​ ​​​​​​ 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, with the objective of developing and supplying high‑quality pharmaceutical products at affordable prices. Our equity shares have been listed on the BSE Limited and the National Stock Exchange of India Limited since December 6, 1985. Our American Depositary Shares have been listed on the New York Stock Exchange since April 11, 2001 and have a secondary listing on NSE International Exchange (NSE IFSC) in GIFT City, India, since 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. Our registered agent in the United States is Dr. Reddy’s Laboratories, Inc., 600 College Road East, Princeton, New Jersey 08540. Our corporate website is https://www.drreddys.com . Over the last few years, we have strengthened our core generics business while expanding into consumer healthcare and biosimilars through a mix of internal development, partnerships and selective acquisitions. We have continued to invest in scientific, manufacturing and regulatory capabilities to support a portfolio that includes generics, biosimilars, branded formulations, over‑the‑counter products and consumer healthcare. We have focused on strengthening its core business while selectively expanding into adjacent growth platforms. The global generics business has remained the largest contributor to revenues, with increased focus on complex products, injectables and specialty molecules, particularly in regulated markets such as the United States and Europe. At the same time, we have expanded our presence in biosimilars, primarily through development and commercialization partnerships. 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.co m, 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: · We completed the acquisition of Haleon UK Enterprises Limited’s global nicotine replacement therapy (“NRT”) business outside the United States through the purchase of Northstar Switzerland SARL in September 2024. The acquired portfolio includes established consumer healthcare brands such as Nicotinell, Nicabate and related products across multiple geographies. This transaction represents a key step in building a global consumer healthcare and OTC platform, with integration planned in a phased manner. Refer to Note 35.B to the Consolidated Financial Statements for additional details on this acquisition. · We entered into an agreement with Nestlé Health Science India to commercialize nutritional and wellness products in India. This partnership provides access to complementary capabilities and supports our strategy to expand in consumer‑oriented health and nutrition categories. Refer to Note 35.A to the Consolidated Financial Statements for additional details on this partnership. · We have expanded our participation in biosimilars primarily through development and commercialization partnerships, , such as our 2024 partnership with Alvotech for the commercialization of a biosimilar candidate to Prolia® and Xgeva® (denosumab) in the United States and Europe, and our 2025 partnership with Shanghai Henlius Biotech, Inc. for the commercialization of the biosimilar product, ‘daratumumab biosimilar HLX15' in the United States and Europe. This approach allows us to enter complex and higher‑value categories while managing development risk and capital intensity. Principal capital expenditures We made capital expenditures of Rs. 36,715 million, Rs. 33,154 million and Rs. 26,350 million during the years ended March 31, 2026, 2025 and 2024, respectively. These expenditures are intended primarily for manufacturing facilities, research and development facilities and other fixed assets. As of March 31, 2026, we had contractual capital commitments of Rs. 9,716 million, primarily relating to capacity creation in support of our business strategy which is expected to be incurred over the next twelve months . We expect to fund these commitments and our planned capital expenditures through internal operating cash flows and existing investments. Actual capital expenditures may vary based on business conditions and execution timelines. 23 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 outside of the United States of consumer brands in the Nicotine Replacement Therapy acquired from Haleon UK Enterprises Limited (the “NRT Business”). 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 discovery stage biotechnology company developing novel and 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 anchored in our purpose of “Good Health Can’t Wait” which guides our efforts to accelerate access to affordable and innovative medicines. Rising health care costs globally have placed many medicines beyond the reach of millions of patients. As a global generic pharmaceutical company, we consider it our responsibility to help address this challenge by providing cost‑effective alternatives to high‑priced medicines and enabling patients worldwide to better manage their health outcomes. Our Promises and Core Tenets: We deliver on our purpose through the following commitments to 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. Our Product and Service Offerings Global Generics : We seek to improve access to affordable medicines through a broad portfolio of small‑ and large‑molecule generics, complemented by consumer healthcare and selected innovative products. · Branded and Unbranded Generics: We develop, manufacture, and market high‑quality generic medicines at affordable prices, with a focus on credible brands, first‑to‑market launches, and differentiated offerings. Our vertically integrated operations support quality and supply reliability, supplemented by strategic partnerships in markets where we do not have direct commercial presence. · Biosimilars: We aim to expand global access to biosimilars through our integrated capabilities across development, manufacturing, and commercialization, supported by strategic collaborations. Following launches in India and other emerging markets, we have expanded into highly regulated markets. 