Dr. Reddy’s Laboratories Ltd

Investors and Analysts Meet, MumbaiMay 21, 2009

2

Safe Harbor Statement

This presentation contains forward-looking statements and information that involve risks, uncertainties and

assumptions. Forward-looking statements are all statements that concern

plans, objectives, goals, strategies, future events or performance and underlying assumptions and other

statements that are other than statements of historical fact, including, but not limited to, those that are identified

by the use of words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,”

“projects” and similar expressions. Risks and uncertainties that could affect us include, without limitation:

General economic and business conditions in India;

The ability to successfully implement our strategy, our research and development efforts, growth and

expansion plans and technological changes;

Changes in the value of the Rupee and other currency changes;

Changes in the Indian and international interest rates;

Allocations of funds by the Government;

Changes in laws and regulations that apply to our customers, suppliers, and the pharmaceutical industry;

Increasing competition in and the conditions of our customers, suppliers and the pharmaceutical industry; and

Changes in political conditions in India.

Should one or more of such risks and uncertainties materialize, or should any underlying assumption prove

incorrect, actual outcomes may vary materially from those indicated in the applicable forward-looking

statements. Any forward-looking statement or information contained in this presentation speaks only as of the

date of the statement.

We are not required to update any such statement or information to either reflect events or circumstances that

occur after the date the statement or information is made or to account for unanticipated events.

3

GV PrasadVice Chairman & Chief Executive Officer

4

Overview

Emerging global company with 25 years of existence

Amongst the largest Indian pharmaceutical companies

• Revenue $1.4 bn FY09 ; CAGR 25% - FY00 to FY09

• International (ex-India) revenue 40% in FY00 to ~ 85% today

Strong portfolio, vertically integrated: businesses, geographies &

products

• Pharmaceutical Services & Active Ingredients

• Global Generics Businesses

• Proprietary Products

Manufacturing infrastructure of 16 facilities

5

Purpose

Providing affordable and innovative medicines for healthier lives

Strategy

Leverage industry-leading science & technology, product offering, and

customer service with execution excellence

6

The Last decadeAchieved scale and global presence

FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09

183 234

338 380 463 447

546

1,510

1,250

1,365 Revenue USD Mn

Built business viability, moved up the value chain

Strengthened capabilities

Established global presence

Scale and inorganic growth

7

Going Forward

Focus on consistent earnings & profitable growth

Build leadership position in Global Generics and Pharmaceutical Services

& Active Ingredients

Create levers of growth for future through Proprietary Products

8

Key Questions

I. What are our aspirations ?

II. How will we deliver consistent profitability ?

III. Why do we believe we will succeed ?

9

I. What are our aspirations ?

Improve depth in key

markets through portfolio

expansion and supply chain

excellence

Create compelling value for

customers by leveraging

IP, technology and cost

leadership

Calibrate investments to

create a self sustainable

model

Global Generics

Pharmaceutical

Services

& Active

Ingredients

Proprietary

Products

Leadership

position

in key markets

Partner of

Choice

Viable

Proprietary

Products

business

10

II. How will we deliver consistent profitability ?

Addressing performance issues in Germany & India

Focus on key markets and ensure delivery of limited competition

opportunities consistently

Calibrate investments in Proprietary Products and other high risk R&D

with overall intent to accelerate path to financial sustainability

11

Proprietary products re-organizationMerger of Aurigene and Discovery research

Why

Existing structure does not fully optimize the infrastructure and resources at our

Discovery Research facility

Increasing demand from Aurigene‟s existing and new partners

Objectives

Utilize the DR infrastructure to generate near-term profitability

Allow proprietary products to partner for Discovery capabilities with Aurigene or

other third parties on an as-needed arm‟s-length basis

Enhance / complement Aurigene‟s capabilities with the addition of turn-key fully-

staffed facility

12

III. Why do we believe we will succeed ?

Focus & Depth

Key markets

Supply chain excellence

Vertical integration with

cost, technology & IP leverage

Product delivery engine

13

Financial Targets FY13

Revenues

$3 bn

RoCE

25%

14

FY10 GuidanceContinuing growth on a high base of FY09

Revenue

RoCE

Growth 10%

(in rupee terms, on a high base of FY09)

Mid to high teens

Second half expected to perform better than first

15

Satish ReddyManaging Director & Chief Operating Officer

16

Priorities for Global Generics

Deepening market presence

Widening the scope of portfolio offering

Improving cash cycle

Supply chain excellence

Addressing the need for infrastructure / capacity increase

17

India

Last two years: Lagged industry growth

Inadequate portfolio coverage

Limited impact of new product introductions

Northern & Eastern regions continue to lag our peers

Recent change to replenishment based system

FY05 FY06 FY07 FY08 FY09

436 598

697 806 848

Revenue [Rs Crs]

18

What are our strengths ?

