of India for each such transaction. Required approval from the Reserve Bank of India or any other government agency may not be obtained on terms favorable to a non-resident investor or at all.

Investors who exchange our ADSs for our underlying equity shares may be subject to the provisions of the Companies Act, 2013 and to the disclosure obligations that may be necessary pursuant to the deposit agreement with our applicable depositary. The Companies Act, 2013 requires that, where the registered owner of shares does not hold the beneficial interest in such shares, both the registered owner and the beneficial owner of such equity shares are required to disclose to the company the nature of their interest, particulars of the registered owner and certain other details.

There are limits and conditions to the deposit of shares into the ADS facility.

Indian legal restrictions may limit the supply of our ADSs. The only way to add to the supply of our ADSs will be through a primary issuance because the depositary is not permitted to accept deposits of our outstanding shares and issue ADSs representing those shares. However, an investor in our ADSs who surrenders an ADS and withdraws our shares will be permitted to redeposit those shares in the depositary facility in exchange for our ADSs. In addition, an investor who has purchased our shares in the Indian market will be able to deposit them in the ADS program, but only in a number that does not exceed the number of underlying shares that have been withdrawn from and not re-deposited into the depositary facility. Moreover, there are restrictions on foreign institutional ownership of our equity shares as opposed to our ADSs.

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The global pandemic, geo-political conflicts, persistently weak global economic and financial environment in many other countries, particularly emerging market countries, and increasing political and social instability could have a material adverse effect on our business and the price and liquidity of our shares and our ADSs.

It is uncertain how long the effects of global pandemic, geo-political conflicts, persistently weak global economic and financial environment, and increasing political and social instability in many other countries, particularly emerging market countries will last, or whether economic and financial trends will worsen or improve. These effects could have a material adverse effect on our business and the price and liquidity of our shares and our ADSs.

If U.S. investors in our ADSs are unable to exercise preemptive rights available to our non-U.S. shareholders due to the registration requirements of U.S. securities laws, the investment of such U.S. investors in our ADSs may be diluted.

A company incorporated in India must offer its holders of shares preemptive rights to subscribe and pay for a proportionate number of shares to maintain their existing ownership percentages prior to the issuance of any shares, unless these rights have been waived by at least 75% of its shareholders present and voting at a shareholders’ general meeting.

U.S. investors in our ADSs may be unable to exercise preemptive rights for the shares underlying our ADSs unless a registration statement under the Securities Act of 1933 is effective with respect to the rights or an exemption from the registration requirements of the Securities Act is available. Our decision to file a registration statement will depend on the costs and potential liabilities associated with a registration statement as well as the perceived benefits of enabling U.S. investors in our ADSs to exercise their preemptive rights and any other factors we consider appropriate at the time. We might choose not to file a registration statement under these circumstances. If we issue any of these securities in the future, such securities may be issued to the depositary, which may sell them in the securities markets in India for the benefit of the investors in our ADSs.

There can be no assurances as to the value, if any, the depositary would receive upon the sale of these securities. To the extent that U.S. investors in our ADSs are unable to exercise preemptive rights, their proportional interests in us would be reduced.

Our equity shares and our ADSs may be subject to market price volatility, and the market price of our equity shares and ADSs may decline disproportionately in response to adverse developments that are unrelated to our operating performance.

Market prices for the securities of Indian pharmaceutical companies, including our own, have historically been highly volatile, and the market has from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies.

Factors such as the following can have an adverse effect on the market price of our ADSs and equity shares:

· general market conditions,

· speculative trading in our shares and ADSs, and

· developments relating to our peer companies in the pharmaceutical industry.

Investors who hold our ADSs may not be able to sell their ADSs at or above the price at which they purchased such ADSs. The price of our ADSs fluctuate from time to time, and we cannot predict the price of our ADSs at any given time. The risk factors described herein could also cause the price of our ADSs to fluctuate materially.

These broad market and industry factors may materially harm the market price of our ADSs, regardless of our operating performance. In addition, the price of our ADSs may be affected by the valuations and recommendations of the analysts who cover us, and if our results do not meet the analysts’ forecasts and expectations, the price of our ADSs could decline as a result of analysts lowering their valuations and recommendations or otherwise.

There may be less company information available in Indian securities markets than securities markets in developed countries.

We are incorporated in India, and there are certain differences in the rights and protections of shareholders under the laws of India as compared to the laws of the United States and other developed economies.

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For example, there is a difference between the level of regulation and monitoring of the Indian securities markets over the activities of investors, brokers and other participants, as compared to the level of regulation and monitoring of markets in such other countries. The Securities and Exchange Board of India is responsible for improving disclosure and other regulatory standards for the Indian securities markets. The Securities and Exchange Board of India has issued regulations and guidelines on disclosure requirements, insider trading and other matters. There may, however, be less publicly available information about Indian companies than is regularly made available by public companies in developed countries, which could affect the market for our equity shares and ADSs.

Indian stock exchange closures, broker defaults, settlement delays, and Indian Government regulations on stock market operations could affect the market price and liquidity of our equity shares.

The Indian securities markets are smaller than the securities markets in the United States and Europe and have experienced volatility from time to time. The regulation and monitoring of the Indian securities market and the activities of investors, brokers and other participants differ, in some cases significantly, from those in the United States and some European countries. Indian stock exchanges have at times experienced problems, including temporary exchange closures, broker defaults and settlement delays and if similar problems were to recur, they could affect the market price and liquidity of the securities of Indian companies, including our shares. Furthermore, any change in Indian Government regulations of stock markets could affect the market price and liquidity of our equity shares and ADSs.

Sale of our equity shares may adversely affect the prices of our equity shares and ADSs.

The Government of India’s Depository Receipts Scheme, 2014, permits liberalized rules for sponsored and unsponsored secondary market issue of depository receipts, subject to the existing sectorial cap on foreign investment. Under the regulations implemented, an Indian company’s equity shares can be freely issued to a depository for the purpose of issuing depository receipts through any mode permissible for the issue of such securities to other investors. This enables us to more readily issue shares to the depositary for our ADSs and conduct U.S. securities issuances of our ADSs, which may impact the share price and available float in Indian stock exchanges as well as the price and availability of our ADSs on the NYSE. Refer to Item 10.D. of this report under “Exchange controls – ADS guidelines” for further details.

Further, the SEBI introduced a detailed framework for issuance of Depository Receipts (“DRs”) by a company incorporated and listed on a recognized stock exchange in India pursuant to its circular dated October 10, 2019. The framework inter alia sets out eligibility requirements, permissible jurisdictions, international exchanges, and permissible holder of DRs, as well as certain other obligations to be complied with by issuers of DRs, the Indian depository, the foreign depository and the domestic custodian. Further, pursuant to its circular dated November 28, 2019 and December 18, 2020, the SEBI gave notice of the permissible jurisdictions for listing of DRs and amended the scope and process for permissible holders of DRs, respectively.

The price of our ADSs and the U.S. dollar value of any dividends we declare may be negatively affected by fluctuations in the U.S. dollar to Indian rupee exchange rate.

Our ADSs trade on the NYSE in U.S. Dollars. Since the equity shares underlying the ADSs are listed in India on the BSE and the NSE and trade in Indian Rupees, the value of our ADSs may be affected by exchange rate fluctuations between the U.S. dollar and the Indian Rupee. In addition, dividends declared, if any, are denominated in Indian Rupees, and therefore the value of the dividends received by the holders of ADSs in U.S. Dollars will be affected by exchange rate fluctuations.  

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ITEM 4. INFORMATION ON THE COMPANY

4.A. History and development of the Company

Dr. Reddy’s Laboratories Limited was incorporated in India under the Companies Act, 1956, by its promoter and our former Chairman, the late Dr. K. Anji Reddy, as a Private Limited Company on February 24, 1984. We were converted to a Public Limited Company on December 6, 1985 and listed on the BSE Limited (formerly known as the Bombay Stock Exchange Limited), the National Stock Exchange of India Limited and certain other Indian stock exchanges in August 1986, and on the New York Stock Exchange on April 11, 2001. We also listed on the NSE IFSC Limited, a stock exchange in the International Financial Services Centre in Gujarat, India, on December 9, 2020. We are registered with the Registrar of Companies, Hyderabad, Telangana, India as Company Identification No. L85195TG1984PLC004507. Our registered office is situated at 8-2-337, Road No. 3, Banjara Hills, Hyderabad, Telangana 500 034, India and the telephone number of our registered office is +91-40-49002900. The name and address of our registered agent in the United States is Dr. Reddy’s Laboratories, Inc., 107 College Road East, Princeton, New Jersey 08540. Our main corporate website address is https://www.drreddys.com.

The SEC maintains an Internet website (at www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. This annual report on Form 20-F and other information filed by us with or furnished by us to the SEC can be accessed via such website. Certain (but not all) of such materials are also available on our website, at www.drreddys.com, as soon as reasonably practicable after having been electronically filed with or furnished to the SEC. Information contained in our website, www.drreddys.com, is not part of this annual report on Form 20-F and no portion of such information is incorporated herein or any other materials filed with or furnished to the SEC.

Key business developments:

Agreement with Nestlé India Limited (“Nestlé India”)

In April 2024, we entered into a definitive agreement with Nestlé India Limited (“Nestlé India”), for manufacturing, developing, promoting, marketing, selling, distributing, and commercializing nutraceutical products and supplements in India and other geographies as may be agreed by the parties. The aforesaid business activities are carried out through Dr. Reddy’s Nutraceuticals Limited (the “Nutraceuticals subsidiary”) which was incorporated on March 14, 2024.

Subsequently, the Nutraceuticals subsidiary’s name was changed to Dr. Reddy’s and Nestlé Health Science Limited on June 13, 2024. The closing conditions were satisfied, and the transaction was completed on August 1, 2024.

This arrangement is strategically important for both companies as it allows to combine their complementary strengths and expand their reach in the nutraceutical market.

Refer to Note 36.A. (“Business Combination - Agreement with Nestlé India Limited”) of our consolidated financial statements for further details.

Agreement with Alvotech hf. (''Alvotech'')

In May 2024, we entered into a license and supply agreement with Alvotech for the commercialization of 'AVT03, Alvotech’s biosimilar candidate to Prolia® and Xgeva® (denosumab). This product is intended for the treatment of various diseases, including osteoporosis in postmenopausal women, and for the prevention of skeletal-related events in adults with advanced malignancies. This collaboration combines our global commercial presence with Alvotech’s proven capabilities in developing biosimilars for worldwide markets.

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Alvotech is responsible for the development and manufacturing of the product, while we are responsible for its registration and commercialization in applicable markets. As part of this agreement, we have obtained exclusive rights for the U.S. market and semi-exclusive rights for the European markets.

In March 2025, the U.S. FDA accepted a Biologic License Application submission for AVT03, which marks an important milestone in bringing this biosimilar medication to more patients throughout the U.S.

Distribution Agreement with Novartis Pharma LLC (“Novartis Pharma”)

In May 2024, we entered into a distribution agreement with Novartis Pharma LLC (“Novartis Pharma”) to sell and distribute the anti-diabetes products Galvus® and Galvus Met®, which are leading brands among Dipeptidyl Peptidase-4 (DPP4) molecules. This partnership brings us synergies in our cardio and diabetes portfolio in the Russia territory.

Under this agreement, Novartis Pharma will continue to own and manufacture these products and supply them to us and we will distribute the products in the retail market and work with health care professionals, using our own sales force team and pharmacy chains management.

Acquisition of business from Haleon UK Enterprises Limited (“Haleon”)

In June 2024, we entered into a definitive agreement with Haleon UK Enterprises Limited (“Haleon”) to acquire Haleon’s global portfolio outside of the United States of consumer healthcare brands in the Nicotine Replacement Therapy category (the “NRT Business”) for a total consideration of up to Rs.56,121 million (GBP 500 million), including an upfront cash payment of Rs.51,407 million (GBP 458 million) and earn-out consideration of up to Rs.4,714 million (GBP 42 million). The acquisition is structured by way of purchase of all of the shares in Northstar Switzerland SARL, a Haleon group company whose assets include intellectual property, employees, agreements with commercial manufacturing organization, marketing authorizations and other assets relating to the commercialization of brands including Nicotinell (with extensive presence in Europe, Asia including Japan, and Latin America), Nicabate (in Australia), and other brands in Canada and New Zealand. The acquisition was inclusive of all formats such as lozenge, patch, spray and/or gum in all applicable global markets outside of the United States.

The closing conditions were satisfied, and the transaction was completed on September 30, 2024. Upon completion, we purchased 100% of the shares of Northstar Switzerland SARL and paid an upfront cash payment of Rs.51,407 million (GBP 458 million).

The integration of the operations of the acquired NRT Business into our company will happen gradually in a phased approach between April 2025 and February 2026 until the local marketing authorizations for respective geographies are transferred in our name. For the interim transition period until transfer of marketing authorisations is complete, we have entered into a Transition Distribution Services Agreement whereby Haleon will provide temporary distribution and related services up to February 2026 across all markets, subject to a potential extension as may be determined mutually by the parties.

We believe that the acquired business strengthens our position in global consumer healthcare OTC business.

Refer to Note 36.B. (“Business combination - Business transfer agreement with Haleon”) of our consolidated financial statements for further details.

Agreement with Shanghai Henlius Biotech, Inc. (''Henlius'')

In February 2025, we entered into a licensing agreement with Shanghai Henlius Biotech, Inc. (''Henlius'') to commercialize both the subcutaneous and intravenous formulations of the biosimilar product, ‘daratumumab biosimilar HLX15' in the United States and Europe. This product is intended for the treatment of multiple myeloma. This collaboration combines our global commercial presence with Henlius’ proven capabilities in developing biosimilars for markets worldwide.

Under the terms of the agreement, Henlius is responsible for the development, manufacturing and commercial supply of the product, while we are responsible for its commercialization.

We paid an upfront consideration of Rs.2,872 million (U.S.$33 million) and further milestones are payable upon achievement of commercial milestones, bringing up the total potential consideration (including upfront consideration) to Rs.11,249 million (U.S. $131.6 million). In addition, Henlius is eligible to receive royalties on annual net sales of the product upon commercialization.

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Principal capital expenditures

During the years ended March 31, 2025, 2024 and 2023, we invested Rs.33,154 million, Rs.26,350 million and Rs.18,784 million (net of sales of capital assets), respectively, in capital expenditures for manufacturing, research and development facilities and other assets.

We believe that these investments will create the capacity to support our strategic growth agenda. As of March 31, 2025, we also had contractual commitments of Rs.14,567 million for capital expenditures. We currently intend to finance our additional capital expansion plans entirely through our internal operating cash flows and other investments.

4.B. Business overview

Established in 1984, we are an integrated global pharmaceutical company committed to accelerating access to affordable and innovative medicines. Our reportable operating segments are as follows:

· Global Generics;

· Pharmaceutical Services and Active Ingredients (“PSAI”); and

· Others.

Global Generics. This segment consists of our business of manufacturing and marketing prescription and over-the-counter finished pharmaceutical products ready for consumption by the patient, marketed under a brand name (branded formulations) or as generic finished dosages with therapeutic equivalence to branded formulations (generics). This segment includes the operations of our biologics business, and the portfolio of consumer healthcare brands in the Nicotine Replacement Therapy category (the “NRT Business”) that we recently acquired is also included in this segment.

Pharmaceutical Services and Active Ingredients. This segment primarily consists of our business of manufacturing and marketing active pharmaceutical ingredients and intermediates, also known as “API”, which are the principal ingredients for finished pharmaceutical products. Active pharmaceutical ingredients and intermediates become finished pharmaceutical products when the dosages are fixed in a form ready for human consumption such as a tablet, capsule or liquid using additional inactive ingredients. We also serve our customers with incremental value added products including semi-finished and finished formulations, which are included in this segment. This segment also includes our pharmaceutical services business, which provides contract research services and manufactures and sells active pharmaceutical ingredients in accordance with the specific customer requirements.

Others. This segment consists of our other business operations which includes our wholly-owned subsidiaries, Aurigene Oncology Limited (“AOL”) (formerly Aurigene Discovery Technologies Limited) and our Proprietary Products business. AOL is a specialized biotechnology company engaged in discovery and early clinical development of novel, best-in-class therapies in the fields of oncology and inflammation. AOL works with established pharmaceutical and biotechnology companies through customized models of drug-discovery collaborations. Our Proprietary Products business is focused on the research, development and commercialization of differentiated formulations and we derive revenues from such assets through event specific milestones and subsequent royalties, if any.

Our key markets include the United States, India, Russia and other countries of the former Soviet Union, and Europe.

OUR STRATEGY

Our strategy is guided by our core purpose of “Good Health Can’t Wait” which enables us to accelerate access to affordable and innovative medicines. Escalating health care costs across the world have put many medicines out of the reach of millions of people. As a global generic pharmaceutical company, we believe that our responsibility to patients worldwide is to offer affordable alternatives to expensive medicines and to help patients better manage their health.

Our Promises and our Core Tenets:

We deliver on our purpose through a set of promises we make to our customers and partners:

· to bring expensive medicines within reach;

· to address unmet patient needs;

· to help patients manage disease better;

· to work with partners to help them succeed; and

· to enable our partners to ensure that our products are available where needed.

The work we do to deliver on these promises is guided by our core tenets of:

· pioneering work based on science;

· progressive people practices; and

· rigor in governance.

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Our Product and Service Offerings

Global Generics: We aim to provide access to affordable medication through generics, both for small and large molecules. We have also diversified into consumer health and innovative products with the aim to improve the standard of care available to patients.

· Branded and Unbranded Generics: We develop, manufacture, and market a portfolio of high-quality generic drugs at an affordable price. We seek to have a portfolio of credible brands, focused on delivering first-to-market, differentiated products to doctors and patients in both branded and unbranded generics markets. Our vertical integration helps ensure that quality products are always available to patients. We have also entered into strategic partnerships with third parties to sell our products in markets where we do not have our own sales and distribution operations.

· Biosimilars: We seek to accelerate access to generic versions of biological products globally through our own fully integrated organization that spans development, manufacturing and marketing activities, in combination with strategic partnerships. Having launched multiple biosimilar products in India and other emerging markets, we have also taken this business into highly regulated markets.

· Consumer Healthcare: We offer differentiated, science-backed and clinically proven consumer health products to holistically improve patients’ health outcomes and quality of life.

· Innovation: We seek to cater to unserved, underserved or unarticulated patient needs by leveraging our current endowments to bring innovation to the patient, including new chemical entities (“NCEs”)/ new biological entities (“NBEs”), cell and gene therapy (“CGT”) and digital therapeutics.

Pharmaceutical Services and Active Ingredients (“PSAI”): Our PSAI segment is comprised of our active pharmaceutical ingredients (“API”) business and our pharmaceutical services business. Through both these businesses, we aim to offer technologically advanced products and niche product services, internally and externally.

· API: Our product offerings include complex, differentiated, high quality and affordable APIs, backed by strong chemistry and synthesis skills. This enables launches at competitive prices of our own products as well as of our customers.

· Pharmaceutical Services: We aim to offer niche product service capabilities, technology platforms, and competitive cost structures to innovator and biotechnology companies.

Others: This segment consists of various other business operations including our wholly-owned subsidiaries, AOL and our Proprietary Products business. AOL is a specialized biotechnology company engaged in discovery and early clinical development of novel, best-in-class therapies to treat cancer and inflammatory diseases. Our Proprietary Products business focuses on commercialization of differentiated formulations through partnerships to maximize value.

We continue to strengthen on our core generic businesses and build on our future growth drivers to meaningfully improve the lives of patients by addressing unmet patient needs across the illness-to-wellness spectrum.

Operating priorities

To create sustainable customer value across our operations, we have been investing in the following priorities:

· Safety: The concept of safety has been imbued in the operating culture throughout our organization. Specific initiatives are being carried out to increase safety awareness, to achieve a safe working environment, to avoid accidents and injuries, and to minimize the loss of manufacturing time.

· Quality: We are fully dedicated to quality and have robust quality processes and systems in place at our developmental and manufacturing facilities to ensure that every product is safe and of high quality. In addition, we have integrated “Quality by Design” to build quality into all processes and use quality tools to minimize process risks.

· Operational Excellence: We apply a continuous improvement framework to the critical operations and processes in our value chain. With an operating and management review rhythm, we review and refine the business processes across the organization to measure and improve their performance.

· Leadership Development: We are focused on developing leaders, as well as enhancing leadership behavior, across our organization through focused efforts and structured leadership development programs.

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Pillars of our growth Strategy

To maximize our impact and reach more patients, our growth strategy is built on three pillars:

· Market leadership in our chosen spaces: We strive to increase product launches which are first to market, develop complex and differentiated products, enhance access to innovative products and deepen our market presence through new ‘go to market’ channels. We offer a strong value proposition through cost leadership, backward integration, reliable customer service, and a strong compliance track record for our customers.

· Operational excellence and continuous improvement: Our aim is to significantly to continually optimize productivity and resource utilization to accelerate product launches, improve cost competitiveness, and enhance responsiveness to customer needs.

· Patient focused innovation: We aim to offer a portfolio of innovative, differentiated products in chosen spaces through to address the unmet needs of the patient, better condition management and enhanced and consistent customer engagement.

These three pillars are underpinned by sustainability, which drives our resolve to address societal needs through our sustainability goals of:

· being committed to environmental stewardship;

· making our products accessible and affordable for patients;

· contributing to a fairer and more socially inclusive world; and

· enhancing trust with our stakeholders.

Refer to our Sustainability disclosures available on our website for more detailed information regarding our environmental goals and activities. Nothing on our website or any section thereof shall be deemed incorporated by reference into this Annual Report on Form 20-F or any other filing with the U.S. Securities and Exchange Commission.

OUR PRINCIPAL AREAS OF OPERATIONS

The following table shows our revenues and the percentage of total revenues of our business segments for the years ended March 31, 2025, 2024 and 2023, respectively:

	For the year ended March 31,
Segment	2025				2024							2023
	(Rs. in million, U.S.$ in million)
Global Generics	U.S.$	3,389	Rs.	289,552		89	%	Rs.	245,453	88	%	Rs.	213,768	87	%
PSAI		396		33,846		10	%		29,801	11	%		29,069	12	%
Others		25		2,137		1	%		3,910	1	%		3,042	1	%
Total Revenue	U.S.$	3,810	Rs.	325,535		100	%	Rs.	279,164	100	%	Rs.	245,879	100	%

Revenues by country and by therapeutic area for the years ended March 31, 2025, 2024 and 2023 are discussed in Note 5 (“Segment Reporting”) to our consolidated financial statements.

Global Generics Segment

Revenues from our Global Generics segment were Rs.289,522 million for the year ended March 31, 2025, an increase of 18% as compared to Rs.245,453 million for the year ended March 31, 2024. The revenue increase was in all four business geographies of this segment: North America (the United States and Canada), Europe, “Emerging Markets” (which is comprised of Russia, other countries of the former Soviet Union, Romania and certain other countries from our “Rest of the World” markets, including Brazil, South Africa, China and Australia) and India.

The production processes for finished dosages of generics are similar, to a certain extent, regardless of whether the finished dosages are to be marketed to highly regulated or less regulated markets. In many cases, the processes share common and interchangeable facilities and employee bases, and use similar raw materials. However, differences remain between highly regulated and less regulated markets in terms of manufacturing, packaging and labeling requirements and the intensity of regulatory oversight, as well as the complexity of patent regimes.

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While the degree of regulation in certain markets may impact product development, we are observing increasing convergence of development needs throughout both highly regulated and less regulated markets. As a result, when we begin the development of a product, we may not necessarily target it at a particular market, but will instead target the product towards a cluster of markets that will include both highly regulated and less regulated markets.

Today, we are one of the leading generic pharmaceutical companies in the world. With the integration of all the markets where we are selling generic pharmaceuticals into our Global Generics segment, our front-end business strategies in various markets and our support services in India are increasingly being developed with a view to leverage our global infrastructure.

The following is a discussion of the key markets in our Global Generics segment.

India

During the year ended March 31, 2025, India accounted for 19% of our total Global Generics segment sales. In India, our key therapeutic categories include gastro-intestinal, cardiovascular and anti-diabetic, dermatology, oncology, respiratory, stomatology, urology, nephrology, Vaccines and pain management.

As of March 31, 2025, we had a total of 443 branded products in India. Our top ten branded products together accounted for 23% of our revenues in India in the year ended March 31, 2025. According to IQVIA, a provider of market research to the pharmaceutical industry, in its moving annual total report for the twelve-month period ended March 31, 2025, our secondary sales in India grew by 8.41%. In comparison, the Indian pharmaceutical market experienced growth of 8.03% during such period. Strategic Marketing Solutions and Research Center Private Limited (“SMSRC”), a prescription market research firm, in its report measuring pharmaceutical prescriptions in India for the twelve-month period ended February 2025, ranked us 7th in terms of the number of prescriptions generated in India during such period.

Sales, marketing and distribution network

We generate demand for our products through our ~9,000 sales representatives (which include representatives engaged by us on a contract basis through a service provider) and front line managers, who frequently visit doctors to detail our related product portfolio. They also visit various pharmacies to ensure that our brands are adequately stocked.

We sell our products primarily through clearing and forwarding agents to approximately 5,900 wholesalers who decide which brands to buy based on demand. The wholesalers pay for our products within an agreed credit period and in turn sell these products to retailers. Our clearing and forwarding agents are responsible for transporting our products to the wholesalers. We pay our clearing and forwarding agents on a commission basis. We have insurance policies that cover our products during shipment and storage at clearing and forwarding locations.

Competition

We compete with different companies in the Indian formulations market, depending upon therapeutic and product categories and, within each category, upon dosage strengths and drug delivery. On the basis of sales, we were the 10th largest pharmaceutical company in India, with a market share of 3.1%, according to IQVIA in its moving annual total report for the twelve-month period ended March 31, 2025.

Our competitors in the Indian market include Cipla Limited, GlaxoSmithKline Pharmaceuticals Limited, Zydus Lifesciences Limited, Sun Pharmaceutical Industries Limited, Alkem Limited, Abbott India Limited, Lupin Limited, Aristo Pharma Limited, Intas Pharmaceuticals Limited, Glenmark Pharmaceuticals Limited, Mankind Pharma Limited, Torrent Pharmaceuticals Limited, Macleods Pharma and Emcure Pharmaceuticals Limited.