24 · Consumer Healthcare: We offer differentiated, science‑based and clinically supported consumer healthcare products to improve health outcomes and quality of life. · Innovation: We focus on unserved, underserved, or unarticulated patient needs by leveraging our capabilities across new chemical entities (“NCEs”)/ new biological entities (“NBEs”) as well as cell and gene therapies (“CGT”). Pharmaceutical Services and Active Ingredients (“PSAI”) : Our PSAI segment includes our active pharmaceutical ingredients (“API”) business and our pharmaceutical services business. Through both these businesses, we aim to offer technologically advanced products and integrated customized services, for internal consumption as well as external customers. · API: Our API portfolio comprises complex, differentiated, high‑quality and cost‑competitive products backed by strong chemistry and synthesis capabilities. · Pharmaceutical Services: We provide niche service capabilities, technology platforms, and competitive cost structures to innovator and biotechnology companies. Others : This segment includes other businesses, including our wholly owned subsidiary Aurigene Oncology Limited (“AOL”) and our Proprietary Products business. AOL focuses on discovery and early‑stage clinical development of novel therapies for cancer and inflammatory diseases. The Proprietary Products business commercializes differentiated formulations through partnerships. We continue to strengthen our core generics businesses while building future growth drivers to address unmet patient needs across the illness‑to‑wellness spectrum. Operating priorities To drive value across operations, we continue to focus on: · Safety: We integrate safety practices across our operations and are committed to maintaining safe work environments through ongoing improvements in infrastructure, work practices, and behaviors. · Quality: We maintain robust quality systems across our development and manufacturing operations and embed Quality by Design principles to ensure the highest standards of safety, quality, and efficacy while minimizing process risks. · Productivity: We pursue continuous improvement to enhance efficiency, cost competitiveness, and responsiveness, supported by a culture of innovation and disciplined waste elimination. · Leadership Development: We build leadership capability through structured development programs, maintain a strong culture of integrity and transparency, and leverage our global expertise to create value for stakeholders. Pillars of our growth Strategy Our growth strategy is designed to expand our reach and impact and is built on three pillars: · Market leadership in our chosen spaces: We seek to increase first‑to‑market launches, develop complex and differentiated products, enhance access to innovative offerings, and deepen market presence through new go‑to‑market channels. Our value proposition is supported by cost leadership, backward integration, reliable customer service, and a strong compliance track record. · Operational excellence and continuous improvement: We aim to continuously optimize productivity and resource utilization to accelerate product launches, improve cost competitiveness, and respond more effectively to customer needs. · Patient focused innovation: We strive to build a portfolio of innovative and differentiated products in selected areas to address unmet patient needs and to while strengthening our consumer health focus to broaden the continuum from treatment to prevention and overall well‑being. These pillars are underpinned by our sustainability agenda, focused on environmental stewardship, access and affordability, social inclusion, and strengthening stakeholder trust. 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. 25 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, 2026, 2025 and 2024, respectively: For the year ended March 31, Segment 2026 2025 2024 (Rs. in million, U.S.$ in million) Global Generics U.S.$ 3,189 Rs. 299,033 89 % Rs. 289,552 89 % Rs. 245,453 88 % PSAI 368 34,773 10 % 33,846 10 % 29,801 11 % Others 23 2,127 1 % 2,137 1 % 3,910 1 % Total Revenue U.S.$ 3,580 Rs. 335,933 100 % Rs. 325,535 100 % Rs. 279,164 100 % Revenues by country and by therapeutic area for the years ended March 31, 2026, 2025 and 2024 are discussed in Note 5 (“Segment Reporting”) to our consolidated financial statements. Global Generics Segment Revenues from our Global Generics segment were Rs.299,033 million for the year ended March 31, 2026, an increase of 3% as compared to Rs.289,552 million for the year ended March 31, 2025. The increase was in three of four business geographies of this segment: Europe (which also includes the “NRT Business”), “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, Vietnam, China, and Colombia), and India. The foregoing were partially offset by a decline in revenues from North America (the United States and Canada). 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. 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, 2026, India accounted for 21% 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, vitamins & minerals and pain management. As of March 31, 2026, we had a total of 530 branded products in India. Our top ten branded products together accounted for 22% of our revenues in India in the year ended March 31, 2026. 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, 2026, our secondary sales in India grew by 12.1%. In comparison, the Indian pharmaceutical market experienced growth of 9.9% 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 2026, ranked us 9 th 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 ~10,000 sales representatives (which include representatives engaged by us on a contract basis through a service provider) and frontline 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 6,500 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. 26 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 10 th largest pharmaceutical company in India, with a market share of 3.2%, according to IQVIA in its moving annual total report for the twelve-month period ended March 31, 2026. 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 T he m a nuf a c t ur i ng a nd m a r k e t i ng of drug s , d rug pro d u c t s a nd c o s m e t i c s i n Ind i a i s go v e rn e d by m a n y s t a t u t e s , r e gu l a t i ons a nd gu i d e l i n e s , i n c l u d i ng but n ot l i m i t e d t o t he fo l l o w i ng: · 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. 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. For example, 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. 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. T his has reduced new product introductions by Indian pharmaceutical companies engaged in generic formulations 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. 