Ability to build & sustain Mega Brands

• 7 brands among Top 300 brands

• Omez achieves sales of Rs 100 crs per annum

Strong equity with GPs / CPs

• 55 – 70% of our Top 10 molecules are prescribed by GPs/CPs

• 16% of GPs / CPs prescribe more than 4 of our products per

prescription

Ability to establish new brands despite late launches in the

market

• Leon (38 5th rank), Niltan (33 7th rank), Z&D (13 3rd

rank), Pecef (47 11th rank), Telsartan

Emerging leadership presence in niche areas

• Dental, oncology & dermatology

19

Therapy MS - Mar 09 Rank

Gastrointestinal 4.7% 2

Cardiovascular 4.0% 12

Pain / Analgesics 4.1% 6

Anti-infective 0.9% 25

Anti-diabetic 2.4% 14

Vitamins / Minerals / Nutrients 1.6% 18

Dermatology 1.9% 11

Stomatologicals 17.1% 2

Respiratory 1.1% 21

Urology 4.9% 8

Gynaecology 0.7% 34

Neurology / CNS 0.2% 48

Therapy Rankings in India

20

India: Strategy

Improving portfolio coverage

• Launch biosimilars and Differentiated products

• Address the portfolio gap with a combination of in-house &

licensed-in products especially in CV and Diabetes

Increasing market share

• Improve execution and coverage in Northern & Eastern India

• Increase overlap of doctors covered by specialist MRs

• Scale up presence in rural

Delivering supply chain excellence

• Improve availability

21

Russia

Portfolio

• 22 brands 12 brands in Top 3

o Omez, Nise, Ketorol & Ciprolet Rank 1

• OTC Segment 11% of total sales

Customer

• Top 4 Distributors > 80% of revenues

• Operations within strict credit limits

Market Attractiveness

• High growth potential & attractive margins

• 80% of products vertically integrated

22

Russia: Sales growth

FY05 FY06 FY07 FY08 FY09

48 60

79 101

125

Revenue [USD Mn]

Market Rank

• Pharma16th (improvement from 22nd in 2005)

• Generics 7th

Omez, Nise & Keterol > 50% market share

Above nos are at average USD – INR rates

23

Russia: Top 10 brands contribute to 79%

# Brand Molecule OTC/RX2006 2007 2008 Rank in INN

Value ( USD mn) 2006 2008

1 OMEZ OMEPRAZOLE RX 16.4 21.1 25.7 1 1

2 NISE NIMESULIDE RX 11.6 18.0 24.1 1 1

3 KETOROL KETOROLAC RX 11.9 17.8 22.3 1 1

4 CIPROLET CIPROFLOXACIN RX 12.4 14.9 15.5 1 1

5 CETRINE CETIRIZINE OTC 3.2 4.7 7.1 2 2

6 ENAM ENALAPRIL RX 4.9 5.6 5.8 4 4

7 EXIFINE TERBINAFINE OTC 2.8 3.6 4.9 5 3

8 BION 3 ~ - 0.3 2.0 3.9 7 6

9 NISE GEL NIMESULIDE OTC 0.3 1.2 2.1 12 7

10 MYCOFLUCAN FLUCONAZOLE OTC 1.0 1.2 1.6 7 6

11 NORMASE LACTULOSE OTC 0.2 0.6 1.5 2 2

Top 4 brands at No. 1 in their respective INNs

Rank

increase

24

Russia: Strategy

Coverage

• Improve market share in Moscow & St Petersburg

• Expand hospital coverage

Portfolio

• Focus on cardiovascular & oncology

• Product introductions in all major molecules (INN)