Government regulations

From time to time, any change in regulatory requirements in the key geographies in which we operate might require us, along with the rest of the industry, to make necessary corresponding changes in our approach. Compliance with India’s Uniform Code for Pharmaceutical Marketing Practices (“UCPMP”) was changed from voluntary to mandatory in March 2024.

Our code of conduct in all areas of work, including ethical marketing practices, our transparent guidelines for interaction with healthcare professionals, and our culture of adherence to all applicable laws help us in being compliant and adapt to any changes in the future.

Pharmaceutical industry associations such as the Organization of Pharmaceutical Producers of India (“OPPI”) have made presentations to the government on the difficulties of implementation of the UCPMP as it stands today. As a company, we continue to work with industry associations such as the Indian Pharmaceutical Alliance (“IPA”) and the Federation of Indian Chambers of Commerce and Industry (“FICCI”) on such matters of policy. The manufacturing and marketing of drugs, drug products and cosmetics in India is governed by many statutes, regulations and guidelines, including but not limited to the following:

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· The Drugs and Cosmetics Act, 1940 and the Drugs and Cosmetics Rules, 1945;

· The Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954;

· The Narcotic Drugs and Psychotropic Substances Act, 1985;

· The Drugs (Price Control) Order, 1995 and 2013, read in conjunction with the Essential Commodities Act, 1955;

· The National Pharmaceuticals Pricing Policy, 2012; and

· Uniform Code for Pharmaceutical Marketing Practices, 2024.

These statutes, regulations and guidelines govern the manufacturing, testing, packaging, labeling, storing, record-keeping, safety, approval, pricing, advertising, promotion, sale and distribution of pharmaceutical products.

An approval is required from the Ministry of Health before a generic equivalent of an existing or referenced brand drug can be marketed. When processing a generics application, the Ministry of Health usually waives the requirement of conducting complete clinical studies, although it generally requires bio-availability and/or bio-equivalence studies. “Bio-availability” indicates the rate and extent of absorption and levels of concentration of a drug product in the blood stream needed to produce a therapeutic effect. “Bio-equivalence” compares the bioavailability of one drug product with another, and when established, indicates that the rate of absorption and levels of concentration of the active drug substance in the body are equivalent for the generic drug with the previously approved drug. A generic application may be submitted for a drug on the basis that it is the equivalent of a previously approved drug. Before approving our generic products, the Ministry of Health also requires that our procedures and operations conform to current Good Manufacturing Practice (“cGMP”) regulations, relating to good manufacturing practices as defined by various countries. We must follow the cGMP regulations at all times during the manufacture of our products. We continue to spend significant time, money and effort in the areas of production and quality testing to help ensure full compliance with cGMP regulations. The timing of final Ministry of Health approval of a generic application depends on various factors, including patent expiration dates, sufficiency of data and regulatory approvals.

Pursuant to the amendments in May 2005 to Schedule Y of the Drugs and Cosmetics Act, 1940, manufacturers of finished dosages are required to submit additional technical data to the Drugs Controller General of India in order to obtain a no-objection certificate for conducting clinical trials as well as to manufacture new drugs for marketing.

On March 22, 2005, the Government of India passed the Patents (Amendment) Bill, 2005 (the “2005 Amendment”), introducing a product patent regime for food, chemicals and pharmaceuticals in India. The 2005 Amendment specifically provides that new medicines (patentability of which is not specifically excluded) for which a patent has been applied for in India on or after January 1, 1995 and for which a patent is granted cannot be manufactured or sold in India by anyone other than the patent holder and its assignees and licensees. This has resulted in a reduction of new product introductions in India for all Indian pharmaceutical companies engaged in the development and marketing of generic finished dosages and APIs. Processes for the manufacture of APIs and formulations were patentable in India even prior to the 2005 Amendment, so no additional impact results from patenting of such processes.

Under the present drug policy of the Government of India, certain drugs have been specified under the Drugs (Prices Control) Order, 2013 (the “DPCO”) as subject to price control. The Government of India established the National Pharmaceutical Pricing Authority, 2012 (“NPPA”), to control pharmaceutical prices. Under the DPCO, the NPPA has the authority to fix the maximum selling price for specified products.

During the year ended March 31, 2013, the Department of Pharmaceuticals under the Ministry of Chemicals and Fertilizers of the Government of India proposed the National Pharmaceuticals Pricing Policy, 2012, a revised National Pharmaceutical Pricing Policy to apply price controls to 348 drugs listed in National List of Essential Medicines. Some of our formulation products were subject to these price controls. The National List of Essential Medicines, as revised in 2016, now contains 376 drugs.

On March 12, 2016, the Department of Health and Family Welfare under the Ministry of Health and Family Welfare of the Government of India banned 344 fixed dose combination drugs (i.e., two or more active drugs combined in a fixed ratio into a single dosage). A number of pharmaceutical companies, including us, filed a writ petition before the Delhi High Court challenging the ban. The Delhi High Court initially granted an interim stay on the ban notification and on December 1, 2016, it overturned the government imposed ban on the 344 fixed dosage combinations. Subsequently, the Government of India filed an appeal of the decision in the Supreme Court of India. In December 2017, the Supreme Court of India referred the issue to the government’s expert body, the Drugs Technical Advisory Board (“DTAB”), for a fresh review of safety, efficacy and therapeutic justification of the drugs before recommending action. DTAB subsequently completed its review and, in September 2018, the Government of India banned 328 fixed dose combination drugs. The impact of this ban was negligible on our revenues.

On February 27, 2019, the NPPA invoked special powers granted under paragraph 19 of the DPCO, and released an Office Memorandum through which it brought 42 non-scheduled anti-cancer medications under price control by capping their trade margin (the difference between the price at which the manufacturers sell the medicines to distributors and the price paid by the end user) at 30%. This Office Memorandum had no material financial impact on our revenues.

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In November 2022, the Government of India issued the Drug (Prices Control) Amendment Order 2013. Pursuant to its terms, the NPPA issued revised ceiling prices which reduced the maximum retail prices for various formulations listed in the DPCO.

From time to time (most recently on March 31, 2025), the NPPA has announced an upward revision in the maximum prices of various drugs, as a result of positive inflation as measured by India’s Wholesale Price Index.

Such ongoing price control changes, product bans and other changes can disrupt the Indian branded pharmaceutical market and negatively impact the revenues and profitability of our Indian business and our company.

Russia and other Countries of the former Soviet Union and Romania

Russia

Russia accounted for 9% of our Global Generics segment’s revenues in the year ended March 31, 2025. IQVIA ranked us 17th in retail sales in Russia, with a market share of 1.7% for the twelve months ended March 31, 2025.

According to IQVIA, as per its moving annual total report for the twelve months ended March 31, 2025, our sales value increase was 10.0% and our sales volume decreased by 0.5% for such period, as compared to the Russian pharmaceutical market value growth of 14.3% for such period. The Russian pharmaceutical market’s volume also decreased by 2.7% for such period. We were the top ranked Indian pharmaceutical company in Russia for such period.

Our top five brands, Nise®, Omez®, Femibion®, Ibuclin® and Nasivin® accounted for 58.7% of our retail sales in Russia for the 12 months ended March 31, 2025, according to IQVIA data. Nise® (pain management product, including systemic and topical form), Omez® (an anti-ulcerant product), Femibion® (vitamins for pregnant women), Ibuclin® (for cold and flu) and Nasivin® (for cold and flu) were ranked as the 39th, 65th, 130h, 102rd and 125th best-selling formulation brands, respectively, in the Russian market by IQVIA in its retail segment report for the moving twelve months ended March 31, 2025. (Note that Nasivin® and Femibion® are distributed and promoted by us under a licensing agreement and the brand is owned by the licensor). Our strategy in Russia is to focus on the gastro-intestinal, pain management, cough and cold, allergy and oncology therapeutic areas. Our focus is on building leading brands in these therapeutic areas in prescription, over-the-counter and hospital sales.

Our Global Generics segment’s revenues measured in Indian rupees, in Russia increased by 16% during the year ended March 31, 2025 as compared to the year ended March 31, 2024. In Russian rouble absolute currency terms (i.e., Russian roubles without taking into account the effect of currency exchange rates), such revenues increased by 24% for the year ended March 31, 2025 as compared to the year ended March 31, 2024. This revenue increase was supported by higher volumes (9%), new products (8%) and higher prices (7%). All promoted brands (excluding certain products with production delay issues) showed double-digit growth. Such growth was driven in part by external factors, such as a more severe allergy season as well as stock shortages by certain of our competitors in the allergy and pain therapeutic areas.

Impact on our operations due to the military conflict between Russia and Ukraine

We operate in Russia through our subsidiary Dr. Reddy’s Laboratories LLC, Russia with an employee headcount of 911.

Since the beginning of the military conflict between Russia and Ukraine, we are continuously monitoring emerging risks in the areas of safety of employees, supply chain disruption, repatriation of funds and information technology, including cyber security related risks.

Impact on Supply Chain: We primarily source our products from India and from other European countries. Due to the ongoing geopolitical situation, our supply chain has been impacted, both in terms of increased cost to import due to higher freight costs and increase in the lead time required by our suppliers to deliver the products. However, we have been able to service our customers with timely supply of products without any significant shortages or disruptions.

Impact on information technology including cyber security risks: As part of our resiliency strategy, we have an information technology disaster recovery plan in place for our key applications in order to minimize impacts from any unanticipated events and breakdowns. We have implemented continuous threat monitoring and risk prevention for all critical and non-critical areas.

Other Countries of the former Soviet Union and Romania

We operate in other countries of the former Soviet Union, including Ukraine, Kazakhstan, Belarus, Uzbekistan and Romania. For the year ended March 31, 2025, revenues from these countries accounted for 3% of our total Global Generics segment’s revenues. Due to the military conflict between Russia and Ukraine, there has been an imposition of martial law in Ukraine. Our business in Ukraine has been marginally impacted and currently the operations are being continued with flexible schedules. All employees have been relocated to safer locations and continue to fulfill their responsibilities in hybrid format depending on local safety consideration. We continue to ensure availability of our products in these markets. Management continues to monitor the current evolving situation and respond accordingly.

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Sales, marketing and distribution network

Our marketing and promotion efforts in our Russia market is driven by a team of 565 medical representatives and 69 managers to detail our products to doctors in 70 cities in Russia. Our commercial team consists of 16 key account managers and is focused on establishing a network of relationships with key pharmacy chains. Our Russia hospital division has 32 hospital specialists focused on expanding our presence in hospitals.

In Russia, we generally extend credit only to customers after they have established a satisfactory history of payment with us. The credit terms offered to these customers are based on turnover, payment record and the number of the customers’ branches or pharmacies, and are reviewed on a periodic basis. We review the credit terms offered to our key customers on a periodic basis and modify them to take into account the macro-economic scenario in Russia.

Competition

Our principal competitors in the Russian market include Berlin-Chemie/Menarini Pharma GmbH, KRKA Pharma Limited, Teva Pharmaceutical Industries Limited, Lek-Sandoz Pharmaceuticals (an affiliate of Novartis Pharma A.G.) and Zao Ranbaxy (an affiliate of Sun Pharmaceutical Industries Limited).

Government regulations       

Healthcare system development in Russia

In order to promote local industry, in the year 2011 the Russian government approved the Strategy of Pharmaceutical Industry Development in the Russian Federation for the period up to the year 2020 (or the “Pharma 2020 plan”), which aimed to develop the research, development and manufacturing of pharmaceutical products by Russia’s domestic pharmaceutical industry.

The goal of the Pharma 2020 plan was to reduce Russia’s reliance on imported pharmaceutical products and increase Russia’s self-sufficiency in that regard. According to this program, 90% of drugs from the list of “Essential and Vital Drugs” (also known as the “ZhNVLP”) should be produced by local pharmaceutical companies. By the end of the year 2018, this target was almost achieved (84.2% vs planned 90%).

In the year 2018, the Russian government announced a new planned “Pharma-2030” program for the further development of Russian pharmaceutical production. This program was adopted by the Russian government on December 29, 2021 as amendments to the Strategy State Program “The Development of the Pharmaceutical and Medical Industry” approved by the Order of the Government of the Russian Federation No 2544. The main goal of this amended program is to increase the volume of production of Russian domestic medicines and medical devices in monetary terms by two times by 2030 as compared to 2021. The main expected results of this Strategy State Program by the end of 2030 are expected to be: an increase in the volume of production of medicines and medical devices to 1,472 billion rubles; the growth in the volume of exports of medicines and medical devices to 311 billion rubles; and an increase of up to 90% of the share of strategically important medicines, the production of which is carried out according to the full production cycle on the territory of the Russian Federation.

The Russian government approved the State Program for Healthcare System Development on December 26, 2017. The objectives of this program are increasing life expectancy at birth, reducing mortality of the working-age population, reducing mortality from circulatory diseases and tumors (including malignant ones) and raising medical care quality satisfaction.

In September 2020, the Government of the Russian Federation approved a Strategy for the development of immunoprophylaxis for the next 15 years. The document was developed on behalf of the President of Russia and defines an action plan until 2035. The strategy focuses on the immunoprophylaxis of a number of infections, such as diphtheria, measles, rubella, viral hepatitis B, and seasonal flu. The strategy's activities are divided into six main areas:

· Optimizing the national calendar of preventive vaccinations and vaccinations according to epidemiological indicators. It will include the most complete list of infections, the incidence of which is controlled by the vaccine.

· To stimulate scientific development and preclinical research in the field of creating immunobiological drugs.

· The localization of the full cycle of vaccine production in domestic organizations.

· To ensure safe conditions for immunization and pharmacovigilance of its results.

· The improvement of the state policy in the field of immunoprophylaxis of infectious diseases.

· To increase public awareness of the benefits of vaccination.

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Reference pricing regime

During the year ended March 31, 2010, the Russian government announced a reference pricing regime, pursuant to which a price freeze on certain drugs categorized as “essential”, based on a list of “Essential and Vital Drugs” (also known as the “ZhNVLP”, which was updated in 2019). This was implemented effective as of April 2010.

For the past several years, the Russian Ministry of Industry and Trade has enacted and renewed short-term government regulations under which local manufacturers (i.e., in Russia, Belarus and Kazakhstan) get a 15% price preference over non-local manufacturers in procurement tenders by the state.

A draft of “Rules for State registration and re-registration of the maximum ex-works manufacturer prices of medicines included in EDL” was published by the Russian Ministry of Health in 2017 and subsequently has undergone several changes. Federal Law No. 134-FZ dated June 6, 2019 establishes, and obligates the holder of a registration certificate for a reference drug to re-register, the maximum selling prices for drugs included in the list of vital and essential drugs. It also provides for an automatic re-registration of maximum selling prices for generics and biosimilar based on step-down coefficient.

On April 8, 2025, Russia approved Resolution No. 462, “On state regulation of prices for medicines included in the list of vital and essential medicines for medical use.”

The document establishes the possibility of accessing the aforementioned registration service electronically, including via the public services portal, and introduces some changes to process and deadlines.

The resolution comes into force on September 1, 2025 and is valid until September 1, 2031.

State Regulation of Prices for Vital and Essential Medicines

Russia’s Federal Laws No. 34-FZ dated March 8, 2015 and No. 134-FZ dated June 6, 2019 amended the Federal Law 61-FZ “On Circulation of Medicines”. The amendments created rules for the registration, manufacture and quality control of medicines, including rules for the calculation, registration and re-registration of the maximum retail prices of vital and essential medicines established by the ZhNVLP (the “EDL”).

Calculation of the maximum sale price for medicines included in the EDL list is determined by the Government of the Russian Federation taking into account a variety of economic and/or social criteria. The updated EDL lists for 2020, approved by the Decree of the Government No. 2406-p dated October 12, 2019, became effective from January 1, 2020. These lists include the list of drugs and medical supplies from the 14 Nosologies program list (which covers expensive treatments for patients with certain severe chronic diseases), as well as the minimum range of medicines required for medical aid.

Restrictions on access of foreign drugs

In 2015, the Russian Government enacted the Priority Action Plan for sustainable economic and social stability development and regulation No. 98-r. This plan and regulation affects medicines included in the EDL, and some of their key terms that have impacted the pharmaceutical industry are (i) supporting import substitution; (ii) optimizing budget costs and reducing inefficient expenses; and (iii) restrictions on access of foreign drugs to state procurement tenders, if two or more locally manufactured drugs participate in the relevant tender.

Interactions between healthcare professionals and medical product companies

Federal Law No. 323-FZ, titled “On the Fundamentals of Healthcare for Russian Citizens” imposes stringent restrictions on interactions between (i) medical and pharmaceutical workers (physicians and pharmacists), healthcare management organizations and certain other parties (collectively referred to as “healthcare professionals”) and (ii) pharmacies or companies that develop, produce or distribute drugs or medical devices (collectively referred to as “medicinal product companies”) and any representatives or intermediaries acting on their behalf (collectively referred to as “medical product representatives”).

Some of the key provisions of this law are prohibitions on:

· one-on-one meetings and communications between healthcare professionals and medicinal product representatives, except for participation in clinical trials, pharmacovigilance, group educational events for healthcare professionals and certain other events approved by Russia’s Healthcare Organization Administration and aimed to provide information on pharmacovigilance;

· the acceptance by a healthcare professional of gifts, monetary transactions (except for remuneration under contracts for clinical trials of medicinal products, clinical trials of medical devices, remuneration related to teaching and/or research activities of a healthcare professional) or any payment for entertainment, recreation, transportation to the place of recreation, as well as participation in entertainment events held at the expense of the medical product companies;

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· the agreement by a healthcare professional to prescribe or recommend a drug product or medical device (except for clinical trials of drugs or medical devices);

· receipt of samples of medicinal products, medical devices from the company, company representative for delivery to patients (except for cases related to clinical trials of medicinal products, clinical trials of medical devices)

· provision of unreliable and (or) incomplete information about the medicinal products and medical devices used when prescribing a course of treatment to a patient, including concealing information about the availability of similar medicinal products and medical devices in circulation;

· issuance of prescriptions for medicinal products and medical devices on forms (receipts) containing information of an advertising nature, as well as on prescription forms on which the name of the medicinal product or medical device is pre-printed.

Moreover, healthcare professionals shall disclose any “conflict of interest” during their routine work or in case of development and review of clinical recommendations to head of healthcare institution or head of pharmacy, the latter shall also inform the federal executive body in 7-day period. The conflict of interest shall be settled by a federal executive body which forms a designated commission.

The Federal Law 61-FZ “On Circulation of Medicines” also restricts the same interactions as described above, but further includes regulations on interactions between pharmaceutical companies and medical professionals in connection with events sponsored by pharmaceutical companies. Under these regulations, in the event that pharmaceutical companies wish to sponsor certain scientific, medical education or similar events, they are required not to:

· impale the competitors (companies that produce or sell medicinal products for medical use with a similar mechanism of pharmacological action) from participating in these events

· create discriminatory conditions for some participants as compared to other participants

· provide different amount of time for the participants' lectures, different places for demonstration of drug samples or drug advertising materials at expositions, stands, except if the time and placement difference is stipulated in the contract between organizations;

· set the fee for participants which exceeds the cost of organizing the said events and leads to an unreasonable limitation of the number of participants.

Organizations shall make certain disclosures on their websites and to Russia’s Federal Healthcare Surveillance Service (Roszdravnadzor) two months prior to event, describing the date, place and time of the event and the plans, preliminary programs and participant’s lists for discussion.

Liability for non-compliance with such restrictions extends to both the healthcare professionals and the pharmaceutical companies. No specific liability has currently been prescribed for pharmaceutical companies, however, some transactions (such as gifts and entertainment) may fall under article 19.28 of the Code of Administrative Offences (illegal remuneration on behalf of the company).

On November 24, 2021, the Ministry of Health of the Government of Russia adopted an order No. 1094n (effective until March 1, 2028) that binds physicians to prescribe medicinal products by International Nonproprietary Name (“INN”) (i.e., active substance) and in case of INN absence - by grouping or chemical name. In the absence of both INN grouping or chemical name of a drug, the drug is prescribed by a physician by trade name. In case of special medical indications (i.e. individual intolerance) by decision of the medical commission of a healthcare institution drugs that are not included in the standards of medical care or clinical recommendations may be prescribed.

Russia is a member of a common market for medicines within the Eurasian Economic Union

The Eurasian Economic Union (“EEU”) was established in January 2015 with the aim of creating a shared economic space for its members. EEU rules for the circulation of medicines have been in effect since 2017. In 2018, the information base of the pharmaceutical market of the Union was created. In 2019, the EEU began re-registering medicines under the EEU rules, which allow manufacturers in EEU countries to re-register medicines under common procedures and reduce costs.

More than three dozen medicines and medical devices have already been registered under the EEU’s rules, and more than 200 applications for registration are in process. Work is being actively carried out to inspect pharmaceutical production facilities for compliance with the rules of good manufacturing practice (“GMP”) of the EEU, and about 20 certificates have already been issued. This year the first part of the first volume of the Union Pharmacopoeia is releasing.

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In 2020-2022, the Eurasian Economic Commission (“EEC”) updated or plans to update a number of documents of the Union on good practices in the field of circulation of medicines (GMP, Good Pharmacovigilance Practice (“GVP”), and Good Clinical Practice (“GCP”), rules for registration of medicines, and requirements for inspection of pharmaceutical production. It is also continuing to develop new recommendations on certain aspects of treatment, such as clinical research, biostatistics, and peculiarities of production of certain types of drugs.

The Union Pharmacopoeia was established by Decision of College of the Eurasian Economic Commission № 100 dated August 11, 2020. According to relevant decision The Union Pharmacopoeia came into effect on March 1, 2021. Registration dossiers must be for compliance with its requirements by January 1, 2026. Decision of the Board of the Eurasian Economic Commission of August 11, 2020 No. 100 amended the Union Pharmacopoeia by including therein 144 new general pharmacopoeia articles, and also providing for amendments to a number of existing general pharmacopoeia articles. These changes came into force on April 1, 2023.

The decision of the Council of the Eurasian Economic Commission № 128 dated December 23, 2020 was made to extend for six months (until July 1, 2021) the opportunity for pharmaceutical manufacturers to choose the registration of new drugs according to the national procedure in four union states (the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan and the Kyrgyz Republic).

From July 1, 2021 (and in the Russian Federation - from January 1, 2021), new medicinal products (that is, medicinal products that are not valid registration certificates of the Member States of the Union) can be registered only in accordance with the Rules for the registration and examination of medicinal products for medical application approved by the Decision of the EEC Council No. 78 dated November 3, 2016.

Union market participants should take into account that all registration certificates issued under the “national” rules of the member states are valid until their expiration, but no later than December 31, 2025.

With regard to inspection, one of the recent innovations in this area can be considered the decree of the Government of the Russian Federation dated September 5, 2020 No. 1361 “On Amending the Rules for the Organization and Conduct of Inspection of Medicinal Products Manufacturers for Compliance with the Requirements of Good Manufacturing Practice, as well as the issuance on the compliance of the manufacturer of medicinal products with the specified requirements”. Previously, foreign drug manufacturers could confirm the fact that the discovered remarks were eliminated only during the next inspection. Now, in the event of inconsistencies, foreign companies will be able to submit a corrective action plan even before the inspection report is generated.

Mutual recognition of national GMP certificates of the EEU members was adopted. Decision of the EEC Council No. 66 of September 4, 2020 establishes for the period from 2021 to 2025, mutual recognition of, firstly, national GMP certificates of the states of the Eurasian Economic Union, secondly, GMP certificates of the Union when making changes to the registration dossier and renewing national registration certificates for medicines produced in the EEU, and thirdly, during the national registration of the Union's GMP certificates for medicines produced in third countries. These changes will make it possible to exclude the resumption of repeated inspections of drug manufacturers by the authorized bodies of the EEU states from January 1, 2021.

An important innovation is the granting of the Russian Ministry of Industry and Trade the status of an authorized organization for organizing and/or conducting pharmaceutical inspections of the production of medicines for medical use for compliance with the requirements of the GMP rules of the EEU, including jointly with the pharmaceutical inspectorates of another state which is a member of the EEU (see the Resolution of the Government of the Russian Federation of September 15, 2020 No. 1446).

A distinctive feature of 2020 is the transition to remote inspection. As of September 18, 2020, 184 such remote inspections were held by the Federal State Institution «State Institute of Drugs and Good Practices» (also known as “FSI «SID & GP»”), a subordinate agency of the Russian Ministry of Industry and Trade.

On January 30, 2024, Federal Law No. 1-FZ was adopted, amending Law No. 61-FZ “On the Circulation of Medicines”. The changes are aimed at consolidating the Russian legislation with uniform requirements for the circulation of medicines within the EEU, as well as improving existing regulation. This new law includes changes in the data exclusivity regime that (i) protects data from preclinical and clinical research for six years after the registration of the reference drug, and (ii) prohibits filing an application for registration of a generic within four years, or of a biosimilar within three years, after the registration of the reference drug.

Monitoring System of Movement of Medicines, Food Supplements and Cosmetics from the Producer to the Final Consumer

In 2019, the Ministry of Health in Russia proposed a full serialization system to track and trace the passage of pharmaceuticals through the entire supply chain, from the manufacturers to the end users, known as Markirovka or “MDLP”. The proposed federal repository and tracking system would provide the manufacturers, supply chain and end users of pharmaceuticals many functionalities. Listed below are some of the functions that would be available in addition to the usual authentication and track and trace services:

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· the system would provide price controls on products designated as vital and essential medicines;

· consumers would be able to compare the price of the drug to its official price limit, find which pharmacies do have the drug available, and get the product information;

· manufacturers would be able to get real time data on the logistics and storage of their products in the market;

· pharmacists could get information related to the price, and monitor expiration dates;

· health care institutions would be able to track registration and prices; and

· federal agencies would have capability to monitor all medicinal products on the market to facilitate price controls as well as report on and analyze the industry.

The provisions on manufacturers’ obligations to label the package with the identification marks, to submit the data to the monitoring system as well as the terms governing liability for non-compliance will become effective starting July 1, 2020. (As per Art. 2, Federal Law No. 462-FZ dated December 27, 2019).

Under Resolution of the Government of the Russian Federation of April 29, 2021 No. 673, until February 28, 2023, an experiment on labeling serialization of food supplements took place in Russia. The mandatory labeling of certain food supplements started on October 1, 2023 under Governmental Decree No 866 dated May 31, 2023.

Governmental act of the Government of the Russian Federation from 30.11.2024 No 1681 defining the mandatory labeling of cosmetics products in Russia starting from October 1, 2025.