27 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 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). Subsequent reviews resulted in a ban of 328 fixed dose combination drugs in September 2018. The impact of this ban was negligible on our revenues. On February 27, 2019, the NPPA 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 had no material financial impact on our revenues. In November 2022, the Government of India issued the Drug (Prices Control) Amendment Order 2013, revising ceiling prices which reduced the maximum retail prices for various formulations listed in the DPCO. From time to time (most recently on March 31, 2026), 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 12% of our Global Generics segment’s revenues in the year ended March 31, 2026. IQVIA ranked us 14 th in retail sales in Russia, with a market share of 1.8% for the twelve months ended March 31, 2026. According to IQVIA, as per its moving annual total report for the twelve months ended March 31, 2026, our sales value increased by 11.1% and our sales volume increased by 4.4% for such period, as compared to the Russian pharmaceutical market value growth of 13.1% for such period. The Russian pharmaceutical market’s volume also increased by 0.7% 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 48.3% of our retail sales in Russia for the 12 months ended March 31, 2026, 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 35 th , 58 th , 145 h , 72 rd and 106 th best-selling formulation brands, respectively, in the Russian market by IQVIA in its retail segment report for the moving twelve months ended March 31, 2026. (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 34% during the year ended March 31, 2026 as compared to the year ended March 31, 2025. In Russian rouble absolute currency terms (i.e., Russian roubles without taking into account the effect of currency exchange rates), such revenues in creased by 15 % for the year ended March 31, 2026 as compared to the year ended March 31, 202 5 . This revenue increase was supported by higher volumes (4%), new products (4%) and higher prices (7%). All significantly promoted brands (excluding certain products with production delay issues) showed double-digit growth. 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 937. 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. 28 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, 2026, revenues from these countries accounted for 2% 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. Sales, marketing and distribution network Our marketing and promotion efforts in our Russia market is driven by a team of 583 medical representatives and 71 managers to detail our products to doctors in 70 cities in Russia. Our commercial team consists of 17 key account managers and is focused on establishing a network of relationships with key pharmacy chains. Our Russia hospital division has 19 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 and Zao Ranbaxy (an affiliate of Sun Pharmaceutical Industries Limited). Government regulations Russia Government Policies on Healthcare and Pharmaceutical Industry Development The Russian healthcare and pharmaceutical sectors are subject to extensive government regulation, including significant state involvement through industrial policy, price controls and market access restrictions. The Russian government has implemented policies and programs aimed at supporting the domestic pharmaceutical industry and reducing reliance on imported medicines. These initiatives emphasize localization of production, expansion of domestic manufacturing capacity, and increased availability of medicines produced within the Russian Federation. Current policy priorities continue to support local pharmaceutical manufacturing, including development of full-cycle production of strategically important medicines and expansion of export capabilities. Broader industrial development programs further promote technological advancement, financial support measures for domestic manufacturers, and modernization of infrastructure, including laboratory and research facilities. In addition, national healthcare programs establish priorities for improving access to medical care, increasing life expectancy, and expanding preventive healthcare measures. In this context, the government has adopted strategies to strengthen certain therapeutic areas, including immunization, through measures such as localization of vaccine production, expansion of vaccination coverage, and enhancement of pharmacovigilance systems. These regulatory frameworks form the overall operating environment for pharmaceutical companies in Russia and may influence strategic decisions related to manufacturing footprint, supply chain structure, and participation in the healthcare system. 29 State price regulation of Medicines Prices for certain drugs categorized as “essential”, based on a list of “Essential and Vital Drugs” (also known as the “ZhNVLP”) are subject to state regulation. A reference pricing regime has been in force since 2010, under which maximum ex ‑ factory prices must be registered with, and approved by, the federal authorities. Federal Law No. 134 ‑ FZ requires registration and periodic re ‑ registration of maximum prices for reference medicines, with automatic price reductions applied to generics and biosimilars through established coefficients. In April 2025, the Russian Government adopted Resolution No. 462, introducing procedural updates including electronic submissions and revised administrative timelines. The resolution will apply from September 1, 2025 through September 1, 2031. The ZhNVLP list is updated annually by the Government and plays a critical role in price regulation, reimbursement eligibility and access to public procurement. Restrictions on foreign medicines and Public Procurement Russian public procurement policy favors domestically manufactured medicines. Measures supporting import substitution have been implemented since 2015, including restrictions on access of foreign medicines to state tenders where sufficient local alternatives exist. Since January 1, 2025, a strengthened procurement rule (“second excessive participant” rule) applies under Government Decree No. 1875. Under this rule, if at least one Russian ‑ origin product is admitted to a procurement tender, bids offering foreign ‑ origin products are excluded regardless of price or technical characteristics. These measures may limit market access for foreign manufacturers and adversely affect