• Expansion in OTC segment

Delivering supply chain excellence

• Improve availability

25

Presence in other major markets

25

MarketGeneric

Market Size

Nature

of Market

Dr. Reddy’s

RevenuesMargins

Our Ability

to Compete

UK $4 bn INN ~ $40 mn

CIS $4 bn Branded ~ $40 mn

Venezuela $2 bn Branded ~ $12 mn

Romania $1 bn Branded ~ $12 mn

26

All ‘emerging’ markets expected to show

significant growth in the next decade

Source : IMS

Dr. Reddy’sPresence

Participate

through API

Building

presence

Achieved

significant

presence

27

Amit PatelHead - North America Generics

28

US Generics: Snapshot

Marketed Portfolio ~ 50 products

• Critical mass established with over $400 million in FY09

• 20 products Top 3 position,15 products better than fair share of market

• 3/4th of portfolio vertically integrated API

Product Pipeline

• 140 ANDAs filed to date 68 pending approvals [38 P-IVs and 18 FTFs]

• Continue to build core strength in solid oral dose

• Early activity in injectable, cytotoxic, liquids, etc.

• 3/4th of pipeline vertically integrated API

Capabilities

• Supply chain excellence

• FDA approved manufacturing facilities in India and Shreveport, USA

• Channel expansion activities in private label OTC and government sectors

• Key partnerships in place for product development, packaging and logistics

0

150

300

450

Teva/Barr Mylan Sandoz Watson Mallinckrodt Apotex Corp Qualitest Greenstone Actavis US Lupin Dr. Reddy's Par Ranbaxy KV Lannett

23.1% 12.5% 7.8% 7.7% 3.9% 3.8% 3.6% 3.4% 3.0% 2.5%Mkt.Share

TRxsmn

2.1% 2.1% 2.1% 1.9% 1.6%

29

Top US generics companies

Tier I Tier II

Source : IMS Health, National Prescription Audit, Dec 2008

Currently ranked 11th, intend to be amongst Top 5

30

Leading player in Tier II FY13

„Company of choice‟ for customers and partners

I. Better than fair market share

II. „Leading‟ development pipeline and wide coverage of patent expiries

o comprehensive solid oral market coverage

o injectable, cytotoxic, liquids & biosimilars pipeline

III. Strategic deals

IV. Growing annuity of upsides

Service levels and supply chain excellence

First to launch and last to exit

31

I. Better than fair market share – customers

Major Wholesalers

Other Retailers, Pharmacy Benefit Managers, Mail, etc.

National Retail Chains

HD Smith, Anda, etc.

Duane Reade, Kaiser, Kinray, Kroger, Omnicare, SuperValue, Others

32

I. Better than fair market share – products

Source : IMS Health, Mar 2009

0%

10%

20%

30%

40%

50%

60%

70%

80%

Dec 06 Mar 07 Jun 07 Sep 07 Dec 07 Mar 08 Jun 08 Sep 08 Dec 08 Mar 09

ONDANSETRON (Dec 06)

DR REDDYS MYLAN NOVARTIS GLENMARK

GSK SUN TEVA DAIICHI

ACTAVIS AUROBINDO HIKMA APOTEX

PERRIGO

0%

10%

20%

30%

40%

50%

Jun 06 Sep 06 Dec 06 Mar 07 Jun 07 Sep 07 Dec 07 Mar 08 Jun 08 Sep 08 Dec 08 Mar 09

FEXOFENADINE (Jun 06)

DR REDDYS PRASCO TEVA MYLAN SANOFI

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Jun 06 Sep 06 Dec 06 Mar 07 Jun 07 Sep 07 Dec 07 Mar 08 Jun 08 Sep 08 Dec 08 Mar 09

TEVA LUPIN DR REDDYS

AUROBINDO ZYDUS CADILA DAIICHI

COBALT MYLAN MERCK

COVIDIEN NOVARTIS

SIMVASTATIN (Jun 06)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Sep 08 Dec 08 Mar 09

SUMATRIPTAN (Dec 08)

DR REDDYS GSK TEVA DAIICHI

33

$0

$5

$10

$15

$20

$25

$30

$35

2007 2008 2009 2010 2011 2012 2013

$0

$5

$10

$15

$20

$25

$30

$35

2007 2008 2009 2010 2011 2012 2013

II. Leading development pipeline coverage of expires

Brand expirations (universe)

covered by Dr. Reddy’s PipelineBrand expirations (addressable market)

covered by Dr. Reddy’s Pipeline

(in bn) (in bn)