Antimonopoly compliance in Russia

On March 1, 2020, the Russian President signed the bill setting forth the legal framework for the internal systems of antimonopoly compliance, which amends Federal Law No. 135-FZ «On protection of competition» with article 9.1 (the "Compliance Amendments"). The Compliance Amendments came into force on March 12, 2020.

The Compliance Amendments set forth the optional right of Russian companies to introduce an internal system of antimonopoly compliance which is designed to assess and prevent violations of Russian antimonopoly laws and promote internal controls for the same (the "Compliance System"). If a Compliance System is adopted by a company and properly functions, this can serve as a mitigating factor, and potentially reduce liability, in the event of an antimonopoly law violation.

This Compliance system must include at minimum:

· Requirements for the procedure to assess the risks of antitrust law violations related to the business entity's operations;

· Measures aimed at reducing the business entity's risks of violating antitrust law during its activities

· Measures for the business entity to monitor the functioning of the internal compliance system with antitrust requirements;

· Procedures for informing the entity’s employees about the internal act(s);

· Information about the official responsible for ensuring the functioning of the internal antitrust compliance system.

A Russian company may send the Compliance System to the Russian Federal Antimonopoly Service (the “FAS”) for prior approval, and approval shall be granted by the FAS in 30 calendar days. This mechanism allows minimizing risks of violation of the antimonopoly law and imposition of the respective administrative fines if the Compliance System is approved by the FAS and the company follows it in practice. This incentive was established by Clarification of FAS of Russia dated 02.07.2021 N 20 (on the system of internal compliance with antimonopoly legislation requirements).

E-Commerce for Medical Products

In light of the volatile situation with COVID-19, on April 3, 2020 the President of Russia signed Decree No. 187 dated March 17, 2020 “On Retail Trade of Medicines for Medical Use” under which online retail sales of over-the-counter medicinal products (except illegal drugs, psychedelic medicines and medicines containing over 25% of ethyl alcohol) in the Russian Federation is now permitted. In the case of prescription medicines, online retail sales are now permitted in cases of urgent medical need and emergency or where there is an “occurrence of a threat of transmission of a disease constituting a danger to the public.” The online retail sales of medicines can be undertaken by any person (including medicine manufacturers and retail traders) that trades through a licensed pharmacy and has obtained the requisite government agency permission. The law does not set forth any procedures for e-commerce authorization issuance and medical product delivery. The permits are granted by the Federal Service for Surveillance in Healthcare, also known as the Roszdravnadzor.

Russia’s Federal Laws No. 405-FZ dated October 20, 2022 amended the Federal Law 61-FZ “On Circulation of Medicines”. The amendments created rules on procedure for the retail sale of medicines, dispensed by prescription, by remote means in certain cases.

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Personal data protection

Russia has a number of recently enacted or amended laws on data protection, including the following:

● Federal Law No. 421-FZ (Effective December 11, 2024): Introduced criminal penalties for the illegal use, transmission, collection, or storage of personal data. Penalties also apply to creating or operating information resources designed for such illegal activities.

● Federal Law No. 420-FZ (Effective May 30, 2025): Imposes fines for unauthorized disclosure, misuse of biometric data, and failure to notify the Roskomnadzor (Russian data protection authority) of breaches. Fines for companies range from RUB 20m (U.S.$ 200,000) to RUB 500m (U. S$ 5 million) or 1–3% of annual revenue.

● Amendments to Federal Law No. 152-FZ Stricter Localization Rules (Effective July 1, 2025): This mandates that personal data of Russian citizens must be stored on servers within Russia. Applies to both data controllers and third-party processors. Organizations must also notify the Roskomnadzor of cross-border transfers and meet compliance standards.

Recent regulatory trends in Russia include proactive enforcement, higher penalties, and an emphasis on data sovereignty and localization, reflecting a stronger regulatory approach to privacy.

North America (the United States and Canada)

During the year ended March 31, 2025, North America (the United States and Canada) accounted for 50% of our total Global Generics segment sales. In the United States, we sell generic drugs that are the chemical and therapeutic equivalents of reference branded drugs, typically sold under their generic chemical names at prices below those of their brand drug equivalents. Generic drugs are finished pharmaceutical products ready for consumption by the patient. These drugs are required to meet the U.S. FDA or Health Canada, as applicable, standards that are similar to those applicable to their brand-name equivalents and must receive regulatory approval prior to their sale.

Generic drugs may be manufactured and marketed only if relevant patents on their brand name equivalents and any additional government-mandated market exclusivity periods have expired, been challenged and invalidated, or otherwise validly circumvented. Generic pharmaceutical companies sometimes conduct “at-risk launches”, in which the product is launched prior to resolution of a patent challenge.

Generic pharmaceutical sales increased significantly in the last decade, primarily due to an increased awareness and acceptance among consumers, physicians and pharmacists that generic drugs are the equivalent of brand name drugs, and have resulted in substantial cost savings to U.S. healthcare and further due to support by governments through passage of legislation permitting generic drug alternatives.

However, the generic pharmaceutical business has been negatively impacted by consolidation among wholesalers and retailers and the formation of group purchasing organizations (“GPOs”), which has led to increased pricing pressures in the market. In addition, accelerated approval from the U.S. FDA under the timelines of the Generic Drug User Fee Act, as amended, has led to more competition and resulted in a decline in the growth of the generic companies in North America. We intend to continue building our presence in the region by leveraging our product development capabilities and alliance management, manufacturing capacities inspected by various international regulatory agencies and access to our own APIs, which offer significant supply chain efficiencies.

Through coordinated efforts of our teams in the United States and India, we constantly seek to expand our pipeline of generic products. During the year ended March 31, 2025, we filed 10 new Abbreviated New Drug Applications (“ANDAs”) with the U.S. FDA. As of March 31, 2025, 76 generic filings were pending approval from the U.S. FDA. These are comprised of 73 ANDAs and 3 New Drug Applications (“NDAs”) filed under Section 505(b)(2) of the U.S. Federal Food, Drug, and Cosmetic Act. Of the 73 ANDAs, 44 are Paragraph IV applications, and we believe that 20 of these have the ‘First to File’ status.

We have two ongoing Investigational New Drugs (“IND”) applications for our proposed biosimilars. For Rituximab, all clinical trials have been successfully completed, and our Biologics License Application (“BLA”) and New Drug Submission (“NDS”) are under active review with the U.S. FDA and Health Canada, respectively. We also received marketing authorizations for our Rituximab product in the European Union and the United Kingdom in 2024.  For Abatacept, our clinical studies are ongoing.

We have also filed a BLA or Marketing Authorization Application (“MAA”) for our proposed biosimilar Denosumab with the U.S. FDA and the European Medicines Agency (“EMA”), respectively and our applications have been accepted for review. We also have pre-INDs opened for two other early-stage molecules.

Our Canada business generated revenues of Rs.2,731 million during the year ended March 31, 2025. This business includes revenues from certain profit sharing arrangements with distributors who market certain of our generic products. As of March 31, 2025 we have filed a cumulative total of six NDSs, one Drug Identification Number (“DIN-A”) Application, 80 Abbreviated New Drug Submissions (“ANDS”) and one Class III Natural Health Product (NHP) in Canada, out of which 52 were approved, one tentatively approved (with Intellectual Property Hold status), 14 were withdrawn or cancelled and 20 are pending approval. Additionally, Dr. Reddy’s Canada has expanded its presence in the Natural Health Products landscape, adding ten in-licensed Natural Health Products to its portfolio in the year ended March 31, 2025.

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Sales, Marketing and Distribution Network

Dr. Reddy’s Laboratories, Inc., our wholly-owned subsidiary headquartered in Princeton, New Jersey, United States, is primarily engaged in the marketing of our generic products in the United States. In early 2003, we commenced sales of generic products under our own label. We have our own sales and marketing team to market these generic products. Our key account representatives for generic products call on procurement buyers for chain drug stores, drug wholesalers and distributors, mass merchandisers, GPOs for hospitals, specialty distributors and pharmacy buying groups.

The majority of revenue from our North America Generics business is derived from sales of various products (both oral solids and OTC products) to retail chains, wholesalers and private labels, as well as sales of oral solids to other categories of customers. This portion of the business represents nearly three quarters of this segment’s gross revenues for this region. The product portfolio includes a wide range of therapeutic areas.

Our over-the-counter (“OTC”) division primarily markets and distributes store brand OTC products, but expanded into the branded OTC segment in May 2016, developing a new channel for our growth. This division has successfully launched over 25 products. OTC products include store brand generic equivalents of products that approved to be sold Over-the-counter in the U.S. market. Many of the products may also originally have had prescription drug status and are switched to OTC drug status by the innovator upon U.S. FDA approval (sometimes called “Rx-to-OTC switch” products). Our OTC division services a broad range of customers, including drug retailers, mass merchandisers, food chains, drug wholesalers, distributors, GPOs, and more recently, e-commerce or online retailers as well. Over last few years, we have substantially expanded our portfolio offering. We launched four new products in the market during the year ended March 31, 2025, which included OTC Esomeprazole Tabs, OTC Omeprazole and Sodium Bicarbonate Powder for Oral Suspension, OTC Acetaminophen and Ibuprofen Tabs and OTC Esomeprazole Mini Capsules.

During the year ended March 31, 2025, we continued to build out our presence in the Self-care and Wellness space by focusing on building out our consumer health brands as part of our innovation initiatives. This included ramping our e-commerce only brand HealthCareAisle, which included growing our share on base products and launching of multiple new products on the Amazon marketplace. We also started renovating our existing brands of Doan’s® and Habitrol® and we also completed the integration of the MenoLabs® business, which we acquired from Amyris in its Chapter 11 bankruptcy sales process back in Dec 2023. MenoLabs® is a leading women’s health and dietary supplement branded portfolio which includes multiple branded products designed to provide health support and address symptoms of perimenopause and menopause.

A portion of our revenues are derived from the sale of injectable products in the therapeutic areas of oncology and critical care. We have also expanded our presence from drug wholesalers to specialty distributors, integrated distribution networks, clinics, and hospitals to market these products. We also supply products for private label customers for injectable prescription products.

Competition

Revenues and gross profit derived from the sales of generic pharmaceutical products are affected by certain regulatory and competitive factors. As patents and regulatory exclusivity for brand name products expire, the first manufacturer to receive regulatory approval for generic equivalents of such products is generally able to achieve significant market penetration. As competing manufacturers receive regulatory approvals on similar products, market share, revenues and gross profit typically decline, in some cases significantly. Accordingly, the level of market share, revenues and gross profit attributable to a particular generic product is normally dependent upon the number of competitors and the timing of that product’s regulatory approval and launch, in relation to competing approvals and launches. Consequently, we must continue to develop and introduce new products in a timely and cost-effective manner to maintain our revenues and gross margins.

In addition, the other competitive factors critical to this business include price, product quality, consistent and reliable product supplies, customer service and reputation. Our major competitors in the United States include Teva, Viatris Inc., Sandoz (a division of Novartis Pharma A.G.), Endo International plc (including its subsidiaries Endo Pharmaceuticals Inc. and Par Pharmaceutical Inc.), Sun Pharmaceuticals Limited, Lupin Limited, Aurobindo Pharma Limited, Fresenius Kabi, Sagent Pharmaceuticals, Amneal Pharmaceuticals, Inc., Zydus Pharmaceuticals (USA) Inc., and Hikma Pharmaceuticals plc.

Consolidation of customer purchasing power through acquisitions, alliances and joint ventures impacts pricing. New manufacturers continue to enter the generic market in the United States, which may further lower our pricing power and adversely affect our revenues in that market.

Brand name manufacturers have devised numerous strategies to delay competition by introducing lower-cost generic versions of their products. One of these strategies is to change the dosage form or dosing regimen of the brand product prior to generic introduction, which may reduce the demand for the original dosage form as sought by a generic ANDA dossier applicant or create regulatory delays, sometimes significant, while the generic applicant, to the extent possible, amends its ANDA dossier to match the changes in the brand product. In many of these instances, the changes to the brand product may be protected by patent or exclusivities, further delaying generic introduction. Another strategy is the launch by the innovator or its licensee of an “authorized generic” during the 180-day generic exclusivity period, resulting in two generic products competing in the market rather than just the product that obtained the generic exclusivity. This may result in reduced revenues for the generic company which has been awarded the generic exclusivity period.

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The U.S. market for OTC pharmaceutical products is highly competitive. Competition is based on a variety of factors, including price, quality, product mix, customer service, marketing support, and the reliability and flexibility of the supply chain for products. Our competition in store brand and innovator branded products in the United States consists of several publicly traded and privately owned companies, including large brand-name pharmaceutical companies.

The competition is highly fragmented in terms of both geographic market coverage and product categories, such that a competitor generally does not compete across all product lines. In the store brand market, we compete directly with companies, such as Perrigo, Apotex, Aurobindo, Sun Pharma and Granules that sell store brand OTC products. In the branded market, we compete directly with companies, such as Bayer and GSK, which sell branded OTC products.

The competitive landscape and market dynamics of the OTC market are rapidly evolving. Large brand-name pharmaceutical companies have begun to pursue Rx-to-OTC switches more aggressively in new categories, which could present opportunities for us and other companies that sell store brand products. At the same time, pricing pressures continue to increase with the entry of new competitors in the market. On key select molecules, the expectation is that competition in this area will continue to grow as newer categories experience Rx-to-OTC switches.

Government regulations

U.S. Regulatory Environment

Pharmaceutical companies operating in the United States are subject to extensive regulation by the U.S. Food and Drug Administration (the “U.S. FDA”) and other federal agencies under statutes such as the Federal Food, Drug, and Cosmetic Act, the Hatch-Waxman Act, and the Generic Drug Enforcement Act. These regulations govern all aspects of product development and commercialization, including testing, manufacturing, labeling, storage, distribution, and marketing.

Our facilities and products are routinely inspected by the U.S. FDA to ensure compliance with current Good Manufacturing Practices (“cGMP”). Non-compliance may result in significant enforcement actions, including warning letters, product recalls, import alerts, suspension of manufacturing or distribution, and civil or criminal penalties. The U.S. FDA also has the authority to deny or revoke product approvals and halt operations of non-compliant facilities.

We invest substantial resources in quality systems, regulatory compliance, and manufacturing excellence to maintain high standards and ensure uninterrupted market access for our generic products in the United States.

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U.S. FDA approval timelines for ANDAs are influenced by patent challenges and statutory exclusivity periods, including “Pediatric Exclusivity” that adds six months to existing exclusivity if pediatric studies are conducted for eligible products, “Orphan Drug Exclusivity” that grants seven years of market exclusivity for drugs treating rare diseases and “180-Day Exclusivity” that is available to first Paragraph IV filers, subject to forfeiture under certain conditions per the Medicare Modernization Act of 2003. These regulatory frameworks significantly impact the timing and ability to bring generic products to market in the United States.

The U.S. Controlled Substances Act (“CSA”) establishes a closed system for the distribution of controlled substances, overseen by the Drug Enforcement Administration (“DEA”). Entities involved in the manufacture, distribution, import, or export of controlled substances must register annually and comply with stringent requirements related to security, recordkeeping, and reporting. The DEA categorizes substances into five schedules based on potential for abuse and medical use.

Non-compliance can result in civil penalties, registration revocation, or criminal prosecution. In early 2025, the DEA introduced new regulations for prescribing controlled substances via telehealth, aiming to balance access to care with safeguards against misuse.

Title XI of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (“MMA”)

On October 6, 2016, the U.S. FDA issued a final rule to implement new regulations that govern the approval of applications under Section 505(b)(2) of the Federal Food, Drug and Cosmetic Act (“FD&C Act”) in the United States, and of ANDAs. This rule revised and clarified U.S. FDA regulations as to matters such as: the procedures and requirements for providing notice to each patent owner and the NDA holder of certain patent certifications made by applicants submitting 505(b)(2) applications or ANDAs; the availability of 30-month stays of approval on 505(b)(2) applications and ANDAs that are otherwise ready to be approved; submission of amendments and supplements to 505(b)(2) applications and ANDAs; and the types of bioavailability and bioequivalence data that can be used to support these applications. This rule was effective December 5, 2016

FDA Safety and Innovation Act and User Fee Programs

The Food and Drug Administration Safety and Innovation Act (“FDASIA”) of 2012 strengthened oversight of the U.S. drug supply chain by requiring routine U.S. FDA inspections of both domestic and foreign manufacturers. It also introduced the Generic Drug User Fee Act (“GDUFA”) and Biosimilar User Fee Act (“BsUFA”), enabling the U.S. FDA to collect user fees to support the review of generic and biosimilar applications.

The FDA Reauthorization Act of 2017 (“FDARA”) extended these programs through 2022, introducing new fee structures and review goals to improve efficiency. FDARA also established the Competitive Generic Therapy (“CGT”) designation to promote competition in markets with limited generic options, offering potential 180-day exclusivity.

Subsequent reauthorizations—GDUFA III and BSUFA III—effective through 2027, continue to enhance regulatory efficiency, support first-cycle approvals, and improve communication between the FDA and industry. These programs also address emerging issues such as nitrosamine impurity risk and complex product development.

The Prescription Drug User Fee Act (“PDUFA”) VII was reauthorized in 2024, which includes provisions to enhance the U.S. FDA's ability to review and approve new drugs more efficiently.

Other Recent Developments and Trends for the U.S. FDA

In recent years, the U.S. FDA has undertaken several initiatives to modernize and streamline regulatory processes. In October 2024, the agency began a reorganization aimed at improving operational efficiency. The U.S. FDA continues to prioritize accelerated approval pathways and is exploring the use of emerging technologies, such as artificial intelligence, in clinical trials and drug evaluations.

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The agency expanded its authority over drug advertising through the implementation of a final rule aimed at improving the clarity and transparency of direct-to-consumer (“DTC”) prescription drug advertisements on television and radio. It also issued final guidance in August 2023 on acceptable intake limits for nitrosamine impurities and draft guidance in February 2024 on reporting manufacturing disruptions under section 506C of the FD&C Act.

In March 2025, the U.S. administration announced plans to reduce U.S. FDA staffing by 3,500 positions, potentially impacting drug review timelines. These developments reflect the U.S. FDA’s evolving regulatory landscape and may influence the timing and approval of generic drug applications.

Prescription Drug Marketing Act and Laws Regulating Payments to Healthcare Professionals

The U.S. FDA also enforces the requirements of the Prescription Drug Marketing Act, which, among other things, imposes various requirements in connection with the distribution of product samples to physicians. Sales, marketing and scientific/educational grant programs must comply with the federal anti-kickback statute, the Medicare-Medicaid Anti-Fraud and Abuse Act, as amended, the False Claims Act, as amended, and similar state laws. Pricing and rebate programs must comply with the Medicaid rebate requirements of the Omnibus Budget Reconciliation Act of 1990, as amended.

We are also subject to Section 6002 of the Patient Protection and Affordable Care Act, commonly known as the Physician Payment Sunshine Act, which regulates disclosure of payments to certain healthcare professionals and providers.

Patient Protection and Affordable Care Act and Medicaid Drug Rebate Program

The Patient Protection and Affordable Care Act (“ACA”) of 2010 requires individuals to have health insurance and to control the rate of growth in healthcare spending through, among other things, stronger prevention and wellness measures, increased access to primary care, changes in healthcare delivery systems and the creation of health insurance exchanges.

The ACA requires the pharmaceutical industry to share in the costs of reform by increasing Medicaid rebates, expanding Medicaid rebates to Medicaid managed care programs and funding of pharmaceutical costs for Medicare patients in excess of the prescription drug coverage limit and below the catastrophic coverage threshold. Additionally, the ACA established a branded prescription drug fee that pharmaceutical manufacturers of certain branded prescription drugs must pay to the federal government.

The Centers for Medicare & Medicaid Services (“CMS”) administers the Medicaid drug rebate program, in which pharmaceutical manufacturers pay quarterly rebates to each state Medicaid agency. Rebate calculations and price reporting rules are complex, but are generally based on the average manufacturer price and/or commercial best price for the product.

The American Rescue Plan Act of 2021, enacted in March 2021, included a provision eliminating the statutory cap on rebates that drug manufacturers pay to Medicaid programs for Medicaid-covered drugs, which eliminated the rebate cap of 100% of the average manufacturer price (“AMP”) beginning January 1, 2024.

Various state Medicaid programs have implemented voluntary supplemental drug rebate programs that may provide states with additional manufacturer rebates in exchange for preferred status on a state’s formulary or for patient populations that are not included in the traditional Medicaid drug benefit coverage.

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Drug Quality and Security Act and Drug Supply Chain Security Act

The Drug Supply Chain Security Act (DSCSA), enacted in 2013, established a federal system for tracking prescription drugs through the U.S. supply chain. It mandates serialization of drug packages and electronic traceability to enhance drug distribution security and prevent counterfeit products. As of November 27, 2023, all trading partners are required to use secure, interoperable electronic systems to exchange and verify transaction data at the package level.

The law also strengthened licensing requirements for wholesale distributors and third-party logistics providers. In October 2024, the U.S. FDA granted temporary exemptions from certain DSCSA requirements to allow additional time for trading partners to implement necessary data connections.

Biologics Pathway

The Biologics Price Competition and Innovation Act of 2009 (“BPCIA”) created a statutory pathway and abbreviated approval processes for the approval of biosimilar versions of branded biological products. Under the BPCIA, a biosimilar must be highly similar with no clinically meaningful differences compared to the reference medicine. Approval of a biosimilar in the United States requires the submission of a BLA to the U.S. FDA, including an assessment of immunogenicity, and pharmacokinetics or pharmacodynamics. The BLA for a biosimilar can be submitted as soon as four years after the initial approval of the reference biologic, but can only be approved 12 years after the initial approval of the reference biologic.    This pathway is still relatively new and some aspects remain untried, controversial and subject to ongoing litigation. Though the U.S. FDA has issued and updated various technical guidance documents addressing quality considerations, scientific considerations and questions and answers regarding commonly posed issues to assist the biopharmaceutical industry in developing biosimilar products in compliance with the BPCIA, there remains some uncertainty regarding the abbreviated biosimilar pathway. On December 11, 2018, the U.S. FDA released final guidance defining biologics, transitioning biological products approved under an NDA to a deemed BLA, and outlining an abbreviated pathway for biosimilar licensure. As part of the publication of the final guidance, the U.S. FDA is allowing for ongoing comments from the public, which may result in further changes or revisions to such guidance. On May 10, 2019, the U.S. FDA issued final guidance on “Considerations in Demonstrating Interchangeability with a Reference Product,” which is intended to provide guidance as to how to demonstrate that a proposed therapeutic protein product is interchangeable with a reference product for the purposes of submitting a marketing application or supplement under section 351(k) of the Public Health Service Act (PHS Act) (42 U.S.C. 262(k)).

21st Century Cures Act

On December 13, 2016, the 21st Century Cures Act was enacted into law in the United States, and was intended to promote biomedical innovation and personalized medicines. The 21st Century Cures Act increased funding for the National Institutes of Health and the U.S. FDA and provided for the implementation of, among other reforms, enhanced pathways for medical product approval and the modernization and harmonization of clinical trial procedures over a period of several years.

Blueprint to Lower Drug Prices and Safe Importation Action Plan

In May 2018, U.S. President Trump released “American Patients First: The Trump Administration Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs,” which outlined actions that his administration proposed to take to lower prescription drug prices, including certain actions that would be taken immediately by the U.S. Department of Health and Human Services (“HHS”) and issues on which HHS would solicit public feedback before determining any additional reform proposals. This blueprint sought to increase competition, improve negotiation, and incentivize lower list prices and lower out-of-pocket costs.

 It called for, among other things, greater transparency of drug prices, better informing consumers about prescription drugs, increased promotion of generic drugs and experimenting with value-based payment. We are currently evaluating the impact of this blueprint on our business, and we cannot yet be certain what the effect will be.

To create better incentives for lower list prices, the blueprint called for HHS to consider requiring the inclusion of list prices in direct-to-consumer advertising.

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On May 30, 2018, the CMS announced a final rule that requires direct-to-consumer television advertisements for prescription pharmaceuticals covered by Medicare or Medicaid to include the list price if such price is equal to or greater than $35 for a month’s supply or the usual course of therapy. This rule became effective starting on July 9, 2019.

The U.S. Department of Health and Human Services and U.S. FDA’s Safe Importation Action Plan was announced in July 2019. Following this framework, the U.S. FDA proposed a draft rule in December 2019 that would allow importation of certain lower-cost prescription drugs from Canada, and in September 2020 the rulemaking was finalized by the U.S. FDA along with an industry guidance document. The new rule became effective on November 30, 2020, although its implementation has been delayed and its impact is uncertain, in part because lawsuits have been filed challenging the government’s authority to promulgate it.

State Efforts to Lower Drug Prices

A number of states have passed legislation intended to impact pricing or requiring price transparency reporting, including among others California, Colorado, Connecticut, Louisiana, Maine, Maryland, Nevada, Oregon, Texas, Vermont, and Washington, and a number of other states have proposed such legislation is recent years. While the disclosure requirements vary by state, these laws typically require manufacturers to report certain product price information or other financial data to the state, and, in some cases, provide advance notification of price increases. It is expected that states will continue their focus on pharmaceutical price transparency and that this focus will continue to exert pressure on product pricing. 

Final Conscience Rule

In May 2019, the U.S. Department of Health and Human Services (“HHS”) published final rules to enforce so-called “conscience laws,” a series of previously enacted laws that allow health professionals, insurers and employers to opt out of participating in certain health care activities that violate the worker's conscience or religious beliefs, such as abortion, sterilization, vaccination or assisted suicide. The final rule would significantly expand the authority of HHS’s Office of Conscience and Religious Freedom to enforce federal conscience protection laws and implement new enforcement mechanisms. The conscience laws and the final rule could potentially impact certain pharmaceutical products, including the availability of such products from hospitals and other prescribers and the availability of insurance coverage for such products. A number of lawsuits were filed challenging the final rule’s constitutionality and, before it became effective, three federal courts in New York, Washington and California issued rulings invalidating the final rule. Although the Trump administration appealed these decisions, the Biden administration subsequently moved to delay the appeals, indicating that new leadership at HHS would reassess the rule. Accordingly, the overall status of the final conscience rule is uncertain. We are currently evaluating the impact of these conscience laws and the final rule on our business, and we cannot yet be certain what their effect will be.