competitive dynamics. Interactions with healthcare professionals Interactions between pharmaceutical companies and healthcare professionals are strictly regulated under Federal Law No. 323 ‑ FZ and Federal Law No. 61 ‑ FZ. The regulatory framework prohibits, among other things, improper inducements, gifts, promotional payments, misleading information and individual promotional contacts outside permitted formats. Healthcare professionals are required to disclose conflicts of interest, and pharmaceutical companies must comply with transparency and reporting obligations related to sponsored scientific and educational events. Violations may result in administrative or other liability, including under anti ‑ corruption provisions. Prescribing of medicines is generally required to be performed by international non ‑ proprietary name (“INN”), subject to limited exceptions. Eurasian Economic Union (EAEU) Regulation Russia is a member of the Eurasian Economic Union (“EAEU”), which has established a common regulatory framework for the circulation of medicinal products. Since 2021, registration of new medicinal products in Russia must generally be conducted under EAEU procedures. National registrations remain valid until expiration but no later than December 31, 2025. Legislative amendments adopted in 2024 further harmonized Russian law with EAEU rules, including data exclusivity protection for reference products and restrictions on the timing of generic and biosimilar applications. Serialization and Product Traceability Russia operates a mandatory track ‑ and ‑ trace system for medicines (“MDLP” or “Chestny ZNAK”), requiring serialization and reporting across the supply chain. Mandatory labeling applies to prescription and over ‑ the ‑ counter medicines, as well as to selected categories of food supplements (from October 2023) and cosmetics (from October 2025). Non ‑ compliance may result in administrative sanctions and restrictions on circulation. 30 Antimonopoly compliance in Russia Russian antimonopoly law provides for voluntary internal antimonopoly compliance systems. Adoption and proper implementation of such systems may serve as a mitigating factor in enforcement proceedings. While voluntary, antimonopoly compliance has become an important component of regulatory risk management for companies operating in Russia. E-Commerce for Medical Products Online retail sale of over ‑ the ‑ counter medicines is permitted in Russia. Remote sale of prescription medicines is allowed only in limited circumstances and subject to regulatory approvals. E ‑ commerce activities remain subject to licensing, pharmacovigilance and reporting requirements, and the regulatory framework continues to evolve. Personal data protection Businesses operating in Russia or targeting Russian individuals are subject to Russian data protection laws, including Federal Law No. 152-FZ “On Personal Data,” which regulates the collection, processing, storage, and transfer of personal data. Recent legislative amendments and regulatory developments have significantly expanded and tightened these requirements. In particular, amendments effective in 2025 strengthen existing data localization obligations by requiring that the collection and initial recording of personal data of individuals located in Russia be conducted using databases located within Russia. These requirements may effectively prohibit the use of foreign-based infrastructure for the primary collection of such data and extend to third-party service providers and data processors engaged by the data controllers. As a result, the businesses may be required to restructure its information technology systems, localize data storage, or engage local service providers. In addition, updated legal requirements impose more stringent conditions on obtaining consent from data subjects, including requirements that consent be presented separately from other contractual documentation and include detailed, specific disclosures. Furthermore, recent legal developments require organizations, in certain circumstances, to provide anonymized datasets to Russian state information systems upon request. Russian authorities have also increased administrative penalties for violations of personal data laws, and enforcement activity has intensified in recent periods. Non-compliance could result in substantial fines, restrictions on our ability to process personal data, blocking of our online services, or other regulatory measures. 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, 2026, North America (the United States and Canada) accounted for 38% 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. 31 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, 2026, we filed 15 new Abbreviated New Drug Applications (“ANDAs”) with the U.S. FDA. As of March 31, 2026, 77 generic filings were pending approval from the U.S. FDA. These are comprised of 75 ANDAs and 2 New Drug Applications (“NDAs”) filed under Section 505(b)(2) of the U.S. Federal Food, Drug, and Cosmetic Act. Of the 75 ANDAs, 43 are Paragraph IV applications, and we believe that 22 of these have the ‘First to File’ status. As of March 31, 2026, we have three ongoing Biologics License Applications (“BLA”) pending approval with the U.S. FDA for our proposed biosimilar-Abatacept (for intravenous presentation), Rituximab and Denosumab. For Rituximab, all clinical trials have been successfully completed, and our BLA is under active review with the U.S. FDA. We received marketing authorizations for our Rituximab product (DRL_RI) in Health Canada as of February 2026. In addition, the product (DRL_RI) was approved in the European Union in September 2024, the United Kingdom since 2024, and in Switzerland as of January 2026. We received a “complete response” from the U.S. FDA in December 2025 for our Denosumab BLA. Resubmission is targeted during 2026. The Denosumab Marketing Authorization Application (MAA) was approved by the European Medicines Agency (“EMA”) in November 2025 and subsequently by the United Kingdom authority in December 2025. We also have active pre-IND applications for three other early-stage molecules. Our Canada business generated revenues of Rs.3,035 million during the year ended March 31, 2026. This business includes revenues from certain profit sharing arrangements with distributors who market certain of our generic products. As of March 31, 2026 we have filed a cumulative total of six New Drug Submissions (“NDS”), one Drug Identification Number (“DIN-A”) Application, 73 Abbreviated New Drug Submissions (“ANDS”) and one Class III Natural Health Product (NHP) in Canada, out of which 48 were approved, three tentatively approved (with Intellectual Property Hold status), 13 were withdrawn or cancelled and 16 are pending approval. This portfolio includes the approval of the first biosimilar submission for Rituximab for Injection, granted on February 13, 2026, marking a significant milestone for our Canadian business. Additionally, Dr. Reddy’s Canada has expanded its presence in the Natural Health Products landscape, adding 22 in-licensed Natural Health Products to its portfolio in the year ended March 31, 2026. We are the first company to receive marketing authorization for our generic Semaglutide Injection in Canada covering the strengths of 2 mg / pen (1.34 mg / mL) and 4 mg / pen (1.34 mg / mL). The product is launched in May 2026. 