Dr. Reddy’s coverage Dr. Reddy’s coverage

0 50 100 150 200

Par

Watson

Dr. Reddy's

Ranbaxy

Sun

Mylan

Sandoz

Teva - Barr

0 50 100 150

Par

Sun

Ranbaxy

Mylan

Dr. Reddy's

Watson

Sandoz

Teva - Barr

34

II. Leading development pipeline comparison to peers

by Pending ANDAs by Para IVs

0 50 100

Watson

Par

Sun

Dr. Reddy's

Ranbaxy

Sandoz

Mylan

Teva - Barr

by FTFs

35

III. Strategic deals

• Alchemia

• BioPharm

• Indicus

• Invagen

• Others

Pipeline Development

• Desloratadine Schering / Sepracor

• Finasteride 1mg Merck

• Rivastigmine Novartis

• Sumatriptan GSK (via settlement)

Para IV Settlements

• Finasteride 5mg Merck

• Simvastatin Merck

• Sumatriptan GSK (via settlement)

Authorized Generic Deals

36

Para IV – Assured 180 days exclusivity FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

Fluoxetine (FY02)

Ondansetron X

Product A X

Product B X

Product C X

Product D X

Product E X

Para IV – Settlement / Go-Early FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

Sumatriptan X

Rivastigmine X

Desloratadine ODT X

Desloratadine + Pseudoephedrine X

Finasteride 1 mg X

Para IV – Summary Judgment FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

Omeprazole Mg OTC X

Para IV – At Risk Launch FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

Fexofenadine X

IV. Growing annuity of upsides

37

Difficult/Limited Source Possibilities FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

Divalproex Sprinkles X

Fondaparinux ?

Product M ?

Para IV – Possible Launches FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

Product F ?

Product G ?

Product H ?

Product I ?

Product J ?

Product K ?

Product L ?

IV. Growing annuity of upsides

38

Michael EwersHead - betapharm

39

Germany Tough play yet good potential

Generic Market Size ~ $ 9 bn ; Among the largest generic market

globally

SHIs majority expected to move to the tender route

Model High volume, low margins and sales growth to be driven by

volumes as well as new launches

40

Market Dynamics

INN - Generic segment approx € 4.7 bn

Non protected Branded business approx € 3 bn

“Substitutable Generic Market” € 7.7 bn

New launches up to 2012 will contribute € 2.2 bn incremental sales

SHIs will strengthen their position via increased tender activity which is

Govt supported

SHIs likely to move towards “managed care” to reduce overall “therapy

costs”

Wholesaler/pharmacies need to align with the new business model

Physicians will align with SHIs for “managed care”

Customer Dynamics

41

Portfolio Coverage

78%73%73%

65%64%57%

61%54%

62%

53%

61%

49%43%

30%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

top 100 in % top 200 in %

Competitor AnalysisPortfolio coverage of Top 100 + Top 200 German molecules

Hexal

Ratio

Stada

Aliud

Beta

Merck dura

Teva

• Competitive portfolio compared to the market leaders

• Portfolio coverage out of Top 100 molecules in Germany 62%, Portfolio coverage of Top 200

molecules in Germany 53%

42

Pipeline

0

100

200

300

400

500

600

700

2010 2011 2012

Patent expiries in Germany

(Values in € Mn)

Dr. Reddy’s coverage

92%95%

88%

43

Addressing new reality of the market and

restructuring cost bases

Continuing optimization of sales force

[Mar-06 = 250, Mar-08 = 160, Sep-08 = 120, Sep-09 = 60]

Transfer of manufacturing and select functions to India

Optimization of operating expenses

44

Game Plan

New product launchesOptimizing vertical

integration Adopting lean &

flexible cost structures

Near Term

Sustaining current levels of sales &

profitability

Increase cost effectiveness

Maximize new product launches

Long Term

Expand market share as players

consolidate

Focus on absolute profitability

Superior execution model & higher

pharmacy shelf space

45

Abhijit Mukherjee

Head - Pharmaceutical Services & Active Ingredients

Aspiration to be a robust and profitable

business on a global scale

Chemistry

Engineering & Scale-up

Intellectual Property

Supply Chain Management

Infrastructure (Plants)