Coronavirus Aid, Relief, and Economic Security (“CARES”) Act 2020

The CARES Act, enacted in March 2020 in response to the COVID-19 pandemic, expanded the U.S. FDA’s authority to address drug shortages and modernize regulatory oversight. It mandated annual reporting of drug manufacturing volumes and enhanced supply chain transparency. The Act also introduced reforms to the regulation of over-the-counter (“OTC”) monograph drugs, replacing the rulemaking process with an administrative order system and establishing a user fee program to support timely U.S. FDA reviews.

Additionally, the U.S. FDA issued guidance on remote regulatory assessments and risk management plans to mitigate drug shortages. Although the COVID-19 public health emergency expired in May 2023, the U.S. FDA remains actively engaged in pandemic-related oversight and preparedness.

The Inflation Reduction Act and Certain Government Programs

The Inflation Reduction Act (“IRA”) of 2022 was signed into law in August 2022. The IRA restructures Medicare’s benefit design and requires manufacturers of certain drugs to engage in price negotiations with Medicare, imposes rebates and discount requirements under Medicare Part B and Medicare Part D, and replaces the Part D coverage gap discount program with a new discounting program. In particular, the U.S. Department of Health and Human Services (“HHS”) is directed to negotiate a subset of medicines with the highest annual expenditures to Medicare Parts B and D that have been on the market for 9 years (or 13 years for biologics) without an available generic (or biosimilar) on the market. Drugs with an available generic or biosimilar, certain drugs that represent a limited portion of Medicare program spending, drugs with an orphan designation as their only U.S. FDA approved indication, and all plasma-derived products are exempt from direct negotiation. The law allows HHS to levy an excise tax and civil monetary penalties against non-compliant manufacturers or those who refuse to negotiate.

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The IRA also imposes rebate requirements on manufacturers of single-source generics and other drugs covered under Medicare Part B and Part D where the price increases of the drug outpaces inflation. Multisource generics and all products with an average manufacturer’s price less than $100 per year, per individual, are exempt from rebate requirements. The Centers for Medicare and Medicaid Services (“CMS”) will monitor for products with price increases higher than the rate of inflation on a quarterly basis. Rebates will be calculated as the total number of units sold multiplied by the amount the product exceeds the inflation-adjusted price, with 2021 as the base year to measure cumulative changes relative to inflation. Noncompliant manufacturers will be subject to a civil monetary penalty of at least 125% of the calculated rebate amount.

The CMS administers the Medicaid drug rebate program, in which pharmaceutical manufacturers pay quarterly rebates to each state Medicaid agency. Generally, for generic drugs marketed under ANDAs, manufacturers (including Teva) are required to rebate 13% of the average manufacturer price, and for products marketed under NDAs or BLAs, manufacturers are required to rebate the greater of 23.1% of the average manufacturer price or the difference between such price and the commercial best price during a specified period. An additional rebate for products marketed under ANDAs, NDAs or BLAs is payable if the average manufacturer price increases at a rate higher than inflation and other methodologies apply to new formulations of existing drugs.

All state Medicaid programs have implemented voluntary supplemental drug rebate programs that may provide states with additional manufacturer rebates in exchange for preferred status on a state’s formulary or for patient populations that are not included in the traditional Medicaid drug benefit coverage. In addition, a number of states, including New York, have enacted legislation that requires entities to pay assessments or taxes on the sale or distribution of opioid medications in order to address the misuse of prescription opioid medications. Finally, a number of states have implemented IRA-like price controls on pharmaceutical manufacturers. These proposals create new authorities for state regulatory bodies to limit reimbursement for certain drugs. Such efforts may expand to additional states.

Other matters

Refer to Note 32 (“Contingencies”) of our consolidated financial statements for discussions of the following lawsuits, investigations and proceedings:

· Ranitidine recall and litigation;

· United States Antitrust Multi-District Litigations; and

· Revlimid® Antitrust Litigation.

CANADA REGULATORY ENVIRONMENT

In Canada, we are required to file product dossiers with the Health Canada for permission to market a generic pharmaceutical product. The regulatory authorities may inspect our manufacturing facility before approval of the dossier. As of March 31, 2025 we have filed a cumulative total of six New Drug Submission (“NDS”), one Drug Identification Number (“DIN-A”) Application, 80 Abbreviated New Drug Submissions (“ANDS”) and one Class III Natural Health Product (NHP) in Canada, out of which 52 were approved, 1 tentatively approved (IP Hold), 14were withdrawn or cancelled and 20 are pending approval. Additionally, Dr. Reddy’s Canada has expanded its presence in the Natural Health Products landscape, adding ten in-licensed Natural Health Products to its portfolio in the year ended March 31, 2025.

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Europe

Our sales of generic medicines in Europe for the year ended March 31, 2025 were Rs.35,882 million, which accounted for 12% of our Global Generics segment’s sales. Our principal markets in Europe are Germany, France, Italy, Spain, and United Kingdom as well as the global portfolio outside of the United States of consumer brands in the Nicotine Replacement Therapy category which we acquired from Haleon UK Enterprises Limited (the “Acquired NRT Business”). In addition, through distribution partners we access our portfolio of hospital customers. These markets include Austria, Albania Belgium, Czech Republic, Denmark, Finland, Ireland, Kosovo, Netherlands, Poland, Portugal, Slovakia, Norway, and Sweden.

Sales, Marketing and Distribution Network

Germany

In Germany, we sell a broad range of generic pharmaceutical products under the “betapharm” brand. The German generics market continues to be centered on affordability and significantly contributes to controlling the country’s healthcare system’s costs. Since the healthcare reform by the government in 2007, Germany has largely operated a tender-like system for generic procurement. Statutory health insurance funds have enacted tender (i.e., competitive bidding) processes to determine which pharmaceutical companies they will enter into rebate contracts with. This has resulted in more than 90% of generic products currently sold in German retail outlets being supplied through contracts procured in competitive bidding tenders, thereby causing significant pressure on product margins.

Germany – acquisition of medical Cannabis Business Nimbus Health

The acquisition of Nimbus Health GmbH (“Nimbus Health”) in February 2022 marked our entry into the medical cannabis sector. Founded in 2018, Nimbus Health is one of Germany’s pioneer companies for medical cannabis. The acquisition allows us to build on Nimbus Health’s strengths and introduce medical cannabis-based medicines as a promising treatment option for patients. The acquired company operates under the brand Nimbus Health and is our wholly-owned subsidiary. Germany is one of the only markets where statutory health insurance funds reimburse medical cannabis under certain conditions. In April 2024, Germany legalized the possession and consumption of limited quantities of cannabis, marking another shift in the legal treatment and cultural acceptance of cannabis.

Switzerland - acquisition of Haleon’s Global Portfolio of Consumer Health Brands

During the year ended March 31, 2025, we completed the acquisition of Haleon UK Enterprises Limited’s global portfolio of consumer healthcare brands, outside of the United States, in the Nicotine Replacement Therapy category. We continue to manage this business, including contract manufacturing activities, from Switzerland. (Refer to Note 36.B. (“Business combination - Business transfer agreement with Haleon”) of our consolidated financial statements for further details).

United Kingdom and other Countries within Europe

We market our pharmaceutical products in the United Kingdom through our U.K. subsidiary, Dr. Reddy’s Laboratories (U.K.) Limited, which was formed in 2003.We currently sell more than 65 products in the United Kingdom, covering both International Nonproprietary Name generics, branded generics, biosimilars and over-the-counter medicines. Our portfolio is sold via wholesale, retail and hospital channels, OTC products are available in mass channels and via e-commerce channels. While the retail business covers a broad range of therapeutic areas, the hospital business focuses on key areas such as oncology, anti-invective and HIV. In this fiscal year, we launched our first private label product to leading pharmacy chain continuing our efforts in OTC segment. We have successfully started distribution of the biosimilars in UK, launching bevacizumab with brand name Versavo.

Through our subsidiaries in France, Italy and Spain we have established ourselves as a trusted partner for the countries hospitals segment.

Our product mix in these markets focuses on a limited number of key therapy areas such as pulmonary hypertension, oncology, anti-infective and HIV, leveraging our portfolio.

We work with partners who make our products available in Austria, Albania Belgium, Czech Republic, Denmark, Finland, Ireland, Kosovo, Netherlands, Poland, Portugal, Slovakia, Norway, and Sweden. This strategy allows us to scale our operations across Europe.

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Competition

The German market is highly competitive as a result of a large number of generic players and the predominance of a tender system which drives competition. Our key competitors within the German generics market include Sandoz International GmbH, Teva Pharmaceutical Industries Limited (“Teva”), Zentiva Pharma GmbH and Stada Arzneimittel AG.

According to the British Generic Manufacturers Association, the United Kingdom is one of the largest markets for generic pharmaceuticals in Europe, with generic penetration of around 84%, and is also one of the most price competitive markets due to a high degree of vertical integration and consolidation of buyers, as more than approximately 60% of the retail pharmacies are owned by wholesalers or are part of retail chains. In addition, the market has relatively low barriers of entry. The generic market is dominated by global pharmaceutical companies such as Teva, Accord, and Sandoz.

In Italy, Spain and France, we compete with companies such as, Zentiva, Ever Pharma, Medac, Teva and Accord Healthcare Limited (an affiliate of Intas Pharmaceuticals Ltd.), each of which has a well-established presence in the hospital segment of these countries.

Government regulations

In the EU, the manufacture and sale of pharmaceutical products is regulated in a manner substantially similar to that in the United States. Legal requirements generally prohibit the handling, manufacture, marketing and importation of any pharmaceutical product unless it is properly registered and manufactured in accordance with applicable law. The registration file relating to any particular product must contain scientific data related to product chemistry, efficacy and safety, including results of clinical testing and references to medical publications, as well as detailed information regarding production methods and quality control. Regulatory authorities are authorized to suspend, restrict or cancel the registration of a product if it is found to be harmful or ineffective, or manufactured and marketed other than in accordance with registration conditions. Additionally, a product registration can be cancelled, if the registration is not used for more than three years (under the regulation’s “sun-set clause”) or the renewal deadline is missed based on local regulations.

The activities of pharmaceutical companies within the EU are governed in particular by Directives 2001/83/EC and 2003/94/EC and Regulation 1234/2008, in each case as amended, and as implemented in national laws within the countries of the EU. The Directives outline the legislative framework, including the legal basis of marketing authorization procedures, and quality standards including manufacture, patient information and pharmacovigilance activities.

Prior approval of a marketing authorization is required to supply products within the EU. Such marketing authorizations may be restricted to one-member state, cover a selection of member states or can be for the whole of the EU, depending upon the type of registration procedure selected.

An abridged application can be filed for obtaining EU marketing authorization for a generic drug. Generic or abridged applications contain limited non-clinical and clinical data, depending upon the legal basis of the application or to address a specific issue. However, the applicant is required to demonstrate that its generic product contains the same active pharmaceutical ingredients in an equivalent dosage form for the same indication as the innovator product.

Specific data is included in the application to demonstrate that the proposed generic product is interchangeable to the innovator product with respect to quality, safe usage and continued efficacy. EU laws prevent regulatory authorities from accepting applications for registration of generics that rely on the safety and efficacy data of an innovator of a branded product until the expiration of the innovator’s data exclusivity period (usually eight years from the first marketing authorization in the EU, depending on the circumstances). The applicant is also required to demonstrate bioequivalence or bioavailability, respectively, with the EU reference product. Once all these criteria are met, a marketing authorization may be considered for grant.

Unlike in the United States, there is no equivalent regulatory mechanism within the EU to incentivize challenge to any patent protection, nor is any period of market exclusivity conferred upon the first generic approval.

In situations where the period of data exclusivity given to the innovator of a branded product expires before their patent expires, the launch of our product would then be delayed until patent expiration.

Our U.K. facilities are licensed and periodically inspected by the U.K. Medicines and Healthcare Products Regulatory Agencies (“MHRA”) good manufacturing practice Inspectorate, which has extensive enforcement powers over the activities of pharmaceutical manufacturers. Non-compliance can result in product recall, plant closure or other penalties and restrictions. In addition, the MHRA Inspectorate has approved and periodically inspected our manufacturing facilities based in Hyderabad and Vishakhapatnam, India, for the manufacture of generic medicines for supply to the United Kingdom.

All pharmaceutical companies that manufacture and market human medicinal products in Germany are subject to the applicable rules and regulations executed by the Federal Institute for Drugs and Medical devices (“BfArM”) or the Paul-Ehrlich-Institut and the supervisory authorities of the respective federal state in Germany.

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All pharmaceutical companies in Upper Bavaria, Germany are periodically inspected by the Regierung von Oberbayern (the district government of Upper Bavaria in Germany), which has extensive enforcement powers over the activities of pharmaceutical companies. Non-compliance can result in closure of the facility. The Regierung von Oberbayern has approved and periodically inspected our manufacturing facilities in Hyderabad and Visakhapatnam, for the manufacture of generic medicines for supply to Europe.

The German Social Code’s price freeze imposed on reimbursable drugs, which was due to expire at the end of 2017, was extended until December 31, 2022 for all patent free drugs launched before August 1, 2010, although the continued price freeze will not apply to medicines subject to internal reference pricing. The SHI Financial Stabilisation Act of 2022 extended the price moratorium until December 31, 2026.

European pharmacovigilance was reinforced through adoption of Regulation (EU) No 1235/2010 and Regulation (EU) No 1027/2012, amending Regulation (EC) No 726/2004 and Directives 2010/84/EU) and Directive 2012/26/EU amending Directive 2001/83/EC, the operational aspects of implementing the new legislation being governed by Commission Implementing Regulation No 520/2012.

Regulation 205B (Guidance in respect of good pharmacovigilance practice and post authorization efficacy studies) of the U.K. Human Medicines Regulations 2012, as inserted by regulation 169 of SI 2019 No. 775, states that the guidance issued by the Commission under Article 108a of the 2001 Directive on good pharmacovigilance practices (“GVP”) continues to apply to both the MHRA and U.K. marketing authorization holders until the date on which the MHRA publishes guidance on GVP. It also states that while the Commission guidance on GVP continues to apply in the United Kingdom, the MHRA may determine that specific provisions of it no longer apply in the United Kingdom or are to be read subject to modification.

The International Standards for Identification of Medicinal Products (“IDMP”), comprising five International Organization for Standardization (“ISO”) standards, were approved in calendar year 2012. These standards are designed to allow unambiguous identification of medicinal products across companies and regions in order to support and improve pharmacovigilance and other activities.

For various reasons, the implementation of IDMP has experienced a series of delays. However, the EMA has now published the Product Management Service system publicly and transferred the authorized products data from its current SIAMED and xEVMPD systems. At present, marketing authorisation holders (“MAHs”) are required to submit the data through xEVMPD. Eventually, direct updates to the new system are expected to occur after 2025.

The EMA has adopted the Health Level 7 Fast Healthcare Interoperability Resources messaging standard for the EU wide implementation of IDMP, and the full implementation will happen through four domains: Substance, Product, Organization, and Reference Data.

The submission of medicinal product data to support pharmacovigilance has been required since 2012 in the EU. The original European database for data regarding medicinal products, the Eudravigilance Medicinal Product Dictionary (“EVMPD”), was launched by the EMA at the end of 2001. It was designed to standardize the collection, reporting, coding, and evaluation of authorized and investigational medicinal product information. In 2012 it became mandatory for marketing-authorization holders to supply information to the extended version of the EVMPD (xEVMPD or Article 57 database). However, this currently contains only a fraction of the data that eventually will have to be submitted to the IDMP-compliant database for each authorized product in the EU. In order for us to support the maintenance of medicinal product data in the IDMP-compliant database, we will have to make significant changes to our processes and procedures.

To prevent counterfeit medicines from entering the supply chain, in October 2015, as part of the Falsified Medicines Directive (the “FMD”), the European Commission adopted regulations providing detailed rules for the safety features appearing on the packaging of medicinal products for human use. Accordingly, all medicinal products generally subject to prescription must bear safety features that facilitate specifically the identification of individual packs and the verification of their authenticity. Effective as of February 9, 2019, we have successfully implemented the FMD and only those prescription drugs which have a unique serial number on the pack, and where the integrity of the pack can be seen, have been placed on the market ever since.

The decision for the United Kingdom to exit from the EU (the “Brexit”) and the related Windsor Framework agreement between the EU and the U.K. has impacted pharmacovigilance operations. The Brexit transition period ended as of December 31, 2020 and the MHRA issued guidance for the pharmaceutical industry to follow from January 1, 2021. The requirements include the appointment of a “Qualified Person” for pharmacovigilance for U.K. nationally authorized products. The MHRA will continue to support EU harmonized approaches for certain safety data, but require U.K. specific supplemental information to be provided. In addition, parallel, U.K. specific processes must be implemented for certain activities including adverse event reporting. These additional requirements are expected to result in increased costs for the marketing authorization holders (“MAHs”). Effective as of January 1, 2025, packaging of U.K. medicines is subject to new regulations under the Windsor Framework agreement.

In the EU, there must be at least a “Qualified Person” who is responsible for a medicinal product’s batch certification and release. Each batch of an imported medicinal product placed onto the market in the EU must be re-tested in a laboratory in the EU prior certification. The MAH’s Qualified Person, or a qualified partner, must then certify that the product is in accordance with the requirement of Annex 16 of the EU-GMP Guidelines (Certification by a Qualified Person and Batch Release) and can therefore be released to the market. As a consequence of the Brexit, this activity will no longer be able to be conducted in the United Kingdom for the EU. Following the Brexit vote, the EU moved the headquarters of the EMA from the United Kingdom to the Netherlands in March 2019.

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In the European Union, the term of certain pharmaceutical patents may be extended by up to five years (subject to further patent term extension under certain conditions) through a Supplementary Patent Certificate (“SPC”). The purpose of this extension is to compensate for the patent term lost during regulatory review processes.

Effective July 2019, the European Union’s new SPC Manufacturing Waiver Regulation exempts businesses which satisfy its conditions from infringement of a pharmaceutical product protected by a SPC. The exemption covers the manufacture of a product for either the purpose of exporting it to countries outside the European Union, during the entire term of the SPC or for the purpose of manufacturing and stockpiling the product within six months before the SPC expires for launch in the European Union immediately upon SPC expiration.

“Rest of the World” markets of our Global Generics segment

We refer to all markets of our Global Generics segment other than North America, Europe, Russia and other countries of the former Soviet Union and Romania and India as our “Rest of the World” markets. Our significant Rest of the World markets include Brazil, South Africa, China, Vietnam, Colombia, Australia and Myanmar.

We started our operations in China in the year 2000, by setting up a joint venture in the city of Kunshan, Jiangsu Province. Over the past several years, our joint venture called Kunshan Rotam Reddy Pharmaceuticals Company Limited (“KRRP”) has commercialized several products. Some of these products are manufactured by KRRP at its manufacturing plant in Kunshan while some others are imported in bulk packs, repackaged and sold in China. In calendar year 2020, KRRP started manufacturing capacity expansion at the Kunshan facility, and commercial operations started in the second half of the calendar year 2024.

Over the last few years, we have also increased our operations with respect to the filing of dossiers and obtaining new product registrations in China. Upon successful registration and approval by the China regulatory authorities, we intend to launch these products in the coming years.

Our product Olanzapine, which we had commercialized in China through a distribution and supply agreement with a Chinese company, was successfully listed in volume based procurement program, which is a tender-style bidding system for centralized procurement of medicines in China.

For the year ended March 31, 2025, revenues from our “Rest of the World” markets accounted for 7% of our total Global Generics segment’s revenues. Our revenues from our “Rest of the World” markets were Rs.19,894 million in the year ended March 31, 2025, growth of 12% as compared to the year ended March 31, 2024. This increase was largely due to new product launches and strong business performance in Brazil and Africa.

Global Generics Manufacturing and Raw Materials

Manufacturing for our Global Generics segment entails converting API into finished dosages. As of March 31, 2025, we had ten manufacturing facilities within this segment located in India, including four in a Special Economic Zone. All of the facilities are designed in accordance with and are compliant with current cGMP requirements and are used for the manufacture of tablets, hard gelatin capsules, injections, liquids and creams for sale in India as well as other markets. All of our manufacturing sites’ laboratories and facilities are designed and maintained to meet increasingly stringent requirements of safety and quality. Each of our sites outside of India is approved by the respective regulatory body in the jurisdiction it is located.

We manufacture most of our finished products at these facilities and also use contract manufacturing arrangements as we determine necessary. For each of our products, we continue to identify, upgrade and develop alternate vendors as part of risk mitigation and continual improvement.

The ingredients for the manufacture of the finished products are sourced from in-house API manufacturing facilities and from vendors, both local and non-local. Each of these vendors undergo a thorough assessment as part of the vendor qualification process before they qualify as an approved source. We attempt to identify more than one supplier in each drug application or make plans for alternate vendor development from time to time, considering the supplier’s history and future product requirements. Arrangements with international raw material suppliers are subject to, among other things, respective country regulations, various import duties and other government clearances. The prices of our raw materials generally fluctuate in line with commodity cycles. Raw material expense forms the largest portion of our cost of revenues. We evaluate and manage our commodity price risk exposure through our operating procedures and sourcing policies.

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The logistics services for storage and distribution in the United States, the European Union, Russia, Brazil, South Africa, Australia and other emerging markets are outsourced to third party service providers.

We manufacture formulations in various dosage forms including tablets, capsules, injections, liquids and creams. These dosage forms are then packaged, quarantined and subject to stringent quality tests, to assure product quality before release into the market.

All pharmaceutical manufacturers that sell products in any country are subject to regulations issued by the Ministry of Health (or its equivalent) of the respective country. These regulations govern, or influence the testing, manufacturing, packaging, labeling, storing, record-keeping, safety, approval, advertising, promotion, sale and distribution of products.

Our facilities and products are periodically inspected by various regulatory authorities such as the U.S. FDA, the U.K. MHRA, the German BfARM, the South African Medicines Control Council, the Brazilian ANVISA, the Romanian National Medicines Agency, Ukrainian State Pharmacological Center, the local World Health Organization and Drug Control Authority of India, all of which have extensive enforcement powers over the activities of pharmaceutical manufacturers operating within their jurisdiction.

In May 2024, the U.S. FDA completed a routine GMP inspection at our formulations manufacturing facilities (FTO-7 and FTO-9) in Duvvada, Visakhapatnam. We were issued a Form 483 with two observations. We responded to the observations on June 7, 2024. On August 11, 2024, an Establishment Inspection Report (“EIR”) was issued by the U.S. FDA indicating the closure of audit and the inspection of the facility was classified as Voluntary Action Indicated (“VAI”).

In August 2024, the China National Medical Products Administration (“NMPA”) conducted a remote inspection of our formulations manufacturing facility (FTO-3) for Atomoxetine Hydrochloride Capsules, and concluded that the production quality management of Atomoxetine Hydrochloride Capsules does not meet the requirements of China's "Good Manufacturing Practice for Drugs (Revised in 2010)". The NMPA has suspended the import, sale, and use of our Atomoxetine Hydrochloride Capsules effective August 30, 2024. Further, the National Drug Joint Procurement Office, China (“NDJPO”), having considered the said order of the NMPA, has decided to cancel Atomoxetine Hydrochloride Capsules “won” status and list our company on the "Violation List", suspending our eligibility to participate in national centralized drug procurement activities from August 30, 2024 to February 28, 2026. We have already submitted the Corrective and Preventive Action plan to the NMPA and undertaken corrective action.

Pharmaceutical Services and Active Ingredients (“PSAI”) segment

Our PSAI segment primarily includes our business of manufacturing and marketing active pharmaceutical ingredients (“APIs”) including intermediates, as well as our pharmaceutical services business.

Active Pharmaceutical Ingredients

Our more than 150 different APIs have regulatory approvals filed in numerous markets and enable our generic manufacturing partners to bring formulated products in forms such as tablets, capsules, or injectable to patients worldwide. Thanks to our backward integration, we can also provide customers with intermediates, which are the pre-stage of a final API. In addition to our external partners, our API business also supplies our own generic business.

Our PSAI segment’s revenues for the year ended March 31, 2025 were Rs.33,846 million, as compared to Rs.29,801 million for the year ended March 31, 2024. Our PSAI segment accounted for 10% of our total revenues for the year ended March 31, 2025.

During, the year ended March 31, 2025, we filed 111 Drug Master Files (“DMFs”) worldwide, of which 14 were filed in the United States, 8 were filed in Canada, 8 were filed in Europe and 81 were filed in other countries. Cumulatively, our total active DMFs filed worldwide as of March 31, 2025 were 1,629, including 264 active DMFs filed in the United States.

We export APIs to more than 70 countries, and our main markets include North America (the United States and Canada), Europe and Southeast Asia, Middle East and Africa. The research and development group within our API business contributes to our business by creating intellectual properties, principally by developing novel and non-infringing manufacturing processes and polymorphs. Besides the development of new products, the research also focuses on further optimizing our manufacturing processes, which allows us to produce our APIs at a competitive price.

Pharmaceutical Services business – Aurigene Pharmaceutical Services Limited

Our PSAI segment also includes our Pharmaceutical Services business, which provides contract discovery (research), development, and manufacturing to global pharmaceutical companies. As a contract development and manufacturing organization (“CDMO”), the business is operated independently under its own entity Aurigene Pharmaceutical Services Limited and works on new chemical entities (“NCEs”) and new biological entities (“NBEs”) for global pharmaceutical companies and biotechnology companies. The pharmaceutical services (contract research, development and manufacturing) arm of our PSAI segment was established in 2001 to leverage our strength in research and development to serve the niche segment of the innovator pharmaceutical and biotechnology companies. Our objective is to be the preferred partner for innovator pharmaceutical companies, providing a complete range of services that are necessary to support their innovations to bring a new drug to the market quickly and efficiently.

The focus is to leverage our skills in discovery, CDMO (process and analytical development for drug substance and formulation), and large scale commercial manufacturing to serve outsourcing needs of global pharmaceutical and biotechnology companies. We have positioned our PSAI segment’s Pharmaceutical Services business to be the partner of choice for large, medium and emerging innovator companies across the globe, with service offerings spanning the entire value chain of pharmaceutical services.

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Effective June 1, 2020, we carved out our discovery service business from Aurigene Oncology Limited (“AOL”) (formerly Aurigene Discovery Technologies Limited) and our contract development and manufacturing services business from Dr. Reddy’s Limited and the integrated business model was commenced under Aurigene Pharmaceutical Services Limited (“APSL”). APSL is a subsidiary of AOL within our group. APSL was formed to service the needs of innovator customers in the areas of discovery, development and manufacturing services for clinical and commercial needs. Our aspiration is to make APSL a global leader in offering end-to-end integrated solutions across discovery, development and manufacturing.