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 to retail chains, wholesalers and private labels, as well as sales of oral solids to other categories of customers. The product portfolio includes a wide range of therapeutic areas. 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. 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 26 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, 2026. During the year ended March 31, 2026, we continued to strengthen our presence in the Self‑Care and Wellness space, with a focus on building and scaling our consumer health brands through targeted innovation initiatives. A key priority was accelerating the growth of our e‑commerce–only brand, HealthCareAisle®, driven by share expansion in core products and the launch of multiple new offerings on the Amazon marketplace. We also continued to revive and invest in our established brands, Doan’s® and Habitrol®, with a focus on channel expansion and product innovation. For Habitrol®, we expanded retail distribution of Habitrol Patch products to all Walmart stores nationwide in September 2025 and, during the same period, launched Habitrol Gum in select Walmart locations. For Doan’s®, we broadened the portfolio with the introduction of Doan’s 100‑count tablets, now available at multiple retailers, with additional retail expansion planned in the coming months. 32 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, Sun Pharmaceuticals Limited 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. 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 Act (“FD&C 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. 33 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. Section 505(b)(2) of the FD&C Act provides a regulatory pathway to U.S. FDA approval for new or improved formulations or new uses of previously approved drug products. Specifically, Section 505(b)(2) permits the filing of an NDA where at least some of the information required for approval comes from studies not conducted by or for the applicant and for which the applicant has not obtained a right of reference, or use from the person by or for whom the investigations were conducted. The applicant may rely upon the FDA’s prior findings of safety and efficacy for an approved product that acts as the reference listed drug for purposes of a 505(b)(2) NDA. The FDA may also require 505(b)(2) applicants to perform additional studies or measurements to support any changes from the reference listed drug. The FDA may then approve the new product candidate for all or some of the labeled indications for which the referenced product has been approved, as well as for any new indication sought by the 505(b)(2) applicant. The FDA Reauthorization Act of 2017 also established the Competitive Generic Therapy designation to promote competition in markets with limited generic options, offering potential 180-day exclusivity. 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. FDA Safety and Innovation Act and User Fee Programs The U.S. FDA is authorized to collect user fees under a number of laws and subsequent reauthorizations, including among others The Food and Drug Administration Safety and Innovation Act, the Generic Drug User Fee Act, the Biosimilar User Fee Act, the Prescription Drug User Fee Act, and the FDA Reauthorization Act of 2017 (“FDARA”). These fees support the review of generic and biosimilar applications, enhance regulatory efficiency, improve communication between the FDA and industry and help address emerging issues such as complex product development. 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. 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. There have been extensive judicial, Congressional and executive branch challenges to certain aspects of the ACA, as well as efforts and proposals to revise or repeal the law and its application,. For example, on July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was signed into law, which narrowed access to ACA marketplace exchange enrollment and declined to extend the ACA enhanced advanced premium tax credits that expired at the end of 2025, which, among other provisions in the law, are anticipated to reduce the number of Americans with health insurance. The OBBBA also is expected to reduce Medicaid spending and enrollment by implementing work requirements for some beneficiaries, capping state-directed payments, reducing federal funding, and limiting provider taxes used to fund the program. Congress is considering proposed legislation intended to further reduce healthcare costs with alternatives to replace the expired ACA subsidies. 34 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 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)). In October 2025, the U.S. FDA published a major draft guidance impacting filing pathways for biosimilars, in which it highlighted that comparative clinical efficacy studies may no longer be a requirement. FDA’s view is that modern analytical technologies should be able to detect differences between the branded and proposed biosimilar and have more sensitivity than clinical trials. 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 while calling 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. Since July 2019, CMS rules have required 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. The U.S. Department of Health and Human Services and U.S. FDA’s Safe Importation Action Plan and rules finalized in 2020 allow importation of certain lower-cost prescription drugs from Canada, 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. 