Product Portfolio

CUSTOMERS

Innovators Generics

API: 3 Key Forces at work

API

business

Price Erosion

Cost Management New Product launches

Sustainable margins driven by continuous cost management & new

product launches which more than offset price erosion

• Ongoing price decrease

• Dictated by both Market and Customers

• New products to be developed and launched constantly

• Cost Improvement Programs

• Process Efficiency improvements

Delivery to Customers

Regulatory Support

IP Driven Product Dvpmt

Supply Chain Mgmt

Global Access to Customers

Capacity Mgmt

Compliant Mfg

API: Managing complexity at scale

148

83

12

US DMF

EU DMF

Japan DMF

Filings as of April 30, 2009

Dr. Reddy’s has coverage of 60 – 80% of the value of products going

off patent in US over next few years

Product Region Market Share

Finasteride US 64%

Gemcitabine EU 42%

Ramipril EU 32%

Naproxen Global 40%

Pipeline & Performance validates our strategy

Top 2 leadership position globally in generic APIs

The Custom Pharmaceutical Services model has

evolved over the years

Custom Chemical Services - 2003

Big Pharma Progress with pipeline to

manufacturing

Pipeline DvptServices

API manufacturing

Big Pharma, Mid Sized Pharma , Emerging Pharma, Biotech

Pipeline dvpt

services – API &

dosage

API, Dosage

mfgNiche

technology

capabilities

Mature API,

intermediates

Misc mfg,

intermediates

Wide Net Approach

Custom Pharmaceutical Services - 2008

1. Product service

• Leverage strengths as a generic company to provide

services

2. Technology leveraged manufacturing services

• Chiral technology

• Steroids, peptides & prostaglandins

• General chemistry expertise

• Scale up and engineering skills

CPS two-pronged strategy

52

Cartikeya Reddy

Head - Biologics

53

What will differentiate Dr. Reddy’s in Biosimilars ?

First Indian company to fully develop a biosimilar in-house

First to systematically tackle complex mammalian cell cultured derived

products Targeting Capabilities

First company to develop and launch a biosimilar monoclonal antibody

‘Reditux’

Pipeline to drive sustained product launches Four products in late stage

development

Investments in capacity expansion Large scale mammalian cell culture

plant

Cell LineDevelopment

ProcessDevpt

ToxStudy

ClinicalMfg

ClinicalStudy

54

Pipeline

Industry-leading portfolio of 9 products dominantly based on

mammalian cell culture

Global brand sales of pipeline > $30 bn

Product AExp Launch

FY10

Product BExp Launch

FY10

Product CExp Launch

FY11

Product DExp Launch

FY12

Product E

Product F

Product G

55

Market Strategy

Emerging Markets

Aggressive alliancing efforts outside

core Dr. Reddy‟s territories to

leverage sole generic position.

Variable approval pathways and

patent situation means that potential

of pipeline will begin to be evident

from FY12.

Vertically integrated, India-based

development and manufacturing

create a high margin portfolio for Dr.

Reddy‟s.

Regulated Markets

Regulatory clarity is emerging

though market dynamics will take

some time to mature.

Emerging markets strategy will

create „clinically proven‟ full width

portfolio of biosimilar products.

Retain strategic flexibility to alliance

for detailing-driven market

dynamics; prepare for substitution-

driven price competition (de-facto).

56

Raghav Chari

Proprietary Products

57

Long Term Vision

Establish a leadership position in at least one of the chosen TAs / specialty

physician audiences

Achieve critical mass in terms of late-stage R&D and new product launches

within our target TAs across both major markets and key current markets

Reach industry leading levels of productivity

58

Near Term Deliverables

Create a critical mass of 3-5 high quality clinical stage programs at any given

time with a specialty orientation

Build a steady state pipeline of 2 quality INDs/year by FY11 across NCEs and

Differentiated Formulations

Generate sufficient deal flow from out-licensing to cover costs and turn pre-

phase II PoC R&D business profitable

File for registration with 1 product per year in India starting FY12

59

Key Development-stage Assets

AssetExploratory

stagePreclinical

testing

GLP tox/IND-enabling studies

Phase I Phase II Phase III

Balaglitazone

DRL-2546 (COPD)

DRL-17822(dyslipidemia)

DRL-21994 (dyslipidemia)

DRL-21995(dyslipidemia)

Dyslipidemia/CV –undisclosed NCE

60

GV PrasadVice Chairman & Chief Executive Officer

61

What are our aspirations ?

Improve depth in key

markets through portfolio

expansion and supply chain

excellence

Create compelling value for

customers by leveraging

IP, technology and cost

leadership

Calibrate investments to

create a self sustainable

model

Global Generics

Pharmaceutical

Services

& Active

Ingredients

Proprietary

Products

Leadership

position

in key markets

Partner of

Choice

Viable

Proprietary

Products

business

62

Financial Targets FY13

Revenues

$3 bn

RoCE

25%

Thank You