Sales, Marketing and Distribution

We support our local customers through our commercial offices in various markets, including Brazil, China, Europe, India, Japan, Mexico, the United States, United Arab Emirates and Russia with colleagues from regulatory affairs and commercial.

Developed Markets: Our PSAI segment’s principal overseas markets are the United States and Europe, which contributed Rs.16,039 million and accounted for 48% of our PSAI segment’s revenue for the year ended March 31, 2025.

In the United States and Europe, in recent years expirations of the patent protection for high value branded pharmaceutical products were much less frequent, which resulted in a decrease in new opportunities in these markets for the customers of our PSAI segment. We market our products through our subsidiaries in the United States and Europe. These subsidiaries are engaged in all aspects of marketing activity and support our customers’ pursuit of regulatory approval for their products, focusing on building long-term partnerships through customer service excellence.

India: India is an important market for our PSAI segment, with total sales of Rs.2,096 million, and it accounted for 7% of the PSAI segment’s revenues in the year ended March 31, 2025. The market in India is highly competitive, with severe pricing pressure and competition from lower cost foreign imports.

Other Key Markets: Our PSAI segment’s sales to all of the other markets (excluding the United States, Europe and India) was Rs.15,711 million for the year ended March 31, 2025 and accounted for 46% of our PSAI segment’s revenues for the year.

China is an important and attractive market to operate in. Our commitment to the Chinese market shows through a strong pipeline of products for the Chinese market and our local presence of business development and regulatory affairs experts. Further key markets include Brazil, Mexico Korea and Japan. While we work through our agents in some of these markets our local marketing and regulatory affairs associates are an important interface to understand and serve customers in those regions.

For our contract development and manufacturing services line of business, we have focused business development teams dedicated to our key geographies of North America (the United States and Canada), the European Union and Asia Pacific. These teams target large, medium and emerging innovator companies to build long-term business relationships focused on catering to their outsourcing needs from discovery to commercialization.

Going forward, we expect our PSAI segment to show growth on account of our investments in technologies and platforms such as peptides. We are also pursuing a partnership model to enable our customers to reach more markets faster and efficiently by leveraging our cost leadership and presence across the globe. Our PSAI Segment has been investing in digital solutions to revitalize our engagement and transparency with our customers. We laid an important foundation with these initiatives, which we continue to build on.

We are committed to enhancing the accessibility and affordability of medicines for vulnerable populations, promoting greater equity in healthcare. Our mission aligns with the World Health Organization Sustainable Development Goals of 2030, as we strive to create a sustainable future for all. To achieve this, we have identified crucial areas of focus and continue to establish partnerships with multilateral agencies and pharmaceutical organizations. Together, we aim to develop an enduring pipeline of ground-breaking medicines that are affordable to people worldwide.

PSAI Manufacturing

The infrastructure for our PSAI segment consists of eight U.S. FDA-inspected plants (six in India, including one in a Special Economic Zone, one in Mexico, and one in Mirfield, United Kingdom) and two technology development centers (one in Hyderabad, India and one in Cambridge, United Kingdom).

India: All of our facilities in India are located in the states of Andhra Pradesh and Telangana. We have the flexibility to produce quantities that range from a few kilograms to several metric tons. The manufacturing process consumes a wide variety of raw materials that we obtain from various sources that comply with the requirements of regulatory authorities in the markets to which we supply our products. We procure raw materials on the basis of our requirement planning cycles. We utilize a broad base of suppliers in order to minimize risk arising from dependence on a single supplier.

Mexico: Our manufacturing plant in Cuernavaca, Mexico (the “Mexico facility”) was acquired from Roche during the year ended March 31, 2006. In addition to active pharmaceutical ingredients, naproxen and naproxen sodium and a range of intermediates, the Mexico facility manufactures steroids as active ingredients for use in human and veterinary pharmaceutical products.

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United Kingdom: The small molecules business continues to supply complex APIs to customers at a range of scales. This business is also able to provide cost effective contract development and manufacturing organization solutions to innovators developing new pharmaceutical products, tapping into the expertise of our parent company as required.

We have invested in this business to update equipment and implement modern data acquisition systems to meet today’s stringent regulatory requirements.

For our contract development and manufacturing services, we have well-resourced synthetic organic chemistry laboratories, medicinal chemistry analytical laboratories and kilo laboratories at our research and development centers at Hyderabad and Bengaluru in India. Our chemists and process engineers are experts in discovery, development and manufacturing services, from the pre-clinical stage to commercialization. To complete the full value chain in development services, we also provide formulation development services. We have facilities for pre-formulation and formulation development, analytical development, clinical trial supplies, pilot scale and product regulatory support. This facility also follows rigorous Safety and Information Security practices and is certified against ISO 27001:2013 standards for information security. Larger quantities of APIs can be manufactured from our API plants in India, the United Kingdom and Mexico. We also offer end to end project management support for effective deliveries.

Our contract development and manufacturing services are uniquely positioned in the market where it utilizes assets (both in terms of physical assets and technical know-how) of a vertically integrated pharmaceutical company and combines this with the service model which we have built over the years.

Raw Materials

Raw material expense forms the largest portion of our cost of revenues. Raw materials consist of fine and specialty chemicals, bulk chemicals, solvents, catalysts, and basic and advanced intermediates. The prices of these raw materials generally fluctuate in line with commodity cycles, demand supply situations, changes to government policies and geo-political conflicts. We evaluate and manage our commodity price risk exposure through periodical supply contracts as well as agile and responsive sourcing and procurement practices.

Competition

The global API market can broadly be divided into regulated and less regulated markets. The less regulated markets offer low entry barriers in terms of regulatory requirements and intellectual property rights. The regulated markets, like the United States and Europe, have high entry barriers in terms of intellectual property rights and regulatory requirements, including facility approvals. As a result, there is a premium for quality and regulatory compliance along with relatively greater stability for both volumes and prices. As an API supplier, we compete with a number of manufacturers within and outside India, which vary in size. Our main competitors in this segment are Divis Laboratories Limited, Aurobindo Pharma Limited, Cipla Limited, Mylan Laboratories Limited, Sun Pharmaceutical Industries Limited and MSN Laboratories Limited, all based or operating in India. In addition, we experience competition from European and Chinese manufacturers such as Zhejiang Huahai, Tianyu, as well as from Teva Pharmaceuticals Industries Limited, based in Israel. Our service excellence, sustainable manufacturing and robust supplies helped us to build a strong positioning in the market.

With respect to our contract development and manufacturing organization (“CDMO”) services, we believe that contract research and manufacturing is a significant opportunity for Indian pharmaceutical companies, based on their strengths of a skilled workforce and low-cost manufacturing infrastructure. Key competitors in India include Syngene International Ltd., Aragen Life Sciences, Sai Life Sciences and Piramal Pharma Ltd. Key competitors from outside India include Lonza Group, Patheon Inc., Catalent Inc., Cambrex Inc., and WuXi Apptec. We offer a wide range of services spanning the entire value chain from discovery to commercial manufacturing (drug substances and drug products). Growth in contract research and manufacturing services is likely to be driven by increased outsourcing by large and medium size pharmaceutical companies. We distinguish ourselves from Indian competitors by offering a wider range of services spanning the entire pharmaceutical value chain from early discovery to final manufacturing.

Government regulations

All pharmaceutical companies that manufacture and market drugs, medical devices and cosmetics in India are subject to various national and state laws and regulations, which principally include the Drugs and Cosmetics Act, 1940 and the Drugs and Cosmetics Rules 1945, the New Drugs and Clinical Trials. Rules, 2019, the Cosmetics Rules, 2020, the Medical Devices Rules 2017, the Drugs (Prices Control) Order, 2013, as well as various environmental laws and other government statutes and regulations. These regulations govern the manufacturing, testing, packaging, labeling, storing, recordkeeping, safety, approval, sale and distribution of pharmaceutical products.

In India, manufacturing licenses for drugs, cosmetics and medical devices are generally issued by state licensing authorities. Under the Drugs and Cosmetics Act, 1940, the state licensing authorities are empowered to issue manufacturing licenses for drugs if they are approved for marketing in India by the Drug Controller General of India (“DCGI”). Prior to granting licenses for any new drugs or combinations of new drugs, the DCGI clearance has to be obtained in accordance with the Drugs and Cosmetics Act, 1940 and the New Drugs and Clinical Trials Rules, 2019.

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We submit a DMF for active pharmaceutical ingredients to be commercialized in the United States. Any drug product for which an ANDA is being filed must have a DMF in place with respect to a particular supplier supplying the underlying API.

The manufacturing facilities are inspected by the U.S. FDA to assess compliance with cGMP. The manufacturing facilities and production procedures must meet U.S. FDA standards. For European markets, we submit a European DMF and, wherever applicable, obtain a certificate of suitability from European Directorate for the Quality of Medicines.

Others Segment

Our Others segment consists of business operations of our wholly-owned subsidiary, Aurigene Oncology Limited (“AOL”) (formerly Aurigene Discovery Technologies Limited) and our Proprietary Products business.

AOL: AOL is a clinical stage biotech company committed to developing innovative and effective cancer therapeutics. AOL has successfully discovered 21 novel chemical entities for clinical development. Some of these molecules were developed in collaboration with global pharmaceutical and biotechnology companies while others were developed independently. We have out-licensed several first-in-class and best-in-class assets to pharmaceutical and biotechnology companies for global clinical development, while undertaking clinical proof of concept studies for a few programs on our own. Over the years, AOL has developed multiple discovery platforms, including kinase inhibitors, targeted protein degraders, antibody engineering and cell and gene therapy, resulting in a pipeline of first-in-class and best-in-class assets.

Proprietary Products: Our Proprietary Products business, over the years, focused on the development of differentiated pharmaceutical products across multiple therapeutic areas including dermatology and central nervous system. Initially the commercialization of these products was carried out through launching in the U.S. market and subsequently through product divestiture and out-licensing to various partners in the United States and Europe. The products licensed out included not only the approved and marketed products but also the ones in the development stages. We derive revenues from these products through event specific milestones and royalties.

4.C. Organizational structure

Dr. Reddy’s Laboratories Limited is the parent company in our group. Refer to Note 38 (“Organizational Structure”) of our consolidated financial statements for a list of our subsidiaries, joint ventures and associates.

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4.D. Property, plant and equipment

Our principal executive offices are located in Hyderabad, Telangana, India. Our business operates through a number of subsidiaries having offices, research facilities and production sites throughout the world. The following table sets forth current information relating to our principal facilities:

		Approximate Area		Segments Which Primarily
Sl No.	Name/Location	(Square feet)		Use
	Within India
1	API Hyderabad Plant 1, Telangana, India		729,630		Global Generics and PSAI
2	API Hyderabad Plant 2, Telangana, India		781,379		Global Generics and PSAI
3	API Hyderabad Plant 3, Telangana, India		644,805		Global Generics and PSAI
4	API Nalgonda Plant, Telangana, India		3,397,680		Global Generics and PSAI
5	API Srikakulam Plant, Andhra Pradesh, India		4,047,595		Global Generics and PSAI
6	API Srikakulam Plant (SEZ), Andhra Pradesh, India		9,917,739		Global Generics and PSAI
7	Aurigene Pharmaceutical Services Limited, Hyderabad, Telangana, India		260,547		PSAI
8	Technology Development Centre (FTDC2) Hyderabad, Telangana, India		86,261		Global Generics and PSAI
9	Integrated Product Development Center (Pilot Plant), Telangana, India		151,997		Global Generics
10	Formulations Hyderabad Plant 2, Telangana, India		3,688,396		Global Generics
11	Formulations Baddi Plant 1, Himachal Pradesh, India		728,234		Global Generics
12	Formulations Baddi Plant 2, Himachal Pradesh, India		381,342		Global Generics
13	Formulations Baddi Plant 3, Himachal Pradesh, India		377,098		Global Generics
14	Biologics Hyderabad, Telangana, India		1,026,055		Global Generics
15	Formulations Hyderabad Plant 3, Telangana, India		1,872,397		Global Generics
16	Formulations Srikakulam Plant 1 (SEZ), Andhra Pradesh, India		879,041		Global Generics
17	Formulations Srikakulam Plant 2 (SEZ), Andhra Pradesh, India		385,298		Global Generics
18	Formulations Srikakulam Plant 11, Andhra Pradesh, India		1,554,513		Global Generics
19	Formulations Visakhapatnam Plant 1 (SEZ), Andhra Pradesh, India		582,206		Global Generics
20	Formulations Visakhapatnam Plant 2 (SEZ), Andhra Pradesh, India		544,322		Global Generics
21	Aurigene Pharmaceutical Services Limited, Bengaluru, Karnataka, India		67,414		PSAI
22	Aurigene Oncology Limited, Bengaluru, Karnataka, India		630,462		Others
23	Integrated Product Development Center, Telangana, India		271,379		Global Generics, PSAI and Others
24	Aurigene Pharmaceutical Services Limited, Hyderabad, Telangana, India (CDMO)		50,480		PSAI
25	CAR-T (Biologics), Bengaluru, Karnataka, India		17,997		Global Generics
26	Dr. Reddy’s Formulations Limited -1, Srikakulam, Andhra Pradesh, India		43,560		Global Generics
27	Dr. Reddy’s Formulations Limited -2, Srikakulam, Andhra Pradesh, India		7,40,520		Global Generics

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		Approximate
		Area		Segments Which Primarily
Sl No.	Name/Location	(Square feet)		Use
	Outside India
28	API Cuernavaca Plant, Mexico		2,361,840		Global Generics and PSAI
29	API Mirfield Plant, United Kingdom		1,785,960		Global Generics and PSAI
30	API Middleburgh Plant, New York, United States		292,000		Global Generics
31	Technology Development Centre, Cambridge, United Kingdom		32,966		Global Generics and PSAI
32	Aurigene Discovery Technologies, Malaysia		5,672		Others

During the year ended March 31, 2025, we divested our Formulations Shreveport Plant at Louisiana, United States, which was part of our Global Generics Segment. Refer to Note 23 (“Other income, net”) of our consolidated financial statements for further details.

During the year ended March 31, 2023, we sold our Technology Development Centre in Leiden, the Netherlands, which served our Global Generics and our PSAI segment.

We generally own our facilities. However, some of our sites (primarily office space) are leased. All properties identified above, including leased properties, are either used for manufacturing and packaging of pharmaceutical products or for research and development activities. In addition to the above, we have sales, marketing and administrative offices, some of which are owned and some others are leased properties.

Material plans to construct, expand and improve facilities

During the year ended March 31, 2025, we expanded the production capacity for multiple products in our API and Formulation plants located in Srikakulam, Andhra Pradesh, India, created new infrastructure at our Biologics facility at Hyderabad and a new leased premises for Biologics at Bengaluru, Karnataka, India.

During the year ended March 31, 2024, we enhanced the capacity for multiple products in our API Srikakulam Plants located in Andhra Pradesh, India. We also incurred substantial capital expenditures to enhance the capacity of both our “Formulations Visakhapatnam Plant 2 (FTO9)” and our “Formulations Srikakulam Plant 11”, each located in Andhra Pradesh, India.

During the year ended March 31, 2023, we enhanced the capacity for multiple products in our API Srikakulam Plant (SEZ) located in Andhra Pradesh, India. We also incurred substantial capital expenditures to enhance the capacity of our Formulations injectable facility at our “Srikakulam Plant 11”, located in Andhra Pradesh, India.

As of March 31, 2025, we had capital work-in-progress of Rs.24,837 million and capital commitments of Rs.14,567 million for expansion of our manufacturing and research facilities, primarily relating to facilities located in India. Our current capital work-in-progress and capital commitments primarily consist of projects to enhance the capacity of our formulations injectable facility at Srikakulam, Andhra Pradesh, India and new infrastructure at our Biologics facility at Hyderabad, Telangana, India. We currently intend to finance our additional expansion plans entirely through our operating cash flows, cash and cash equivalents, other investments and the cash flows from borrowings as required. A majority of these projects are expected to be completed during the fiscal year ending March 31, 2026.

Environmental laws and regulations

We are subject to significant national and state environmental laws and regulations which govern the discharge, emission, storage, handling and disposal of a variety of substances that may be used in or result from our operations at the above facilities. Non-compliance with the applicable laws and regulations may subject us to penalties and may also result in the closure of our facilities. Refer to Note 18 (“Provisions”) and Note 32 (“Contingencies - Environmental matters”) of our consolidated financial statements for details as to environmental matters and liabilities.

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ITEM 4A. UNRESOLVED STAFF COMMENTS

None.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Overview

We are an integrated global pharmaceutical company committed to accelerating access to affordable and innovative medicines. We derive our revenues from the sale of finished dosage forms, active pharmaceutical ingredients and intermediates, development and manufacturing services provided to innovator pharmaceutical and biotechnology companies, and license fees from marketing authorizations for our products.

The Chief Operating Decision Maker (“CODM”) evaluates our performance and allocates resources based on an analysis of various performance indicators by operating segments. The CODM reviews revenues and gross profit as the performance indicator for all of the operating segments, and does not review the total assets and liabilities of an operating segment. Our Chief Executive Officer (“CEO”) is the CODM of our company.

Our reportable operating segments are as follows:

· Global Generics;

· Pharmaceutical Services and Active Ingredients; and

· Others.

Global Generics. This segment consists of our business of manufacturing and marketing prescription and over-the-counter finished pharmaceutical products ready for consumption by the patient, marketed under a brand name (branded formulations) or as generic finished dosages with therapeutic equivalence to branded formulations (generics). This segment includes the operations of our biologics business, and the portfolio of consumer healthcare brands in the Nicotine Replacement Therapy category (the “NRT Business”) that we recently acquired is also included in this segment.

Pharmaceutical Services and Active Ingredients. This segment primarily consists of our business of manufacturing and marketing active pharmaceutical ingredients and intermediates, also known as “API”, which are the principal ingredients for finished pharmaceutical products. Active pharmaceutical ingredients and intermediates become finished pharmaceutical products when the dosages are fixed in a form ready for human consumption such as a tablet, capsule or liquid using additional inactive ingredients. We also serve our customers with incremental value added products including semi-finished and finished formulations, which are included in this segment. This segment also includes our pharmaceutical services business, which provides contract research services and manufactures and sells active pharmaceutical ingredients in accordance with the specific customer requirements.

Others. This segment consists of our other business operations which includes our wholly-owned subsidiaries, Aurigene Oncology Limited (“AOL”) (formerly Aurigene Discovery Technologies Limited) and our Proprietary Products business. AOL is a specialized biotechnology company engaged in discovery and early clinical development of novel, best-in-class therapies in the fields of oncology and inflammation. AOL works with established pharmaceutical and biotechnology companies through customized models of drug-discovery collaborations. Our Proprietary Products business is focused on the research, development and commercialization of differentiated formulations and we derive revenues from such assets through event specific milestones and subsequent royalties, if any.

The measurement of each segment’s revenues, expenses and assets is consistent with the accounting policies that are used in preparation of our consolidated financial statements.

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Critical Accounting Policies

Critical accounting policies are defined as those that in our view are the most important to the portrayal of our financial condition and results and that require the most exercise of management’s judgment. We consider the policies discussed under the following paragraphs to be critical for an understanding of our financial statements. The basis for preparation of our financial statements, accounting policies and application of these are discussed in detail in Notes 2, 3 and 4 to our consolidated financial statements.

Accounting estimates and judgments

While preparing financial statements in conformity with IFRS, we make certain estimates and assumptions that require difficult, subjective and complex judgments. These judgments affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses, the accompanying disclosures, and the disclosure of contingent liabilities at the statement of financial position date and the reported amount of income and expenses for the reporting period. Financial reporting results rely on our estimate of the effect of certain matters that are inherently uncertain.

Future events rarely develop exactly as forecast and the best estimates require adjustments, as actual results may differ from these estimates under different assumptions or conditions. We continually evaluate these estimates and assumptions based on the most recently available information. 

Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Refer to Note 2(d) (“Use of judgements, estimates and assumptions”) in our consolidated financial statements for information about significant areas of estimation uncertainty and critical judgments.

Accounting policy relating to Revenue from contracts with customers

Our revenue is derived from sales of goods, service income and income from licensing arrangements. Most of such revenue is generated from the sale of goods. We have generally concluded that we are the principal in our revenue arrangements.

Accounting policies relating to revenues are as follows:

Sale of goods

Revenue is recognized when the control of the goods has been transferred to a third party. This is usually when the title passes to the customer, either upon shipment or upon receipt of goods by the customer, as per the terms agreed upon with the customer. At that point, the customer has full discretion over the channel and price to sell the products, and there are no unfulfilled obligations that could affect the customer’s acceptance of the product. 

Revenue from the sale of goods is measured at the transaction price which is the consideration received or receivable, net of expected returns, taxes and applicable trade discounts and allowances. Revenue includes shipping and handling costs billed to the customer, since we act as a principal in rendering those services.

In arriving at the transaction price, we consider the terms of the contract with the customers and our customary business practices. The transaction price is the amount of consideration we are entitled to receive in exchange for transferring promised goods or services, excluding amounts collected on behalf of third parties. The amount of consideration varies because of estimated rebates, returns and chargebacks, which are considered to be key estimates. Any amount of variable consideration is recognized as revenue only to the extent that it is highly probable that a significant reversal will not occur. We estimate the amount of variable consideration using the expected value method.

Presented below are the points of recognition of revenue with respect to our sales of goods:

Particulars	Point of recognition of revenue
Sales of generic products in India	Control is transferred upon delivery of products to distributors by clearing and forwarding agents.
Sales of active pharmaceutical ingredients and intermediates in India	Upon delivery of  products to customers, unless the terms of the applicable contract provide for specific revenue generating activities to be completed, in which case revenue is recognized once all such activities are completed.
Export sales and other sales outside of India	Upon delivery or dispatch of products to customers, subject to the terms of the applicable contract.

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Profit share revenues

From time to time, we enter into marketing arrangements with certain business partners for the sale of our products in certain markets. Under such arrangements, we sell our products to the business partners at a non-refundable base purchase price agreed upon in the arrangement and are also entitled to a profit share which is over and above the base purchase price. The profit share is typically dependent on the business partner’s ultimate net sale proceeds or net profits, subject to any reductions or adjustments that are required by the terms of the arrangement. Such arrangements typically require the business partner to provide confirmation of units sold and net sales or net profit computations for the products covered under the arrangement.

Revenue in an amount equal to the base sale price is recognized in these transactions upon delivery of products to the business partners. An additional amount representing the profit share component is recognized as revenue only to the extent that it is highly probable that a significant reversal will not occur.

At the end of each reporting period, we update the estimated transaction price (including updating our assessment of whether an estimate of variable consideration is constrained) to represent faithfully the circumstances present at the end of the reporting period and the changes in circumstances during the reporting period.

Out licensing arrangements, milestone payments and royalties

Our revenues include amounts derived from product out-licensing agreements. These arrangements typically consist of an initial up-front payment received on inception of the license and subsequent payments dependent on achieving certain milestones in accordance with the terms prescribed in the agreement. In cases where the transaction has two or more performance obligations, we account for the completed obligation (for example the transfer of title) as a separate unit of accounting and record revenue upon delivery of that component, provided that we can make a reasonable estimate of the fair value of the undelivered component. Otherwise, non-refundable up-front license fees received in connection with product out-licensing agreements are deferred and recognized over the balance period in which we have pending performance obligations. Milestone payments which are contingent on achieving certain clinical milestones are recognized as revenues on achievement of such milestones, or over the performance period depending on the terms of the contract. If milestone payments are creditable against future royalty payments, the milestones are deferred and released over the period in which the royalties are anticipated to be paid.

Royalty income earned through a license is recognized when the underlying sales have occurred.

Provision for chargeback, rebates, sales returns and discounts

In our North America Generics business, our gross revenues are significantly reduced by chargebacks, rebates, sales returns, discounts, shelf stock adjustments, Medicaid payments and similar “gross-to-net” adjustments. Each of such adjustments are discussed in detail below.

· Chargebacks: Chargebacks are issued to wholesalers for the difference between our invoice price to the wholesaler and the contract price through which the product is resold in the retail part of the supply chain. The information that we consider for establishing a chargeback accrual includes the historical average chargeback rate over a period of time, current contract prices with wholesalers and other customers, and estimated inventory holding by the wholesaler. With this methodology, we believe that the results are more realistic and closest to the potential chargeback claims that may be received in the future period relating to inventory on which a claim is yet to be received as at the end of the reporting period. In addition, as part of our book closure process, a chargeback validation is performed in which we track and reconcile the volume of inventory for which we should carry an appropriate provision for chargeback. We procure the inventory holding statements and data from our wholesalers (representing approximately 96% of the total value of chargebacks outstanding at every year end reporting date) as part of this reconciliation. On the basis of this volume reconciliation, chargeback accrual is validated. For the chargeback rate computation, we consider different contract prices for each product across our customer base. This chargeback rate is adjusted (if necessary) on a periodic basis for expected future price reductions.

· Shelf Stock Adjustments: Shelf stock adjustments are credits issued to customers to reflect decreases in the selling price of products sold by us, and accruals for shelf stock adjustments depend on future events upon material right obtained by customer when the prices of certain products decline as a result of price competition, new competitive launches or otherwise. These credits are customary in the pharmaceutical industry, and are intended to reduce the customer inventory cost to better reflect the current market prices. The determination to grant a shelf stock adjustment to a customer is based on the terms of the applicable contract, which may or may not specifically limit the age of the stock on which a credit would be offered.

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· Rebates: Rebates (direct and indirect) are generally provided to customers as an incentive to stock and sell our products. Rebate amounts are based on a customer’s purchases made during an applicable period. Rebates are deductions based on contractual obligations, and include direct rebates, indirect rebates and other pricing adjustments paid to wholesalers, chain drug stores, health maintenance organizations or pharmacy buying groups under a contract with us. We determine our estimates of rebate accruals primarily based on the contracts entered into with our wholesalers and other direct customers and the information received from them for secondary sales made by them. For direct rebates, liability is accrued whenever we invoice to direct customers. For indirect rebates, the accruals are based on a representative weighted average percentage of the contracted rebate amount applied to inventory sold and delivered by us to wholesalers or other direct customers.