35 The Inflation Reduction Act and Certain Government Programs The Inflation Reduction Act (“IRA”) of 2022 restructured 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 replaced the Part D coverage gap discount program with a new discounting program. In particular, the U.S. Department of Health and Human Services (“HHS”) was 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. Exemptions from the direct negotiation requirement are available for any 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. The law allows HHS to levy an excise tax and civil monetary penalties against non-compliant manufacturers or those who refuse to negotiate. The IRA also imposes rebate requirements on manufacturers of single-source generics and other drugs covered under Medicare Part B and Part D if the price increases of the drug outpaces inflation. Multisource generics are excluded from Medicare inflation rebate requirements. Additionally, certain low-spend drugs, defined as those with average annual Medicare spending of $100 or less, per beneficiary, are also exempt. 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 our company) 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 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. 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. Staffing at the U.S. FDA was significantly reduced in 2025, 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. Other matters Refer to Note 31 (“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. 36 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, 2026 we have filed a cumulative total of six New Drug Submission (“NDS”), one Drug Identification Number (“DIN-A”) Application, 73 Abbreviated New Drug Submissions (“ANDS”) and one Class III Natural Health Product (NHP) in Canada, out of which 48 were approved, 3 tentatively approved (IP Hold), 14 were withdrawn or cancelled and 16 are pending approval. This portfolio includes the approval of the first biosimilar submission for Rituximab for Injection, granted on February 13, 2026, marking a significant milestone for our Canadian business. Additionally, Dr. Reddy’s Canada has expanded its presence in the Natural Health Products landscape, adding 22 in-licensed Natural Health Products to its portfolio in the year ended March 31, 2026. Prime Minister Mark Carney has positioned regulatory streamlining (“red tape reduction”) as a cornerstone of his economic agenda. In December 2025, Health Canada pre-published the Ministerial Reliance Order (“MRO”) proposing a framework under the Food and Drugs Act that would allow the agency to rely on decisions, assessments, or documents produced by trusted foreign regulatory authorities when reviewing certain drug submissions. The MRO is intended to accelerate access to drugs in Canada, reduce duplicative regulatory work, and strengthen international regulatory collaboration, while maintaining Canadian standards for safety, efficacy, and quality. In addition, on June 10, 2025, Health Canada published a draft update to its guidance, “Information and Submission Requirements for Biosimilar Biologic Drugs,” for public consultation. This new draft represents significant updates to the biosimilar regulatory approval process, shifting toward an analytics‑first, risk‑based model. Under this approach, biosimilarity would mainly be demonstrated through thorough comparative quality and functional assessments, along with pharmacokinetic and immunogenicity data. Routine phase III clinical efficacy trials would generally not be required; instead, clinical efficacy and safety studies would only be needed in rare cases where there is remaining uncertainty that must be scientifically justified. Approval for multiple indications would depend on the overall body of evidence, rather than separate clinical trials for each indication. These changes align Canada’s regulatory framework with evolving EMA and FDA requirements, reducing the development workload without compromising standards for safety, efficacy, or quality. Europe Our sales of generic medicines in Europe for the year ended March 31, 2026 were Rs.55,501 million, which accounted for 19% 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. Consumer healthcare brands in the NRT business During the year ended March 31, 2025, we acquired Haleon UK Enterprises Limited’s global portfolio of consumer healthcare brands outside of the United States, in the Nicotine Replacement Therapy category. We substantially completed the integration of this acquired business, with majority of markets transitioned and local marketing authorizations transferred in our name. We continue to manage this business, including contract manufacturing activities, from Switzerland. (Refer to Note 35.B ( “Business combination - Business transfer agreement with Haleon”) of our consolidated financial statements for further details). Our NRT business generated revenues of Rs. 28,189 million for the year ended March 31, 2026, which accounted for 9% of our total Global Generics segment sales and 51% of the total Europe business sales of our Global Generics segment . The NRT business operates across key developed markets including the United Kingdom, France, Finland, Sweden, Denmark, Australia, Canada, and New Zealand. This business is focused on offering a diversified OTC portfolio of smoking cessation products across multiple formats, including gum, lozenges, mini-lozenges, patches and sprays. The NRT business leverages our strong portfolio of global brands led by Nicotinell, which accounts for approximately 80% of the total sales of our NRT business, alongside other brands such as Nicabate, Thrive and Habitrol. Germany – acquisition of medical Cannabis Business Nimbus Health In February 2022, we acquired Nimbus Health GmbH (“Nimbus Health”), marking our entry into the medical cannabis sector in Germany. 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. 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. Consumer healthcare brands in the NRT business We operate our NRT business primarily through pharmacy and retail channels, with approximately 60% of sales generated through pharmacy channels, complemented by mass market retail and e-commerce. In key markets such as the United Kingdom and Nordic countries, distribution is supported through large retail chains and pharmacy networks, while markets such as Australia, France, and Canada are more focused on pharmacy channels. 