· Refund Liability: We account for sales returns accrual by recording refund liability concurrent with the recognition of revenue at the time of a product sale. This liability is based on our estimate of expected sales returns. We deal in various products and operate in various markets. Accordingly, our estimate of sales returns is determined primarily by our historical experience in the applicable market in which we operate.

With respect to established products, we determine an estimate of sales returns provision primarily based on historical experience of the actual sales returns. Additionally, other factors that we consider in determining the estimate include levels of inventory in the distribution channel, estimated shelf life, any revision in the shelf life of the product, product discontinuances, price changes of competitive products, and introduction of competitive new products, to the extent each of these factors impact our business and markets. We consider all of these factors and adjust the sales return provision to reflect our actual experience. With respect to new products introduced by us, those have historically been either extensions of an existing product line where we have historical experience or in a general therapeutic category where established products exist and are sold either by us or our competitors. We have not yet introduced products in a new therapeutic category where the sales returns experience of such products by us or our competitors (as we understand based on industry publications) is not known. The amount of sales returns for our newly launched products has not historically differed significantly from the sales returns experience of the then current products marketed by us or our competitors (as we understand based on industry publications). Accordingly, we do not expect sales returns for new products to be significantly different from expected sales returns of current products. We evaluate sales returns of all our products at the end of each reporting period and record necessary re-measurements to the refund liability and related asset, if any.

· Medicaid: We estimate the portion of our sales that may get dispensed to customers covered under Medicaid programs based on the proportion of units sold in the previous two quarters for which a Medicaid claim could be received as compared to the total number of units sold in the previous two quarters. The proportion is based on an analysis of the actual Medicaid claims received for the preceding four quarters. In addition, we also apply the same percentage on the derived estimated inventory sold and delivered by us to our wholesalers and other direct customers to arrive at the potential volume of products on which a Medicaid claim could be received. We use this approach because we believe that it corresponds to the approximate six-month time period it takes for us to receive claims from the various Medicaid programs. After estimating the number of units on which a Medicaid claim is to be paid, we use the latest available Medicaid reimbursement rate per unit to calculate the Medicaid accrual. In the case of new products, accruals are done based on specific inputs from our marketing team or data from the publications of IQVIA.

· Cash Discounts: We offer cash discounts to our customers, on a selective basis and in line with industry practice, to encourage prompt payment. Accruals for such cash discounts do not involve any significant variables. These are accrued for at the time of invoicing and adjusted subsequently to reflect the actual experience.

We believe our estimation processes are reasonable methods of determining accruals for the “gross-to-net” adjustments. Chargeback accrual accounts for the highest element among the “gross-to-net” adjustments, and constituted approximately 86% of such “gross-to-net” adjustments for our North America Generics business for the year ended March 31, 2025. For the purpose of the following discussion, we are therefore restricting our explanations to this specific element. While chargeback accruals depend on multiple variables, the most pertinent variables are our estimates of inventories on which a chargeback claim is yet to be received and the unit price at which the chargeback will be processed. To determine the chargeback accrual applicable for a reporting period, we perform the following procedures to calculate these two variables:

a) Estimated inventory—Inventory volumes on which a chargeback claim that is expected to be received in the future are determined using the validation process and methodology described above (see “Chargebacks” above). When such a validation process is performed, we note that the difference represents an immaterial variation. Therefore, we believe that our estimation process regarding this variable is reasonable.

b) Unit pricing rate—At any point in time, inventory volumes on which we carry our chargeback accrual represents approximately 1.0 to 1.4 month of sales volumes. Therefore, the sensitivity of price changes on our chargeback accrual only relates to such volumes. Assuming that the chargebacks were processed within such period, we analyzed the impact of changes of prices for the periods beginning April 1, 2024, 2023 and 2022, respectively, and ended March 31, 2025, 2024 and 2023, respectively, on our estimated inventory levels computed based on the methodology described above (see “Chargebacks” above). The impact on net sales on account of such price variation may not be significant.

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A roll-forward for each major accrual for our North America Generics business is presented below for our fiscal years ended March 31, 2023, 2024 and 2025:

Particulars	Chargebacks			Rebates			Medicaid			Refund Liability(3)
	(All amounts in U.S.$ million)
Beginning Balance: April 1, 2022		263			94			13			24
Current provisions relating to sales during the year		2,121			209			22			32
Provisions and adjustments relating to sales in prior years		*			-			-			-
Credits and payments**		(2,137	)		(216	)		(22	)		(21	)
Ending Balance: March 31, 2023		247			87			13			35
Beginning Balance: April 1, 2023		247			87			13			35
Current provisions relating to sales during the year (1)		2,844			322			31			21
Provisions and adjustments relating to sales in prior years		*			-			-			-
Credits and payments**		(2,803	)		(307	)		(25	)		(21	)
Ending Balance: March 31, 2024		288			102			19			35
Beginning Balance: April 1, 2024		288			102			19			35
Current provisions relating to sales during the year (2)		2,720			253			23			34
Provisions and adjustments relating to sales in prior years		*			*			*			*
Credits and payments**		(2,665	)		(252	)		(29	)		(27	)
Ending Balance: March 31, 2025		343			103			13			42

* Currently, we do not separately track provisions and adjustments, in each case to the extent relating to prior years for chargebacks. However, the adjustments are expected to be non-material. The volumes used to calculate the closing balance of chargebacks represent approximately 1.0 to 1.4 months equivalent of sales, which corresponds to the pending chargeback claims yet to be processed.

** Currently, we do not separately track the credits and payments, in each case to the extent relating to prior years for chargebacks, rebates, Medicaid payments or refund liability.

(1) Chargebacks provisions and payments for the year ended March 31, 2024 were each higher as compared to the year ended March 31, 2023, primarily as a result of our acquisition of a U.S. generic prescription products portfolio from Mayne Pharma Group Limited in April 2023, higher sales volumes and also due to higher pricing rates per unit for chargebacks. Such higher pricing rates were on account of reductions in the contract prices through which the product is resold in the retail part of the supply chain for certain of our products.

The rebate provisions and payments for the year ended March 31, 2024 were each higher as compared to the year ended March 31, 2023, primarily as a result of the aforesaid generic portfolio acquisition from Mayne Pharma Group Limited, as well as higher sales volumes for our base portfolio products.

(2) Chargebacks provisions and payments for the year ended March 31, 2025 were each lower as compared to the year ended March 31, 2024, primarily as a result of reduction in the invoice price to wholesalers for few of our major products. This was offset to some extent due to higher pricing rates per unit on chargebacks , on account of reductions in the contract prices through which the product is resold in the retail part of the supply chain for certain of our products.

(3) Our overall provision for refund liability as of March 31, 2025 relating to our North America Generics business was U.S.$ 42, compared to a liability of U.S.$35 as of March 31, 2024. The refund liability created for new product launches and volume growth, were off-set by the reductions in the contract prices and by product mix changes.

The estimates of “gross-to-net” adjustments for our operations in India and other countries outside of the United States relate mainly to refund liability in all such operations, and certain rebates to healthcare insurance providers are specific to our German operations. The pattern of such refund liability is generally consistent with our gross sales. In Germany, the rebates to healthcare insurance providers mentioned above are contractually fixed in nature and do not involve significant estimations by us.

Services

Revenue from services rendered, which primarily relate to contract research, is recognized in the consolidated income statement as the underlying services are performed. Upfront non-refundable payments received under these arrangements are deferred and recognized as revenue over the expected period over which the related services are expected to be performed.

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License fees

License fees primarily consist of income from the out-licensing of intellectual property, and other licensing and supply arrangements with various parties. Revenue from license fees is recognized when control transfers to the third party and our performance obligations are satisfied. Some of these arrangements include certain performance obligations by us. Revenue from such arrangements is recognized in the period in which we complete all of our performance obligations.

For other details on our material accounting policies, please refer to Note 3 of our consolidated financial statements.

5.A. Operating results

Income Statement Data

	For the year ended March 31,
	2025			2025			2024			2023
	(Rs. in millions, U.S.$ in millions)
	Convenience translation into U.S.$
Revenues	U.S.$	3,811		Rs.	325,535		Rs.	279,164		Rs.	245,879
Cost of revenues		1,581			135,107			115,557			106,536
Gross profit		2,230			190,428			163,607			139,343
Selling, general and administrative expenses		1,099			93,870			77,201			68,026
Research and development expenses		320			27,380			22,873			19,381
Impairment of non-current assets, net		20			1,693			3			699
Other income, net		(51	)		(4,358	)		(4,199	)		(5,907	)
Results from operating activities		842			71,843			67,729			57,144
Finance income, net		55			4,724			3,994			2,853
Share of profit of equity accounted investees, net of tax		3			217			147			370
Profit before tax		900			76,784			71,870			60,367
Tax expense, net		229			19,539			16,186			15,300
Profit for the year	U.S.$	671		Rs.	57,245		Rs.	55,684		Rs.	45,067
Attributable to:
Equity holders of the parent company	U.S.$	663		Rs.	56,544		Rs.	55,684		Rs.	45,067
Non-controlling interests		8			701			-			-

The following table sets forth, for the periods indicated, financial data as percentages of total revenues and the increase (or decrease) by item as a percentage of the amount over the comparable period in the previous years.

	Percentage of Sales									Percentage
	For the year ended March 31,									Increase/(Decrease)
	2025			2024			2023			2024 to 2025			2023 to 2024
Revenues		100.0	%		100.0	%		100.0	%		16.6	%		13.5	%
Gross profit		58.5	%		58.6	%		56.7	%		16.4	%		17.4	%
Selling, general and administrative expenses		28.8	%		27.7	%		27.7	%		21.6	%		13.5	%
Research and development expenses		8.4	%		8.2	%		7.9	%		19.7	%		18.0	%
Impairment of non-current assets		0.6	%		0.0	%		0.3	%		56,333.3	%		(99.6	)%
Other expense/(income), net		(1.3	)%		(1.5	)%		(2.4	)%		3.8	%		(28.9	)%
Results from operating activities		22.0	%		24.3	%		23.2	%		6.1	%		18.5	%
Finance income, net		1.5	%		1.4	%		1.2	%		18.3	%		40.0	%
Share of profit of equity accounted investees, net of tax		0.1	%		0.1	%		0.2	%		47.6	%		(60.3	)%
Profit before tax		23.6	%		25.7	%		24.6	%		6.8	%		19.1	%
Tax expense, net		6.0	%		5.8	%		6.2	%		20.7	%		5.8	%
Profit for the year		17.6	%		19.9	%		18.3	%		2.8	%		23.6	%
Attributable to:
Equity holders of the parent company		17.4	%		19.9	%		18.3	%		1.5	%		23.6	%
Non-controlling interests		0.2	%		-			-			-			-

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The following table sets forth, for the periods indicated, our consolidated revenues by segment:

	For the year ended March 31,
	2025					2024					2023
	(Rs. in millions)
	Revenues		% of Segment revenue			Revenues		% of Segment revenue			Revenues		% of Segment revenue
Global Generics	Rs.	289,552		89	%	Rs.	245,453		88	%	Rs.	213,768		87	%
PSAI		33,846		10	%		29,801		11	%		29,069		12	%
Others		2,137		1	%		3,910		1	%		3,042		1	%
Total	Rs.	325,535		100	%	Rs.	279,164		100	%	Rs.	245,879		100	%

Fiscal Year Ended March 31, 2025 compared to Fiscal Year Ended March 31, 2024

Revenues

Our overall consolidated revenues were Rs.325,535 million for the year ended March 31, 2025, an increase of 17%, as compared to Rs.279,164 million for the year ended March 31, 2024. This revenue growth for the year ended March 31, 2025 was largely driven by a net increase in the sales volumes of certain of our existing products, and revenue contributions from acquisitions and new product launches made during the year ended March 31, 2025. This was partially offset by price erosion in our Global Generics segment markets of North America and Europe.

The following table sets forth, for the periods indicated, our consolidated revenues by geography:

	For the year ended March 31,
	2025					2024					2023
	Revenues		% of Total Revenue*			Revenues		% of Total Revenue*			Revenues		% of Total Revenue*
	(Rs. in millions)
Global Generics	Rs.	289,552		89	%	Rs.	245,453		88	%	Rs.	213,768		87	%
North America (the United States and Canada)		145,164		50	%		129,895		53	%		101,704		48	%
Europe		35,882^		12	%		20,511		8	%		17,603		8	%
India		53,734		19	%		46,407		19	%		48,932		23	%
Russia		25,958		9	%		22,301		9	%		21,228		10	%
Other countries of the former Soviet Union and Romania		8,920		3	%		8,626		4	%		8,592		4	%
Rest of the World		19,894		7	%		17,713		7	%		15,709		7	%
PSAI		33,846		10	%		29,801		11	%		29,069		12	%
Others		2,137		1	%		3,910		1	%		3,042		1	%
Total	Rs.	325,535		100	%	Rs.	279,164		100	%	Rs.	245,879		100	%

* Percentages mentioned against the segments are with reference to the total revenue of our company; and percentages mentioned against geographies represent the sales in the respective geography as a percentage of the total revenue from that segment.

^ Includes revenues of Rs.12,020 million from the recently acquired Nicotine Replacement Therapy Business.

For the year ended March 31, 2025, the average exchange rate of the U.S. dollar appreciated by 2.2%, that of the Euro appreciated by 1.1%, and that of the Russian rouble depreciated by 1.9%, against the Indian rupee compared to the year ended March 31, 2024. These changes in exchange rates on an overall basis increased our reported revenues.

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Segment analysis

Global Generics

Revenues from our Global Generics segment were Rs.289,552 million for the year ended March 31, 2025, an increase of 18% compared to Rs.245,453 million for the year ended March 31, 2024. The revenue increase was in all four business geographies of this segment: North America (the United States and Canada), Europe, “Emerging Markets” (which is comprised of Russia, other countries of the former Soviet Union, Romania and certain other countries from our “Rest of the World” markets, including Brazil, South Africa, China and Australia) and India.

The foregoing increase in revenues of this segment was attributable to the following factors:

· an increase of approximately 14% resulting from a net increase in the sales volumes of certain of our existing products in this segment;

· an increase of approximately 7% resulting from acquisitions during the year ended March 31, 2025;

· an increase of approximately 4% resulting from new products launched during the year ended March 31, 2025; and

the foregoing was partially offset by:

· a decrease of approximately 7% resulting from the net impact of changes in sales prices of certain of our existing products in this segment.

North America (the United States and Canada): Our Global Generics segment’s revenues from North America were Rs.145,164 million for the year ended March 31, 2025, an increase of 12% compared to Rs.129,895 million for the year ended March 31, 2024. In U.S. dollar absolute currency terms (i.e., U.S. dollars without taking into account the effect of currency exchange rates), such revenues increased by 10% for the year ended March 31, 2025, compared to the year ended March 31, 2024.

This revenue increase was largely attributable to a net increase in the sales volumes of certain of our existing products, partially offset by price erosion from increased competition for certain of our existing products.

During the year ended March 31, 2025, we launched 18 new products in North America and made 10 new ANDA filings with the U.S. FDA. As of March 31, 2025, our cumulative ANDA filings were 329. As of March 31, 2025, we had 76 filings pending approval with the U.S. FDA (73 ANDAs and three NDAs under the 505(b)(2) route), including 19 tentative approvals. Of the 76 filings which are pending approval, 46 are Paragraph IV filings, and we believe that we are the first to file with respect to 20 of these filings.

Europe: Our Global Generics segment’s revenues from Europe are primarily derived from Germany, the United Kingdom, Italy, Spain and France as well as the global portfolio outside of the United States of consumer brands in the Nicotine Replacement Therapy category which we acquired from Haleon UK Enterprises Limited (the “Acquired NRT Business”). Such revenues from Europe were Rs.35,882 million for the year ended March 31, 2025, an increase of 75% compared to Rs.20,511 million for the year ended March 31, 2024. After taking into account the impact of exchange rate fluctuations of the Indian rupee against the currencies in the markets in which we operate, the foregoing increase was primarily on account of the revenues from the Acquired NRT Business of Rs.12,020 million for the year ended March 31, 2025, a net increase in sales volumes of certain of our existing products and revenues from new products launched during the year ended March 31, 2025, all of which were partially offset by price erosion in certain of our existing products.

During the year ended March 31, 2025, we launched 39 new products in Europe (excluding the Acquired NRT Business).

India: Our Global Generics segment’s revenues from India were Rs.53,734 million for the year ended March 31, 2025, an increase of 16% compared to Rs.46,407 million for the year ended March 31, 2024. This increase in revenues was largely attributable to revenues from distribution of the vaccines portfolio in-licensed from Sanofi Healthcare India Private Limited (“Sanofi India”), integration of the products under Dr. Reddy’s and Nestlé Health Science Limited (the “Nutraceuticals subsidiary”), revenues from new products launched during the year ended March 31, 2025 and a net increase in the sales prices of certain of our existing products, all of which were partially offset by a net decrease in sales volumes of certain of our existing products.

According to IQVIA in its Moving Annual Total report for the year ended March 31, 2025, our secondary sales in India grew by 8.4% during such period, compared to the India pharmaceutical market’s growth of 8.0% during the same period.

During the year ended March 31, 2025, we launched 23 new brands in India, apart from the vaccines portfolio in-licensed from Sanofi India and products under our aforementioned Nutraceuticals subsidiary.

Emerging Markets: Our Global Generics segment’s revenues from “Emerging Markets” (which is comprised of Russia, other countries of the former Soviet Union, Romania and certain other countries from our “Rest of the World” markets, including Brazil, South Africa, China and Australia) were Rs.54,772 million for the year ended March 31, 2025, an increase of 13% compared to compared to Rs.48,640 million for the year ended March 31, 2024. During the year ended March 31, 2025, we launched 85 new products across geographies in Emerging Markets. 

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Russia: Our Global Generics segment’s revenues from Russia were Rs.25,958 million for the year ended March 31, 2025, an increase of 16% compared to Rs.22,301 million for the year ended March 31, 2024. In Russian rouble absolute currency terms (i.e., Russian roubles without taking into account the effect of currency exchange rates), such revenues increased by 24% for the year ended March 31, 2025, compared to the year ended March 31, 2024. This revenue increase in absolute currency terms was largely attributable to a net increase in sales volumes and prices of certain of our existing products and to revenues from new products launched during the year ended March 31, 2025. Our over-the-counter (“OTC”) division’s revenues from Russia for the year ended March 31, 2025 were approximately 50% of our total revenues from Russia in this segment.

According to IQVIA, as per its report for the year ended March 31, 2025, our sales value (in Russian roubles) growth and volume growth from Russia for such period, as compared to the Russian pharmaceutical market was as follows:

	Year ended March 31, 2025
	Increase /(Decrease)
	Dr. Reddy's						Russian pharmaceutical market
	Sales value			Volume			Sales value			Volume
Prescription (Rx)		9.2	%		(1.2	)%		17.8	%		0.4	%
Over-the-counter (OTC)		10.9	%		0.6	%		10.7	%		(4.4	)%
Total (Rx + OTC)		10.0	%		(0.5	)%		14.3	%		(2.7	)%

As per the above referenced IQVIA report, our market shares in Russia for the years ended March 31, 2025 and March 31, 2024 were as follows:

	Year ended March 31,
	Volume based						Value based
	2025			2024			2025			2024
Prescription (Rx)		3.8	%		3.7	%		1.9	%		1.6	%
Over-the-counter (OTC)		1.6	%		1.5	%		1.8	%		1.8	%
Total (Rx + OTC)		2.4	%		2.3	%		1.8	%		1.7	%

Other countries of the former Soviet Union and Romania: Our Global Generics segment’s revenues from other countries of the former Soviet Union and Romania were Rs.8,920 million for the year ended March 31, 2025, an increase of 3% compared to Rs.8,626 million for the year ended March 31, 2024. After taking into account the impact of exchange rate fluctuations of the Indian rupee against the currencies in the markets in which we operate, the foregoing increase was on account of a net increase in the sales prices of certain of our existing products and revenues from new products launched during the year ended March 31, 2025, both of which were partially offset by a net decrease in sales volumes of certain of our existing products.

“Rest of the World” Markets: We refer to all markets of this segment, other than North America, Europe, Russia and other countries of the former Soviet Union, Romania and India, as our “Rest of the World” markets. Our Global Generics segment’s revenues from our “Rest of the World” markets were Rs.19,894 million for the year ended March 31, 2025, an increase of 12% compared to Rs.17,713 million for the year ended March 31, 2024. The increase is largely attributable to a net increase in the sales volumes of certain of our existing products and revenues from new products launched during the year ended March 31, 2025, both of which were partially offset by a net decrease in the sales prices of certain of our existing products.

Pharmaceutical Services and Active Ingredients (“PSAI”)

Our PSAI segment’s revenues were Rs.33,846 million for the year ended March 31, 2025, an increase of 14% compared to Rs.29,801 million for the year ended March 31, 2024. The increase in revenue was largely attributable to a net increase in sales volumes of certain of our existing products and revenues from new products launched during the year ended March 31, 2025, both of which were partially offset by a net decrease in the sales prices of certain of our existing products.

 During the year ended March 31, 2025, we filed 111 Drug Master Files (“DMFs”) worldwide. Cumulatively, our total active worldwide DMFs as of March 31, 2025, were 1,629, including 264 active DMFs in the United States.

Gross Profit

Our total gross profit was Rs.190,428 million for the year ended March 31, 2025, representing 58.5% of our revenues for that period, compared to Rs.163,607 million for the year ended March 31, 2024, representing 58.6% of our revenues for that period.

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The following table sets forth, for the period indicated, our gross profit by segment:

	For the year ended March 31,
	2025					2024					2023
	(Rs. in millions)
	Gross Profit		% of Segment Revenue			Gross Profit		% of Segment Revenue			Gross Profit		% of Segment Revenue
Global Generics		179,606		62.0	%	Rs.	154,268		62.9	%	Rs.	132,719		62.1	%
PSAI		9,157		27.1	%		6,919		23.2	%		4,715		16.2	%
Others		1,665		77.9	%		2,420		61.9	%		1,909		62.8	%
Total	Rs.	190,428		58.5	%	Rs.	163,607		58.6	%	Rs.	139,343		56.7	%

The gross profit as a percentage of revenue from our Global Generics segment decreased to 62.0% for the year ended March 31, 2025, from 62.9% for the year ended March 31, 2024. This decrease was largely on account of price erosion in certain of our existing products.

The gross profit as a percentage of revenue from our PSAI segment increased to 27.1% for the year ended March 31, 2025, from 23.2% for the year ended March 31, 2024. This increase was primarily on account of lower manufacturing overheads and material costs.

Selling, general and administrative expenses

Our selling, general and administrative expenses were Rs.93,870 million for the year ended March 31, 2025, an increase of 22% compared to Rs.77,201 million for the year ended March 31, 2024. After taking into account the impact of exchange rate fluctuations of the Indian rupee against multiple currencies in the markets in which we operate, this increase was largely attributable to the following:

· an increase of 7% on account of higher sales and marketing expenses;

· an increase of 6% on account of increased personnel costs, primarily on account of annual raises and new hires;

· an increase of 3% on account of freight outward expenses;

· an increase of 1% on account of higher legal and professional fees; and

· an increase of 5% due to higher spending on other costs, including travel expenses, depreciation and amortization.

As a proportion of our total revenues, our selling, general and administrative expenses were at 28.8% for the year ended March 31, 2025, compared to 27.7% for the year ended March 31, 2024.

Research and development expenses

Our research and development expenses were Rs.27,380 million for the year ended March 31, 2025, an increase of 20% compared to Rs.22,873 million for the year ended March 31, 2024. This increase was primarily on account of higher development expenditures on certain products in our Global Generics segment, our biosimilars business and our PSAI segment, as well as on our novel oncology assets.

As a proportion of our total revenues, our research and development expense were higher at 8.4% for the year ended March 31, 2025, compared to 8.2% for the year ended March 31, 2024.

Impairment of non-current assets

Impairment of non-current assets were Rs.1,693 million for the year ended March 31, 2025, compared to Rs.3 million for the year ended March 31, 2024. Please refer to Note 12 (“Property, plant and equipment”) and Note 14 (“Other intangible assets”) of our consolidated financial statements for further details.

Other income, net

Our Other income, net was Rs.4,358 million for the year ended March 31, 2025, an increase of 4% compared to Rs.4,199 million for the year ended March 31, 2024. Please refer to Note 23 (“Other income, net”) of our consolidated financial statements for further details.

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Finance income, net

Our Finance income, net was higher at Rs.4,724 million for the year ended March 31, 2025, as compared to Rs.3,944 million for the year ended March 31, 2024.

This increase in net finance income was largely attributable to:

· higher net foreign exchange gains of Rs.1,322 million for the year ended March 31, 2025, compared to Rs.278 million for the year ended March 31, 2024;

· an increase in fair value changes and profit on sale of financial instruments measured at FVTPL, net of Rs.3,544 million for the year ended March 31, 2025, compared to fair value changes and profit on sale of financial instruments measured at FVTPL, net of Rs.3,149 million for the year ended March 31, 2024; and

· a net interest expense of Rs.152 million for the year ended March 31, 2025, compared to a net interest income of Rs.567 million for the year ended March 31, 2024.

Profit before tax

As a result of the above, our profit before taxes was Rs.76,784 million for the year ended March 31, 2025, an increase of 7% compared to Rs.71,870 million for the year ended March 31, 2024.

Tax expense

Our consolidated weighted average tax rate was 25.4% for the year ended March 31, 2025, compared to 22.5% for the year ended March 31, 2024.

Our tax expense was Rs.19,539 million for the year ended March 31, 2025, compared to Rs.16,186 million for the year ended March 31, 2024.

Please refer to Note 25 (“Income taxes”) of our consolidated financial statements for further details.

Profit for the year

As a result of the above, our net profit was Rs.57,245 million for the year ended March 31, 2025, representing 17.6% of our total revenues for such year, compared to Rs.55,684 million for the year ended March 31, 2024, representing 19.9% of our total revenues for such year.

Profit after tax attributable to the equity holders of the parent company was Rs.56,544 million for the year ending March 31, 2025, representing 17.4% of our total revenues for such period.

Fiscal Year Ended March 31, 2024 compared to Fiscal Year Ended March 31, 2023

Refer to Item 5.A. of our Annual Report on Form 20-F for the fiscal year ended March 31, 2024.

Fiscal Year Ended March 31, 2023 compared to Fiscal Year Ended March 31, 2022

Refer to Item 5.A. of our Annual Report on Form 20-F for the fiscal year ended March 31, 2023.