37 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. During the year ended March 31, 2025, 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 are also introducing biosimilars across these countries, leveraging on our hospital relationships and entering the retail market with new capabilities established in France and Spain. 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. Competition Germany The German market is highly competitive as a result of a large number of generic companies 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. Consumer healthcare brands in the NRT business The NRT category is relatively concentrated, with key competitors including Kenvue’s Nicorette product and Perrigo’s NiQuitin product, alongside private label offerings. On the basis of NRT product sales, we were the 2nd largest company in the NRT category worldwide (excluding the United States), with a market share of 22% for the twelve-month period ended March 31, 2026, according to Euromonitor, a global market research firm. United Kingdom and other Countries within Europe According to the Medicines UK Association, the United Kingdom is one of the largest markets for generic pharmaceuticals in Europe, with generic penetration of around 85%, and is also one of the most price competitive markets due to a high degree of vertical integration and consolidation of buyers. In our estimate, 50% of the U.K. pharmacies are independent and community pharmacies. In addition, the market has relatively low barriers of entry. The generic market is dominated by global pharmaceutical companies such as Teva, Viatris, Accord, Sandoz and Thornton & Ross (an affiliate of Stada). 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. 38 An abridged application can be filed for obtaining EU marketing authorization for a generic/biosimilar 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. 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, 2026 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. 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. 39 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. 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. 40 Consumer healthcare brands in the NRT business Nicotine Replacement Therapy (“NRT”) products are subject to extensive and evolving regulatory requirements in the countries where we operate. National and regional health authorities oversee these rules to ensure product safety, quality, efficacy, and appropriate consumer use. These are generally regulated as OTC medicines. However classification varies by jurisdiction and in certain markets, NRT products may be subject to alternative regulatory frameworks. Applicable regulations govern product approvals, registrations or marketing authorizations, product formulation and quality standards, labelling and patient information requirements, and conditions of sale and distribution. The marketing and promotion of NRT products are subject to strict regulation, including requirements that all efficacy and safety claims are supported by appropriate scientific evidence. Regulations impose limitations on consumer-facing product claims, advertising content, and engagement with healthcare professionals. Regulatory frameworks in several markets impose restrictions on the distribution and sale of NRT products, including requirements that certain products be dispensed only through pharmacies or under the supervision of healthcare professionals. In certain jurisdictions, NRT products may be included in government-led smoking cessation programs or subject to public health initiatives. Regulatory authorities may influence pricing, reimbursement of eligibility, and procurement mechanisms. NRT products are subject to pharmacovigilance and product safety requirements, including the monitoring and reporting of adverse events. NRT products may expose the Company to product liability claims in the event of alleged safety concerns. The regulatory environment for NRT products continues to evolve, with increasing focus on consumer safety, transparency, and evidence-based claims. Changes in regulatory frameworks or public health policy may affect demand or commercialization of NRT products. “Rest of the Worl d ” 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. 41 Our products Olanzapine, Clopidogrel and Abiraterone together with few other products which we had commercialized in China through a distribution and supply agreement with a Chinese company, were successfully listed in a volume based procurement program, which is a tender-style bidding system for centralized procurement of medicines in China. For the year ended March 31, 2026, revenues from our “Rest of the World” markets accounted for 8% of our total Global Generics segment’s revenues. Our revenues from our “Rest of the World” markets were Rs.23,749 million in the year ended March 31, 2026, growth of 19% as compared to the year ended March 31, 2025. This increase was largely due to new product launches and strong business performance in Brazil, Colombia and Africa. Global Generics Manufacturing and Raw Materials Manufacturing for our Global Generics segment entails converting API into finished dosages. As of March 31, 2026, we had 14 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. 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 July 2025 and December 2025, the U.S. FDA completed a routine GMP inspection at our formulations manufacturing facilities (Formulations Srikakulam plant 1 (SEZ) and Formulations Srikakulam plant 11) in Srikakulam, Andhra Pradesh respectively. We were issued a Form 483 with seven and five observations. We responded to the observations within stipulated timelines. Accordingly, an Establishment Inspection Report (“EIR”) was issued by the U.S. FDA and the inspection of the facilities were 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. However, our import of Atomoxetine Hydrochloride Capsules into China is subject to a successful on-site audit completion which is scheduled in November 2026 by the NMPA. 42 Pharmaceutical Services and Active Ingredients (“PSAI”) segment Our P SAI 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 With more than 150 APIs supported by regulatory approvals in numerous global markets, we enable our generic manufacturing partners to supply high-quality finished dosage forms—such as tablets, capsules, and injectables—to patients across the world. Our