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5.B. Liquidity and capital resources

Liquidity

We have primarily financed our operations through cash flows generated from operations and a mix of long-term and short-term borrowings. Our principal liquidity and capital needs are for the purchase of property, plant and equipment, regular business operations and research and development.

Our principal sources of short-term liquidity are internally generated funds and short-term borrowings, which we believe are sufficient to meet our working capital requirements, in both the short term (i.e., the 12 months following the year ended March 31, 2025) and the long term (i.e., beyond such additional 12-month period).

Summary of statements of cash flows

The following table summarizes our statements of cash flows for the years presented:

	For the year ended March 31,
	2025			2024			2023
	(Rs. in millions)
Net cash from/(used in):
Operating activities	Rs.	46,428		Rs.	45,433		Rs.	58,875
Investing activities		(58,077	)		(40,283	)		(41,373	)
Financing activities		18,911			(3,763	)		(26,861	)
Net increase/(decrease) in cash and cash equivalents	Rs.	7,262		Rs.	1,387		Rs.	(9,359)

In addition to cash, inventory and accounts receivable, we had uncommitted lines of credit of Rs.50,904 million as of March 31, 2025 from our banks for working capital requirements. We draw upon these lines of credit based on our working capital requirements.

Cash Flow from Operating Activities

Year ended March 31, 2025 compared to year ended March 31, 2024

The result of operating activities was a net cash inflow of Rs.46,428 million for the year ended March 31, 2025, as compared to a net cash inflow of Rs.45,433 million for the year ended March 31, 2024.

The increase in net cash inflow of Rs.995 million was primarily due to a decrease in our working capital requirements.

Our average days’ sales outstanding (“DSO”) as of March 31, 2025 and March 31, 2024 were 95 days and 103 days, respectively.

Year ended March 31, 2024 compared to year ended March 31, 2023

The result of operating activities was a net cash inflow of Rs.45,433 million for the year ended March 31, 2024, as compared to a net cash inflow of Rs.58,875 million for the year ended March 31, 2023.

The decrease in net cash inflow of Rs.13,442 million was primarily due to an increase in our working capital requirements.

Our average days’ sales outstanding (“DSO”) as of March 31, 2024 and March 31, 2023 were 103 days and 103 days, respectively.

Cash Flow from Investing Activities

Year ended March 31, 2025 compared to year ended March 31, 2024

Our investing activities resulted in net cash outflows of Rs.58,077 million and Rs.40,283 million for the years ended March 31, 2025 and 2024, respectively, which was primarily on account of the following:

· net proceeds from sale of other investments of Rs.25,118 million for the year ended March 31, 2025, as compared to net purchases of other investments of Rs.15,704 million for the year ended March 31, 2024;

· acquisition of property, plant and equipment, and other intangible assets, net of disposals, of Rs.33,154 million for the year ended March 31, 2025, as compared to Rs.26,350 million for the year ended March 31, 2024; and

· the business acquisitions made of Rs.53,096 million for the year ended March 31, 2025, as compared to the business acquisitions made of Rs.0 million for the year ended March 31, 2024;

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Year ended March 31, 2024 compared to year ended March 31, 2023

Our investing activities resulted in net cash outflows of Rs.40,283 million and Rs.41,373 million for the years ended March 31, 2024 and 2023, respectively, which was primarily on account of the following:

· net purchases of other investments of Rs.15,704 million for the year ended March 31, 2024, as compared to net purchases of other investments of Rs.23,366 million for the year ended March 31, 2023; and

· the acquisition of property, plant and equipment, and other intangible assets, net of disposals, of Rs.26,350 million for the year ended March 31, 2024, as compared to Rs.18,784 million for the year ended March 31, 2023.

Cash Flow from Financing Activities

Year ended March 31, 2025 compared to year ended March 31, 2024

Our financing activities resulted in net cash inflows of Rs.18,911 million as compared to net cash outflows of Rs.3,763 million for the years ended March 31, 2025 and 2024, respectively, which was primarily on account of the following:

· net proceeds from short-term borrowings of Rs.24,490 million for the year ended March 31, 2025, as compared to net proceeds from short-term borrowings of Rs.5,493 million for the year ended March 31, 2024;

· payments of dividends of Rs.6,662 million for the year ended March 31, 2025, as compared to payments of dividends of Rs.6,648 million for the year ended March 31, 2024;

· interest payments of Rs.3,483 million for the year ended March 31, 2025, as compared to interest payments of Rs.2,266 million for the year ended March 31, 2024;

· payments of the principal portion of lease liabilities of Rs.1,294 million for the year ended March 31, 2025, as compared to payments of the principal portion of lease liabilities of Rs.1,147 million for the year ended March 31, 2024;

· payments made for the purchase of treasury shares of Rs.1,389 million for the year ended March 31, 2025, as compared to payments made for the purchase of treasury shares of Rs.0 million for the year ended March 31, 2024; and

· proceeds from the issuance of non-controlling interest (“NCI”) equity shares in a subsidiary of Rs.7,056 million for the year ended March 31, 2025, as compared to proceeds from issuance of NCI equity shares in a subsidiary of Rs.0 million for the year ended March 31, 2024.

Year ended March 31, 2024 compared to year ended March 31, 2023

Our financing activities resulted in net cash outflows of Rs.3,763 million and Rs.26,861 million for the years ended March 31, 2024 and 2023, respectively, which was primarily on account of the following:

· net proceeds from short-term borrowings of Rs.5,493 million for the year ended March 31, 2024, as compared to net repayment of short-term borrowings of Rs.19,382 million for the year ended March 31, 2023;

· payments of dividends of Rs.6,648 million for the year ended March 31, 2024, compared to payments of dividends of Rs.4,979 million for the year ended March 31, 2023;

· interest payments of Rs.2,266 million for the year ended March 31, 2024, compared to interest payments of Rs.1,853 million for the year ended March 31, 2023; and

· payments of the principal portion of lease liabilities of Rs.1,147 million for the year ended March 31, 2024 compared to payments of the principal portion of lease liabilities of Rs.1,015 million for the year ended March 31, 2023.

Liquidity and working capital

We manage our liquidity by ensuring, to the extent possible, that we will always have sufficient liquidity to meet our liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to our reputation.

As of March 31, 2025, we had working capital of Rs.119,720 million, including cash and cash equivalents of Rs.14,654 million, investments in term deposits with banks, bonds and commercial papers of Rs.9,948 million and investments in units of mutual funds of Rs.33,186 million.

As of March 31, 2024, we had working capital of Rs.152,010 million, including cash and cash equivalents of Rs.7,107 million, investments in term deposits with banks, bonds and commercial papers of Rs.33,599 million and investments in units of mutual funds of Rs.40,597 million.

Principal debt obligations

The following table summarizes our principal debt obligations (excluding obligations under leases) outstanding as of March 31, 2025:

	Payments due by period
Principal debt obligations	Total		Less than 1 year		1-5 years		More than 5 years
	(Rs. in millions)
Short-term borrowings (includes bank overdraft)	Rs.	38,045	Rs.	38,045	Rs.	-	Rs.	-
Long-term borrowings	Rs.	3,800	Rs.	-	Rs.	3,800	Rs.	-
Total obligations	Rs.	41,845	Rs.	38,045	Rs.	3,800	Rs.	-

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Annual rate of interest

The following table provides details of annual rates of interest for our principal debt obligations (excluding obligations under leases) outstanding as of March 31, 2025:

Debt	Amounts in millions		Currency(1)		Interest Rate(2)
Working capital borrowings	Rs.	5,129		RUB		Key rate + 470 bps to 590 bps
				MXN		TIIE + 1.35%
				INR		7.50%
				BRL		CDI+1.55%
Pre-shipment credit		32,855		INR		3 Month T-bill + 35 bps to 60 bps
				INR		1 Month T-bill + 35 bps
				U.S.$		6 Month SOFR + 10 bps to 65 bps
Long-term borrowings		3,800		INR		3 Months T-bill + 84 bps

(1) “BRL” means Brazilian reals, “EUR” means Euro, “INR” means Indian rupees, “MXN” means Mexican pesos, “RUB” means Russian rubles and “U.S.$” means U.S. dollars.

(2) “CDI” means Brazilian interbank deposit rate (Certificado de Depósito Interbancário), “Key rate” means the key interest rate published by the Central Bank of Russia, “SOFR” means Secured Overnight Financing Rate, “T-bill” means India Treasury bill interest rate and “TIIE” means the Equilibrium Inter-Banking Interest Rate (Tasa de Interés Interbancaria de Equilibrio).

Our short-term borrowings from banks are repayable within 12 months from the date of drawdown. Our objective in determining the borrowing maturity is to ensure a balance between flexibility, cost and continuing availability of funds.

Subject to obtaining certain regulatory approvals, there are no legal or economic restrictions on the transfer of funds between us and our subsidiaries or for the transfer of funds in the form of cash dividends, loans or advances.

Consistent with our risk management policy, we use interest rate swaps to mitigate the risk of changes in interest rates.

Cash and cash equivalents are primarily held in U.S. dollars, Euros, Indian rupees, Russian rubles, Chinese yuans (Renminbi), Romanian new leus and U.K. pounds sterling.

Material cash requirements

During the year ended March 31, 2025 our principal cash requirements were utilized for the purchase of property, plant and equipment of Rs.27,504 million, other intangible assets of Rs.6,894 million and business acquisition of Rs.53,096 million.

As of March 31, 2025, we had committed to spend Rs.14,567 million in capital expenditures under agreements to purchase property, plant and equipment. These amounts are net of capital advances paid in respect of such purchase commitments.

These commitments will be funded through the cash flows generated from operations, cash and cash equivalents, other investments and the cash flows from borrowings as required.

As of March 31, 2025 and 2024, we had uncommitted lines of credit from banks of Rs.50,904 million and Rs.61,131 million, respectively.

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5.C. Research and development, patents and licenses, etc.

Research and Development

Our research and development activities can be classified into several categories, which run parallel to the activities in our principal areas of operations:

· Global Generics, where our research and development activities are directed at the development of product formulations, process validation, bioequivalence testing and other data needed to prepare a growing list of drugs that are equivalent to numerous brand name products for sale in the highly regulated markets of the United States and Europe as well as emerging markets. Global Generics also includes our biologics business, where research and development activities are directed at the development of biologics products for the emerging as well as highly regulated markets. Our biologics research and development facility caters to the highest development standards, including cGMP, Good Laboratory Practices and bio-safety level IIA. Global Generics also include the products where we focus on the research, development, and commercialization of differentiated formulations.

· Pharmaceutical Services and Active Ingredients, where our research and development activities concentrate on development of chemical processes for the synthesis of API for use in our Global Generics segment and for sales in the emerging and developed markets to third parties. Our research and development activities also support our pharmaceutical services business, where we continue to leverage the strength of our process chemistry and finished dosage development expertise to target innovator as well as emerging pharmaceutical companies. The research and development is directed toward providing services to support the entire pharmaceutical value chain, from discovery all the way to the market.

In the years ended March 31, 2025, 2024 and 2023, we expended Rs.27,380 million, Rs.22,873 million and Rs.19,381 million, respectively, on research and development activities. These increases were primarily on account of higher developmental expenditures in our Global Generics business and PSAI business. Each of these business segments has its own research and development and patent policies, and has numerous products in various stages of development. For further information on these policies and these products, see “Item 4. Information on the Company - Item 4.B Business overview.”

Patents, Trademarks and Licenses

We have filed and been issued numerous patents in our principal areas of operations: Global Generics and Pharmaceutical Services and Active Ingredients. We expect to continue to file patent applications seeking to protect our innovations and novel processes in several countries, including the United States. Any existing or future patents issued to or licensed by us may not provide us with any competitive advantages for our products or may even be challenged, invalidated or circumvented by our competitors. In addition, such patent rights may not prevent our competitors from developing, using or commercializing products that are similar or functionally equivalent to our products. As of March 31, 2025, we have more than 2,600 trademarks filed with the Registrar of Trademarks in India which are either registered or are pending registration. We have also filed registration applications for non-U.S. trademarks in other countries in which we do business. We market several products under licenses in several countries where we operate.

5.D. Trend Information

Inflation

In recent years, there has been an accelerated rate of global inflation (a trend which might continue in the near future) that has resulted, and may continue to result, in increased costs of labor, raw materials, other supplies and freight and distribution costs, among others. For the pharmaceutical industry, the pricing dynamics of our products generally does not provide the opportunity to pass on such costs to customers. Inflation may also result in higher interest rates and increased costs of capital. For additional details, see the discussion in Item 3.D. of this report under “Risk factors - Current economic conditions may adversely affect our industry, financial position, results of operations and cash flows.”

Military conflicts

While the broader economic consequences of the military conflict between Russia and Ukraine are currently difficult to predict, geopolitical instability, the imposition of sanctions and other restrictive measures against Russia and any retaliatory actions taken by Russia in response to such measures could adversely affect the global geopolitical and economic environment, which could in turn adversely impact our operations and growth in Russia and other countries of the former Soviet Union. Similarly, the recent escalations in military tensions between India and Pakistan could worsen, which could adversely impact our operations in India and/or the global geopolitical and economic environment. Moreover, the war declared by Israel on Hamas in October 2023 and the ongoing military activity in the region could escalate and involve surrounding countries in the Middle East, which could adversely affect the global geopolitical and economic environment. For additional details, see the discussion in Item 4.B. of this report under “Our Principal Areas of Operations - Global Generics Segment - Russia and other Countries of the former Soviet Union and Romania - Impact on our Operations due to the military conflict between Russia and Ukraine” and Item 3.D. of this report under “Risk Factors - We have operations in certain countries  and geographies susceptible to political and economic instability that could lead to disruption or other adverse impact on such operations”.

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Others

For additional trend information, please see “Item 5.A - Fiscal Year Ended March 31, 2025 compared to Fiscal Year Ended March 31, 2024” and “Item 4. - Information on the Company”. 

5.E. Critical Accounting Estimates

Not Applicable.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

6.A. Directors and senior management

The list of our directors and executive officers and their respective age and position as of March 31, 2025 was as follows:

Directors Name (1)	Age (in yrs.)		Position
Mr. K. Satish Reddy (2)(3)		57	Chairman
Mr. G.V. Prasad (2)(4)		64	Co-Chairman and Managing Director
Ms. Kalpana Morparia (5)		75	Director
Mr. Leo Puri		64	Director
Ms. Shikha Sharma		66	Director
Dr. K.P. Krishnan		65	Director
Ms. Penny Wan		59	Director
Mr. Arun M. Kumar		72	Director
Dr. Claudio Albrecht		65	Director
Dr. Alpna Seth		61	Director
Mr. Sanjiv Mehta		64	Director

(1)  Except for Mr. K. Satish Reddy and Mr. G.V. Prasad, all of the directors are independent directors under the corporate governance rules of the New York Stock Exchange.

(2)  Full-time director.

(3)  Brother-in-law of Mr. G.V. Prasad.

(4)  Brother-in-law of Mr. K. Satish Reddy.

(5)  Term as a director ended on July 30, 2024.

Executive Officers

We classify our officers as “executive officers” if they have membership on our Management Council. Our Management Council consists of various business and functional heads and is also referred to as our senior management. As of March 31, 2025, the Management Council consisted of:

Name and Designation	Education/Degrees Held	Age	Experience in years	Date of commencement of employment	Particulars of last employment
Mr. K. Satish Reddy(1) Chairman	B. Tech., M.S. (Medicinal Chemistry)	57	33	January 18, 1993	Director, Globe Organics Limited
Mr. G.V. Prasad (2) Co-Chairman and Managing Director	B. E. (Chem. Eng.), M.S. (Indl. Admn.)	64	41	June 30, 1990	Promoter Director, Benzex Labs Private Limited
Mr. Erez Israeli Chief Executive Officer	Graduate Bar Ilan University MBA in Finance and Marketing Bar Ilan University	58	31	April 2, 2018	Executive Officer Enzymotec
Mr. Parag Agarwal Chief Financial Officer (3)	Chartered Accountant (CA), Company Secretary (CS)	59	37	November 2, 2020	CFO-Health, Reckitt Benckiser PLC
Mr. M.V. Ramana Chief Executive Officer - Branded Markets (India and Emerging Countries)	MBA	57	33	October 15, 1992	-
Ms. Archana Bhaskar Chief Human Resource Officer	MBA (IIM)	58	35	June 15, 2017	Human Resources head (Global commercial business) Royal Dutch Shell
Mr. Sanjay Sharma Global Head of Manufacturing	B. Tech (IIT), Business Leader’s program (IIM) and General Management program (IIM)	57	34	August 1, 2017	Integrated Supply Chain Operations (Coca Cola) for India and South Asia
Mr. Deepak Sapra Global Head of PSAI	B.E., PGDM, MBA	50	25	January 23, 2003	Asst. Divisional Engineer, Indian Railways
Dr. Jayanth Sridhar Global Head of Biologics	BE, M Sc, M.Sc - Technology, PhD	54	25	May 17, 2021	Senior Vice President, Biological E. Limited
Mr. Marc Kikuchi Chief Executive Officer -North America Generics (4)	MBA, BA (Molecular and Cell Biology)	56	31	February 1, 2019	CEO, Americas for Zydus Pharmaceuticals, Inc.
Mr. Patrick Aghanian Head of Generics, Europe, and Head of Consumer Health	MBA, BA	60	37	October 7, 2019	Global Head of Zentiva
Mr. Phanimitra B Chief Information Officer	Bachelors in Engineering From BITS Pilani and an MBA from IIM Bangalore	46	21	July 14, 2014	Senior Manager- Hewlett Packard
Mr. Sushrut Kulkarni Global Head of Integrated Product Development Organisation	Masters in Pharmacy	55	28	May 4, 2022	Executive Vice President and Head - Global Pharmaceutical Development, Glenmark
Mr. M.V. Narasimham Chief Financial Officer (5)	Chartered Accountant	56	33	June 12, 2000	Executive, Sanmar Group
Mr. Krishna Venkatesh Global Head - Quality and Pharmacovigilance	MS degree in Pharmaceutics from University of Mississippi and a B. Pharm degree from BITS Pilani	52	29	March 18, 2010	Director - Teva Pharmaceuticals
Mr. Milan Kalawadia Chief Executive Officer-North America Generics (6)	Bachelor of Science degree in Management Science and Information Systems from Rutgers University, School of Business; and an MBA from Carnegie Mellon University, Tepper School of Business	49	19	April 10, 2006	-

(1) Brother-in-law of Mr. G.V. Prasad.

(2)	Brother-in-law of Mr. K. Satish Reddy.
(3)	Ceased to be Chief Financial Officer effective as of July 31, 2024.

(4)	Ceased to be member of Management Council member and Senior Management Personnel effective as of May 24, 2024
(5)	Appointed as Chief Financial Officer of the company effective as of August 1, 2024.
(6)	Appointed as Chief Executive Officer-North America Generics effective as of May 25, 2024

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There was no arrangement or understanding with major shareholders, customers, suppliers or others pursuant to which any director or executive officer referred to above was selected as a director or member of our Management Council.

Biographies – Directors

Mr. K. Satish Reddy is the Chairman of our company. He joined us in 1993 and since then has held positions of increasing responsibility. He led the organization’s transition from a uni-focused manufacturer of APIs (active pharmaceutical ingredients) to a company that moved up the value-chain with a diverse product portfolio of Finished Dosage Formulations. He oversaw the expansion and establishing of a strong footprint for finished dosage products in Russia, China and other emerging markets.

As an active member of major industry associations and governmental panels, he plays a key role in shaping policies concerning the pharmaceutical sector that include India’s patent law, drug pricing and important amendments to the Drugs & Cosmetics Act. He is the Member of the CII Governing Council and a Member of the IGBA CEO Advisory Committee. He also plays a key role in shaping Skill Development in India. He is the governing board member of the Young India Skill University and in the past, he was the Chairman of the Life Sciences Skill Development Council under The National Skill Development Corporation (NSDC), an organization, working in partnership with various stakeholder groups, to serve and address the skill shortfalls in the Life Sciences Sector across India. He has also led various National Committees on the India G20 Presidency for 2023. He was the President of the Indian Pharmaceutical Alliance, a premier industry association of leading research based Indian companies from 2019-2021 & 2013-2015. He was the Chairman of the Board of Governors of NIPER Hyderabad. He was a member of the Drugs Technical Advisory Board of India, the Chairman of the Andhra Pradesh Chapter of the Confederation of Indian Industries (CII) and head of its National Committee on Pharmaceuticals. In May 2015, the Ministry of Labour and Employment, Government of India, nominated him as Chairman of the Board of Governors of the National Safety Council.

Keeping true to the legacy of the founder of our company, Dr. Anji Reddy, he drives our Corporate Social Responsibility initiatives. The Dr. Reddy’s Foundation, of which he is Chairman, works to help the less privileged create sustainable livelihoods through appropriate vocational education. He is a Trustee of the Naandi Foundation, which works in the areas of child rights and education, safe drinking water, agriculture export marketing support and other much needed empowerment initiatives that India need. He is also one of the Directors of Dr. Reddy’s Institute of Life Sciences, the not- for-profit institute engaged in pioneering and innovative research in unifying areas of chemistry, biology and chemical biology. He was identified as a “Young Global Leader for 2007” by the World Economic Forum, and was presented with the “IBLA - India Corporate Citizen of the Year” award by CNBC in 2005 for his contributions to Corporate Social Responsibility. He holds a degree in Chemical Engineering from Osmania University, India, and an M.S. in Medicinal Chemistry from Purdue University, USA, where he received the 2009 Distinguished Alumnus Award from the School of Pharmacy and Pharmaceutical Sciences.

Mr. G.V. Prasad is a member of our Board of Directors and serves as our Co-Chairman and Managing Director. He has a Bachelor of Engineering degree in Chemical Engineering from Illinois Institute of Technology, Chicago in the United States of America, and an M.S. in Industrial Administration from Purdue University, Indiana in United States of America. Mr. Prasad’s emphasis on research, innovation, transparency, business ethics and leaner corporate structures has helped shape our company into what it is today - an organization of global repute, recognized industry-wide for scientific innovation, progressive people practices and high standards of corporate governance. He is driving the necessary imperatives for our company to engage even more deeply with the human aspects of health. Mr. Prasad focuses on mentoring leaders, driving innovation in science, technology and digitalization while championing the cause of the planet, purpose, and patients. Mr. Prasad also ensures that our company is well-positioned for our future, drawing upon his 36 years plus of leadership experience in the pharmaceutical industry to help our company anticipate trends and envision the future of healthcare.

Mr. Prasad is active on the boards of public and private institutions such as the Indian School of Business (ISB) and the International Foundation for Research and Education. Mr. Prasad is also a member of the governing body of Mckinsey Centre for CEO Excellence and Institute of Public Health Sciences Hyderabad Society.

Mr. Prasad was listed among the Top 50 CEOs that India ever had by Outlook magazine in 2017 and was recognized as one the top 5 Most Valuable CEOs of India by Business World in 2016. He was also listed in the prestigious ‘Medicine Maker 2018 Power List’ of most inspirational professionals shaping the future of drug development, and has been named India Business Leader of the year by CNBC Asia, in 2014 & 2015.

Mr. Leo Puri has been a member of our Board of Directors since October 2018, and serves as the lead independent director. Mr. Puri was the Managing Director of UTI Asset Management Co. Ltd. from August 2013 to August 2018. Mr. Puri assumed office of the Chairman of JP Morgan Chase for South and South East Asia in late 2020 for three years. Since late 2023, he has assumed an advisory role as Co- Chairman, Asia Advisory Council. In his career of nearly four decades, worked as Director with McKinsey and Company and as Managing Director with Warburg Pincus. Mr. Puri has worked in the United Kingdom, the United States and Asia. Since 1994, he has primarily worked in India. At McKinsey, he has advised leading financial institutions, conglomerates and investment institutions in strategy and operational issues. He has contributed to the development of knowledge and public policy through advice to regulators and government officials. At Warburg Pincus, he was responsible for leading and managing investments across industries in India. He also contributed to financial services investments in the international portfolio as a member of the global partnership. Mr. Puri is an independent director on the Board of Hindustan Unilever Limited and is the independent chairman of Fortis Healthcare Ltd. He served as an independent director on the board of Tata Sons, till the expiry of his term in March 2025. Mr. Puri has a Master’s degree in P.P.E. from University of Oxford, and a Master’s degree in Law from University of Cambridge.

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Ms. Shikha Sharma has been a member of our Board of Directors since January 2019. Ms. Sharma was the Managing Director and CEO of Axis Bank, India’s third largest private sector bank from June 2009 until December 2018. As a leader adept at managing change, she led the Bank on a transformation journey from being primarily a corporate lender to a bank with a strong retail deposit franchise and a balanced lending book. Ms. Sharma has more than three decades of experience in the financial sector, having begun her career with ICICI Bank Ltd in 1980. During her tenure with the ICICI group, she was instrumental in setting up ICICI Securities. As Managing Director and CEO of ICICI Prudential Life Insurance Company Ltd., she led that company to become the No. 1 private sector life insurance company in India.

She was a member of the Reserve Bank of India (“RBI”) Technical Advisory Committee, the RBI’s panel on Financial Inclusion, and the RBI’s Committee on Comprehensive Financial Services for Small Businesses and Low-Income Household. She has chaired CII’s National Committee on Banking 2015-2017. Ms. Sharma holds an MBA from the Indian Institute of Management, Ahmedabad, B.A. (Hons.) in Economics and a Post Graduate Diploma in Software Technology from National Centre for Software Technology (NCST), Mumbai. Ms. Sharma is also an independent director on the Boards of Mahindra and Mahindra Ltd, Tech Mahindra Ltd, Piramal Enterprises Limited and Tata Consumer Products Ltd (Formerly known as Tata Global Beverages Ltd.). She is a member of the Board of Governors of the Indian Institute of Management (“IIM”) Lucknow, and an advisor to several companies in India.