backward-integrated capabilities also allow us to supply intermediates—the precursor stages of final APIs—to our customers. In addition to serving external partners, our API business supports our own generics portfolio. Our PSAI segment’s revenues for the year ended March 31, 2026 were Rs.34,773 million, as compared to Rs. 33,846 million for the year ended March 31, 2025. Our PSAI segment accounted for 10% of our total revenues for the year ended March 31, 2026. During, the year ended March 31, 2026, we filed 128 Drug Master Files (“DMFs”) worldwide, of which 16 were filed in the United States, 3 were filed in Canada, 16 were filed in Europe and 92 were filed in other countries. Cumulatively, our total active DMFs filed worldwide as of March 31, 2026 were 1,748, including 280 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 and biotechnology companies. The pharmaceutical services (contract research, development and manufacturing) arm of our PSAI segment was established in 2001, leveraging 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. 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. 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.16,143 million and accounted for 46% of our PSAI segment’s revenue for the year ended March 31, 2026. In the United States and Europe, while a significant wave of patent expirations for high‑value branded pharmaceutical products has occurred and is expected to continue, the nature of resulting opportunities has evolved. As growth is shifting towards complex, development-linked and speciality APIs, the addressable opportunities set becomes narrower. At the same time, intense price competition, rapid post patent commoditization and rising regulatory and compliance costs are increasingly compressing margins for customers in the PSAI value chain. Our subsidiaries in the United States and Europe manage the full spectrum of our marketing activities in these territories and support customers’ in their regulatory approval process, with a strong focus on building long-term relationships through service excellence. 43 India: India is an important market for our PSAI segment, with total sales of Rs.2,352 million, and it accounted for 7% of the PSAI segment’s revenues in the year ended March 31, 2026. 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.16,279 million for the year ended March 31, 2026 and accounted for 47% of our PSAI segment’s revenues for the year. China is a strategically important market where our local presence and regulatory expertise offer a structural advantage. Exports nonetheless face severe price pressure from scale-led, subsidized Chinese companies, making margin‑accretive growth selective. Other key markets include Brazil, Mexico Korea and Japan. In select markets we work through our agents supported by local marketing and regulatory teams who act as a key interface to understand and serve customers. 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 the Asia Pacific region. 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 supported by investments in technologies and platforms such as peptides. We are further pursuing a partnership-led model to help customers access global markets faster by leveraging our cost leadership and global footprint. These efforts are complemented by continued investments in digital solutions to enhance customer engagement and transparency building on a strong foundational base. 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. 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. 44 Raw Materials Raw material expense forms the largest portion of our cost of revenues in our PSAI segment. 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. The recent geopolitical tension is expected to increase raw material prices and shipping delays, which could lead to longer lead times and selective shortages. Rising energy costs and freight disruptions is expected to push up input prices, with suppliers initiating price increases. Our endeavour would be to ensure continuity of serviceability to our customers demand to ensure serviceability to the patients. 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. 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 22 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 37 (“Organizational Structure”) of our consolidated financial statements for a list of our subsidiaries, joint ventures and associates. 45 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: Sl No. Name/Location Approximate Segments Which Primarily Use Area (Square feet) 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, Bachupally, 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 582,413 Global Generics 20 Formulations Visakhapatnam Plant 2 (SEZ), Andhra Pradesh, India 561,876 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 19,100 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 740,520 Global Generics 28 Biologics, Genome Valley, Hyderabad, India 72,834 Global Generics 46 Sl No. Name/Location Approximate Segments Which Primarily Use Area (Square feet) 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 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, 2026, we expanded the production capacity for multiple products in our “ Formulations Srikakulam Plant 11” and “API Srikakulam Plant”, each located at Andhra Pradesh, India, and added a new leased premises for Biologics at Hyderabad, Telangana, India. During the year ended March 31, 2025, we expanded the production capacity for multiple products in our “ Formulations Srikakulam Plant 11” and “API Srikakulam Plant”, each located at Andhra Pradesh, India, and created new infrastructure at our Biologics facility at Hyderabad and added 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” and our “Formulations Srikakulam Plant 11”, each located in Andhra Pradesh, India. As of March 31, 2026, we had capital work-in-progress of Rs.15,409 million and capital commitments of Rs.9,716 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 consists of projects to enhance the capacity of our “ Formulations Srikakulam Plant 11”, Formulations Visakhapatnam Plant 2 (SEZ)” and “API Srikakulam Plant”, each located at 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, 2027. 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 17 (“Provisions”) and Note 31 (“Contingencies - Environmental matters”) of our consolidated financial statements for details as to environmental matters and liabilities.