Dr. K.P. Krishnan has been a member of our Board of Directors since January 2022. For nearly 37 years, Dr. Krishnan served in the Indian Administrative Service (“IAS”). He superannuated from the IAS in December 31, 2019. In his IAS career he has served in various field and secretariat positions in the Government of India, Government of Karnataka and at the World Bank. Besides field positions like District Collector Mangalore, in the Government of Karnataka he served in the departments dealing with agriculture, co-operatives and marketing, urban development and infrastructure, commercial taxes and finance. His key roles in the Government of India include: a) Secretary, Ministry of Skill Development and Entrepreneurship; b) Special/Additional Secretary, Department of Land Resources, Ministry of Rural Development; c) Additional Secretary, Department of Economic Affairs, Ministry of Finance; d) Secretary, Prime Minister’s Economic Advisory Council; and e) Joint Secretary, Department of Economic Affairs, Ministry of Finance. In these positions he served on the boards of corporations as well as boards of statutory regulatory authorities. In parallel with his government career, Dr. Krishnan has been a strong researcher/academic. Besides being visiting faculty at IIM Bangalore, ISB and Ashoka University, he held the prestigious Bok Visiting Professor of Regulation at the University of Pennsylvania Law School in 2012-13. From August 7, 2020 until December 31, 2021, he served as the IEPF Chair Professor of Economics at the National Council of Applied Economic Research (NAER) New Delhi. At present, he is an Independent Director on the Boards of Tata Consumer Products Limited, Shriram Capital Private Limited, Helios Trustee Private Limited and a director in the Indian Institute of Human Settlements. Dr. Krishnan was educated in Economics at St. Stephens College and Law at the Campus Law Centre University of Delhi. He joined the IAS in August 1983 and belongs to the Karnataka cadre. He joined IIM Bangalore in 1999 and was awarded FPM (Ph.D) in Economics in the 2003 graduation ceremony.

Ms. Penny Wan has been a member of our Board of Directors since January 2022. She was most recently Amgen’s Vice President of the Japan and Asia Pacific region. With over 20 years of experience in the biopharmaceuticals industry, she led Amgen’s geographic expansion efforts in the region. Since joining Amgen in 2014, she has been instrumental in building its commercial presence across the region, ensuring that innovative medicines reach patients, payers and physicians in these markets. Prior to Amgen, Ms. Wan was General Manager of Roche Pharma China, which became one of the fastest growing multinational corporations in that country. She spearheaded innovative partnership solutions with government, professional and patient groups to improve access and outcomes for patients. Ms. Wan also worked in the pharmaceuticals division of Wyeth, where she held various management, marketing and commercial positions in the United States, Hong Kong, and Taiwan. During her time in China, Ms. Wan served as an executive committee member of RDPAC (R&D based Pharmaceutical Association Committee), where she led the industry-shaping efforts in biologics and served as Vice President of the Shanghai Association of Enterprises with Foreign Investments. She received the 2013 White Magnolia Memorial Award from the Shanghai municipality in recognition of her contributions to the city. Ms. Wan brings deep experience across healthcare. She has comprehensive management experience and strategic skills in leading sales and marketing, manufacturing, business development, start-up, country and regional operations in global markets, including China and Japan in world class pharma and healthcare companies. Additionally, Ms. Wan has worked across multiple sectors in pharmaceuticals, infant formula, nutrition, vaccines, immunology, oncology, cardiovascular, bone and mental health, among others. Ms Wan co-founded and is the chairwoman of Heronova Life Sciences Holding. Ms. Wan holds a Graduate Diploma in business administration from Monash University and Chinese University of Hong Kong and a Bachelor of Science in Biochemistry and Pharmacology from Monash University of Australia.

Mr. Arun M. Kumar has been a member of our Board of Directors since August 2022. He is a Managing Partner at Celesta Capital, a leading deep technology venture capital firm that leverages synergies between leading centres of innovation in the United States and India to create globally impactful enterprises. In February 2022, Mr. Arun completed his five-year term as the Chairman and CEO of KPMG in India. In this role, he led a large organization of thousands of talented professionals engaged in providing assurance, tax, and advisory services, through a period of extraordinary organizational transformation and growth. He was a member of the global board of directors of KPMG as well as its Europe, Middle East and Africa (“EMA”) board. Mr. Arun previously served in President Obama’s Administration as Assistant Secretary of Commerce for Global Markets and as Director General of the U.S. & Foreign Commercial Service (“USFCS”), under the leadership of Commerce Secretary Penny Pritzker. As the Administration’s lead official to promote U.S. exports, foreign direct investment, and enhanced market access around the world, he led a team of 1,700 professionals in 78 countries and all 50 states of the United States. The Global Markets unit and USFCS saw substantial growth in coverage and impact during his tenure.

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During that time, Mr. Arun also had a special focus on the U.S.-India economic relationship, helping establish high level bilateral dialogues in areas ranging from innovation to infrastructure and working closely with the U.S. India CEO Forum. Prior to his nomination by President Obama, Mr. Arun was a partner at KPMG LLP in the United States and was a member of the Board of the firm. Based in Silicon Valley, he led KPMG’s Management Consulting practice in the West. Before joining KPMG, he was a co-founder, CEO, and CFO of three technology companies in Silicon Valley; over the years, Mr. Arun has been a mentor to entrepreneurs in Silicon Valley and India. Mr. Arun is a member of the Council on Foreign Relations. Mr. Arun is an advisor to the Board of Directors of the U.S.-India Business Council. He serves on the board of Indiaspora, an organization that links accomplished and influential people of Indian origin in many countries to enhance the relationships between their country of residence and India. Mr. Arun serves as a director on the Board of our wholly owned U.S. subsidiary Dr. Reddy’s Laboratories Inc. and serves as a Nominee Director on the Board of Agnikul Cosmos Private Limited. He is the author of “The Global Trade Paradigm,” published by HarperCollins in 2023.Mr. Arun received his master’s degree from the MIT Sloan School of Management. He earned his undergraduate degree, in physics, as a National Science Talent Scholar, from the University of Kerala.

Dr. Claudio Albrecht most recently was a co-founder and managing partner of Albrecht, Prock & Partners and, until August 31, 2018, was the CEO of the publicly listed STADA AG. Before this assignment Dr. Albrecht worked in and with the Generic industry for more than 30 years. Dr. Albrecht started his pharmaceutical career at Sandoz in 1987 in Austria and became General Manager of its generic businesses in the Netherlands, in Germany and the USA, before leaving to become CEO of the Ratiopharm Group in 2000. In his time as CEO of the Ratiopharm Group, he was driving the internationalization process of the German drug maker beyond Europe and was material in the initiation of the development, manufacturing and commercialization project of Ratiopharm’s Biosimilars program. Ratiopharm was first to market with the Biosimilar Filgrastim in Europe. In 2007, Dr. Albrecht founded together with Peter Prock the strategy consulting firm CoMeth in Slovakia before he was asked to assume the role of CEO and Chairman of the Board of the Actavis Group. Actavis was operating in over 50 countries worldwide with standalone 2012 revenues in excess of € 2 billion. Under his leadership, Actavis was sold to Watson for U.S.$ 6 billion, which represented an above average industry multiple. As CEO of Actavis, Dr. Albrecht initiated a total turn around process and started a joint venture for the development and commercialization of recombinant Insulin and its analogues with the objective to build the first Generic “one stop shop” in Diabetes. After the divestiture of Actavis, Dr. Albrecht founded with Peter Prock the Zug/Switzerland based Albrecht, Prock & Partners AG (“AP&P”). Together with private equity and strategic investors, AP&P worked on numerous acquisition projects amongst which the take private initiative for STADA AG was the most significant. STADA AG was the largest leveraged buyout of a German listed company ever. Dr. Albrecht agreed to manage the company for an interim period of one year and led all the necessary changes and strategic initiatives. In September 2018, Dr. Albrecht returned to AP&P. Claudio holds a PhD in law. 

Dr. Alpna Seth served as the President and Chief Executive Officer of Nura Bio Inc., a neurology pharmaceutical company for three years, until she retired starting October 2022. Prior to this, Dr. Seth was the Chief Operating Officer of Vir Bio Inc., a biopharma pioneer for treating infectious diseases. Before that, for nearly two decades from 1998 to 2017, Dr. Seth was a senior executive at Biogen Inc., a leading global biopharmaceutical company. Here, over the years she undertook several leadership roles with increasing profit and loss responsibility, spanning research and development to commercialization of new drugs, globally. She was instrumental in establishing Biogen’s strategic expansion in Asia as a founding Managing Director in India with its HQ in Gurgaon and then returning to Biogen’s global HQ in the U.S to lead the launch of its largest multibillion-dollar neurology drug franchise world-wide. In 2014 as Senior Vice President, she moved to Europe to spearhead Biogen’s foray into biosimilars with the creation of one of the fastest growing biosimilars businesses in the industry. Along with deep and broad industry expertise in biopharma, Dr. Seth’s experience includes health care and life sciences tools, industrial biotechnology, diagnostics, and management consulting. In addition to North America, she has lived and worked in Asia and in Europe. Dr. Seth has a track-record of creating and leading new businesses across therapeutic areas and modalities including biologics, small molecules, gene therapy and RNA-based therapeutics. In addition, Dr. Seth brings extensive corporate governance and strategic oversight experience as a member of the Board of Directors of large publicly listed multinationals and VC-funded private biotech companies. Dr. Seth previously served on the board of directors of Seagen Inc. from 2018 until its acquisition by Pfizer Inc. in December 2023. Dr. Seth currently serves as an independent Director on the boards of two public (NASDAQ listed) companies- Bio-Techne and Keros Therapeutics. Dr. Seth received a Ph.D. in biochemistry and molecular biology from University of Massachusetts Medical School and conducted her post-doctoral research at Harvard University in immunology and structural biology, both as a Howard Hughes Medical Institute Fellow. She is also a graduate of Harvard Business School’s Advanced Management Program. 

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Mr. Sanjiv Mehta is the Executive Chairman of L Catterton India, a private equity enterprise, Board Member (Non-Executive) of Air India Ltd & Danone S.A., France and is the President Commissioner (Non-Executive Chairman) of PT Unilever TbK, Indonesia. Mr Mehta has been the Chairman/ CEO and Managing Director (2013-23) of Hindustan Unilever Limited (“HUL”) which is India’s foremost fast-moving consumer goods company. During his 10 years at the helm of HUL, its market capitalization increased from $17 billion to $76 billion, making it the fifth most valuable company in India and the most valuable business for Unilever. Mr. Mehta was also the President of Unilever South Asia, having a combined turnover of $9 billion, and a member of ‘Unilever Leadership Executive’, the global executive board of the consumer goods giant. Mr. Mehta has been the CEO / Executive Chairman of Unilever Businesses in different parts of the world for 21 years from 2002-23. He was Chairman and Managing Director of Unilever Bangladesh Limited (2002-06), Chairman and CEO of Unilever Philippines Inc. (2007-08), Chairman of Unilever - North Africa and Middle East (2008-13) and took over India and South Asia responsibilities from 2013. In each of these roles he left his imprint by turning around businesses in trouble, winning major competitive battles and accelerating growth and margins. 

Mr. Mehta has done his Bachelor’s in Commerce, Chartered Accountancy and has also completed his Advanced Management Program (Harvard Business School). Mr. Mehta has been the President of India’s oldest and largest trade body FICCI (Federation of Indian Chambers of Commerce and Industry) during 2021-22, is a member of the South Asia Advisory Board of Harvard Business School and is Chairman Emeritus of ‘Vikaasa’, a coalition of top Indian and multi-national companies.  

During the period when Mr. Mehta was heading HUL it won several recognitions, including the prestigious The Economic Times ‘Company of the Year’ & ‘Corporate Citizen of the Year’ awards, Business Standard’s ‘Company of the year’ award, the ‘Best Governed Company’ award by the Asian Centre for Corporate Governance and Sustainability and the 'Outstanding Company of the Year' award at CNBC-TV18’s India Business Leader Awards (“IBLA”). Forbes rated HUL as the most innovative company in India and the 8th most innovative company in the world. Aon Hewitt in a global study rated HUL as the 3rd best company globally for building leaders. Mr. Mehta was conferred the honorary degree of ‘Doctor of Philosophy in Business Management’ by Xavier University (Xavier Institute of Management) in 2019. He has received several personal recognitions including the ‘Best CEO Multinational’ by Forbes, the ‘Management Man of the Year’ by Bombay Management Association, the ‘CA Business Leader’ by The Institute of Chartered Accountants of India, the ‘Best Transformational Leader’ by the Asian Centre for Corporate Governance and Sustainability, the ‘Business Leader of the Year’ by The Economic Times, ‘Best CEO’ Award from Business Today, Pralhad P. Chhabria Memorial Global Award, the ‘JRD Tata Corporate Leadership award’ by the All India Management Association, the ‘Sir Jehangir Ghandy Medal’ by Xavier School of Management (XLRI), Jamshedpur, ‘IMPACT Person of the Year’ by exchange4media group (Business World), ‘Lifetime Achievement Award’ by CEO’s Association for Inclusive India -SKOCH Group, ‘CEO of the year’ by Business Standard and ‘Best of the Best CEO’s’ by Fortune. He has also been inducted into the ‘Hall of Fame’ by The Institute of Chartered Accountants of India. 

Biographies - Executive Officers 

Mr. Erez Israeli is Chief Executive Officer of our company and prior to that he was our Chief Operating Officer and the Global Head of Generics and PSAI business. He joined us in 2018. With over 31 years of experience in the pharmaceutical industry, Mr. Israeli is an accomplished leader with a proven track record of achievement. Prior to joining us, Mr. Israeli was President and Chief Executive Officer of Enzymotec. Prior to that, he spent 23 years working at Teva Pharmaceutical Industries Limited (“Teva”), where he held several leadership positions in the API and pharmaceutical (Generics, Specialty and OTC) businesses. His positions of responsibility included Vice President Marketing & Sales for North America, Vice President Asia Operations, President of Teva API, Group Executive Vice President, Head of Global Quality, and President & CEO of Growth Markets. He was also the Head of the Global Quality function for Teva and has held Board positions at subsidiaries of Teva. He graduated from Bar Ilan University in Israel, majoring in art, economics and business administration, and received an MBA in Finance and Marketing from Bar Ilan University. Under Mr. Israeli leadership, our company has seen significant growth in both revenue and profitability. Our company has concluded acquisitions of key assets in India and internationally as well as launched several first-to-market products. Mr. Israeli has also steered us through our pandemic response, ensuring that commitments to supply medicines to patients and to employees’ safety are met. Under Mr. Israeli’s guidance, we have also broken new ground on digitalization across Research & Development, Manufacturing and Sales – along with our focus on innovation, this will yield significant dividends in the years to come.

Mr. M.V. Ramana is Chief Executive Officer, Branded Markets (India and Emerging Markets) and leads innovation for our company. In this role, he leads a multicultural team in 45 countries. A passionate believer in the organization’s purpose of accelerating access to innovative and affordable healthcare, Mr. Ramana has spearheaded our company’s foray into several new markets and spaces and has secured its position as a leading generics player in them. He is also a member of Management Council of our company. As the CEO of Branded Markets, dealing with complex, ambiguous business environments which present a huge growth potential; Mr. Ramana has been able to think ahead and build robust strategies which have delivered market beating growth in their respective spaces. Not only has he been able to push the envelope on new therapy areas but has also built new age skills in the space of sales, marketing and portfolio building. Mr. Ramana has demonstrated ambidexterity and an appetite for risk as he spearheads disruptive spaces, navigating new business models and leveraging both deep science and technology platforms. Leading multiple workstreams across business units and geographies, he is currently engaged in building the Innovative Products side of the business across our company. Mr. Ramana joined us as a Management Trainee in 1992 in the International Marketing division of the Branded Formulations business. Since then, he has handled various critical assignments from setting up the business in several countries across Asia, Latin America, Africa Russia, the Middle East and our joint venture in China. He is an MBA from Osmania University, Hyderabad and has done the ISB-Kellogg management development programme.

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Ms. Archana Bhaskar is our Chief Human Resources Officer and a member of our Management Council. Ms. Bhaskar oversees our Human Resources and Corporate Communications. She joined our company in June 2017 and has more than 33 years of people management experience across diverse industries, geographies and companies. Prior to joining us, Ms. Bhaskar was with Royal Dutch Shell, Singapore, where she was global head of Human Resources for the Commercial Businesses. Earlier, she worked with Unilever, where she held positions of European and global responsibility, as well as large Indian corporations with whom she consulted in professionalizing Human Resources policies and practices. Ms. Bhaskar is an alumna of Lady Shri Ram College, Delhi University, where she majored in Psychology and Mathematics and the Indian Institute of Management, Bengaluru from where she completed her Master’s Degree in Business Administration. 

Mr. Sanjay Sharma is our Global Head of Manufacturing.  He leads our manufacturing and supply chain, and also anchors our product selection to commercialization and our environmental, social and governance (“ESG”) efforts. Sanjay is a Transformational Leader with close to 34 years in the FMCG & Pharmaceuticals industry handling diverse set of roles spanning across Manufacturing, Supply Chain, Sales, ESG and Business Transformation in both emerging and developed markets. Sanjay holds a Bachelor’s degree in Chemical Engineering from IIT Delhi, and General Management from IIM Ahmedabad. He also completed the Advanced Management Program (AMP) from Harvard Business School. 

Mr. Deepak Sapra is the Global Head of the Pharmaceutical Services and Active Ingredients (“PSAI”) business. As part of his role, he heads the API business, the Aurigene Pharmaceutical Services Limited (“APSL”) business, public health initiatives and business to business collaborations for our company. In addition, he also heads Global Portfolio and Product Management for Dr Reddy’s. Mr. Sapra joined our company in 2003 from the Indian Institute of Management (“IIM”), Bangalore and has since then undertaken various roles in Marketing, Sales, Business Development and Portfolio covering most markets around the world. He also led the COVID initiatives for Dr Reddy’s on therapeutics as well as on vaccines. Mr. Sapra education is in engineering and management. Prior to joining our company, he worked in the Indian Railway Services, Government of India. He has also been a Fulbright fellow and a Chevening scholar. He is also a published author and his first book was published in 2018. He is also the co-founder of a charitable trust that works for people with disabilities in eastern India. 

Dr. Jayanth Sridhar is the Global Head of Biologics, having joined Dr. Reddy’s Laboratories in May 2021. With an extensive career spanning 25 years, Dr. Sridhar has progressively taken on leadership roles of increasing responsibility in Biologics at companies specializing in the development and manufacturing of vaccines, novel biologics, and biosimilars.  He has been instrumental in the development, launch and commercial manufacturing of six novel vaccines/biologics and over twenty biosimilar products in both highly regulated and emerging markets. Additionally, Dr. Sridhar has built and led teams across three continents (the United States, Europe and India) while working with renowned organizations such as Merck, BioMarin, Biocon, Cipla BioTec, Alvotech, Biological E and presently Dr. Reddy’s Biologics. Dr. Sridhar is passionate about organizational development, technical problem-solving, and people leadership and mentoring.  

Mr. Patrick Aghanian serves as Head of Generics, Europe, and Head of Consumer Health.  He has been with us since 2019, and has worked in pharmaceuticals for 30 years.  He started his career with Glaxo SmithKline Consumer Health, where he held various General Management positions for 8 years.  He then moved to the prescription business, when he joined Novartis Pharma.  After 5 years with Novartis, he joined Sanofi, where he held various senior General Management and regional head roles for 10 years. His last assignment with Sanofi was to divest the European generic business in October 2018, now known as Zentiva. Mr. Aghanian has experience spanning originator, consumer health and generic pharmaceuticals, including specialist fields such as Oncology, Diabetes and rare diseases.  Patrick earned his Master of Business Administration (MBA) from the UCLA Anderson School of Management/University of California, Los Angeles and holds a Bachelor of Arts from the University of California, Los Angeles. 

Mr. Phanimitra B. serves as the Chief Digital and Information Officer of our company. In this role, he has global responsibility for Digital Transformation, Process Excellence and Information Technology Management of our company. Mr. Phanimitra joined our company in 2014 and played various roles – setting up the Analytics Centre of Excellence, leading corporate strategy and digital transformation for Dr. Reddy’s India and Emerging markets businesses. Before joining our company, he worked with Hewlett Packard for over 11 years with roles in strategy, analytics & transformation consulting for customers across industries in the United States, India and Asia-Pacific region. In 2021, he was listed in the Analytics India Magazine’s 50 Most Influential AI Leaders in India. He holds a Bachelors in Engineering from BITS Pilani and an MBA from IIM Bangalore.

Mr. Sushrut Kulkarni serves as the Global Head of the Integrated Product Development Organization (“IPDO”). With more than 28 years of experience in the pharmaceutical industry, he specializes in Product Research and Development. He brings extensive expertise in diverse dosage forms, including oral solids, dermatological formulations, injectables, respiratory treatments, and transdermal systems. Mr. Kulkarni has played a pivotal role in leading technical, regulatory, and project management teams in product development, ensuring regulatory approvals, commercial launches, and subsequent life cycle management activities across various geographies. He is passionate about driving management teams to achieve new business heights. Throughout his career, Mr. Kulkarni has worked with esteemed pharmaceutical companies such as Glenmark, Zydus, Torrent, Sandoz, and Rhone Poulenc. He holds a master’s degree in pharmacy from Bombay College of Pharmacy, Mumbai University, and remains dedicated to leading management teams toward continued success. 

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Mr. M.V. Narasimham serves as the Chief Financial Officer of our company. With a distinguished career spanning over three decades, Mr. Narasimham brings a wealth of expertise and strategic insight to the role. He is a Chartered Accountant by qualification and has held various pivotal positions within our company since joining in 2000. In his previous capacity as Deputy Chief Financial Officer, Mr. Narasimham was responsible for global commercial business finance and global taxation, overseeing critical financial functions that spanned across geographies. His leadership was instrumental in steering the financial operations of our Pharmaceutical Services and Active Ingredients (PSAI) and Global Generics segments from 2006 to 2012. Under his stewardship, these divisions experienced significant growth and operational efficiency. Since 2012, Mr. Narasimham has been at the helm of Corporate Finance, managing crucial areas such as Direct and Indirect Taxation, Consolidation, and Corporate Analytics. His role extended beyond traditional finance, encompassing the comprehensive management of our Global Business finance, including both India and international operations. His deep understanding of complex financial landscapes and his commitment to excellence have consistently driven our company’s financial strategy and performance.

Mr. Krishna Venkatesh is the Global Head of Quality & Pharmacovigilance. Mr. Venkatesh has over 29 years of experience in the pharmaceutical industry and has been with our company for 15 years. His experiences span across areas of product development, process engineering, technology transfer and manufacturing operations. Prior to joining our company, he worked with Barr Pharmaceuticals and Teva in the United States. Mr. Venkatesh holds an MS degree in Pharmaceutics from University of Mississippi and a B. Pharm degree from BITS Pilani. 

Mr. Milan Kalawadia serves as Chief Executive Officer, North America, and is based out of the Princeton, New Jersey office. He is responsible for leading the North America business and serves as a member of the Board of Dr. Reddy’s Laboratories, Inc. Mr. Kalawadia is an accomplished senior executive, having served our company in various positions of increasing responsibility for more than 19 years. Prior to his appointment as CEO, Milan served as Chief Commercial Officer, responsible for the customer-facing and commercialization operations for the three main verticals of the core North America business: retail Rx, hospital/institutional injectable, and private label OTC. Milan’s efforts as Chief Commercial Officer were instrumental in driving our North America business to three consecutive years of growth over the $1 billion revenue threshold. He led the early efforts to develop strategies for our Biosimilars and Self-care & Wellness business units in the United States. He also played a critical role in driving various new growth initiatives, including the acquisition of over-the-counter brands; the development of our e-commerce presence on Amazon; and engaging with alternate channel partners.  Mr. Kalawadia holds a Bachelor of Science degree in Management Science and Information Systems from Rutgers University, School of Business; and a Master of Business Administration degree from Carnegie Mellon University, Tepper School of Business.

6.B. Compensation 

Directors’ compensation 

Full-Time Directors: The compensation of our Chairman and our Co-Chairman and Managing Director (who we refer to as our “full-time directors”) is divided into salary, commission and benefits. They are not eligible to participate in our stock option plans. The Nomination, Governance and Compensation Committee of the Board of Directors initially recommends the compensation for full-time directors. The compensation of the full-time directors is then approved by the Board. Appointment/re-appointment/compensation of the full-time directors is placed for approval of shareholders along with the proposal for their appointment or re-appointment. The salary, commission and benefits of the full-time directors for year ended March 31, 2025 were within the limits approved by our shareholders in line with the provisions of the Indian Companies Act, 2013. 

The Chairman of our Board and our Co-Chairman and Managing Director are each entitled to receive a maximum commission of up to 0.75% of our net profit (as defined under the Indian Companies Act, 2013) for the fiscal year. The Nomination, Governance and Compensation Committee, which is entirely composed of independent directors, recommends the commission for the Chairman of our Board and our Co-Chairman and Managing Director within the limits of 0.75% each, of our net profits (as defined under the Indian Companies Act, 2013) for each fiscal year. The Board, based on the recommendation of the Nomination, Governance and Compensation Committee, approves the commission of the Chairman and Co-Chairman and Managing Director. 

Non-Full Time Directors: In the year ended March 31, 2025, none of our non-full time directors were paid any sum as attendance fees. Non-full time directors are eligible to receive a commission on our net profit (as defined under the Indian Companies Act) for each fiscal year. Our shareholders have approved a maximum commission of up to 1% of the net profits (as defined under the Indian Companies Act, 2013) for each fiscal year for all non-full time directors in a year. The Board determines the entitlement of each of the non-full time directors to commission within the overall limit. The non-full time directors were not granted stock options under the Dr. Reddy’s Employees Stock Option Scheme, 2002, the Dr. Reddy’s Employees ADR Stock Option Scheme, 2007 or the Dr. Reddy’s Employees Stock Option Scheme, 2018 in the year ended March 31, 2025. 

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For the year ended March 31, 2025, the directors were entitled to the following amounts as compensation: 

(Amounts Rs. in millions)

Name of Directors	Commission		Overseas Travel Compensation		Salary		Perquisites		Total
Mr. K. Satish Reddy		90		-		23.74		4.49		118.23
Mr. G.V. Prasad		160		-		23.74		4.60		188.34
Ms. Kalpana Morparia (1)		6.34		-		-		-		6.34
Mr. Leo Puri (2)		16.72		3.42		-		-		20.14
Ms. Shikha Sharma		14.86		-		-		-		14.86
Dr. K.P. Krishnan		15.71		-		-		-		15.71
Ms. Penny Wan (2)		14.43		4.28		-		-		18.71
Mr. Arun M. Kumar (2)		15.72		3.42		-		-		19.14
Dr. Claudio Albrecht (2)		14.86		3.42		-		-		18.28
Dr. Alpna Seth (2)