RDY

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market rates and prices (such as interest rates, foreign currency exchange rates and commodity prices) or in the price of market risk-sensitive instruments as a result of such adverse changes in market rates and prices. Market risk is attributable to all market risk-sensitive financial instruments, all foreign currency receivables and payables and all short-term and long-term debt. We are exposed to market risk primarily related to foreign exchange rate risk, interest rate risk and the market value of its investments. Thus, our exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currencies. Our Board of Directors and its Audit Committee are responsible for overseeing our risk assessment and management policies. Our major market risks of foreign exchange, interest rate and counter-party risk are managed centrally by our group treasury department, which evaluates and exercises independent control over the entire process of market risk management. We have a written treasury policy, and we do regular reconciliations of our positions with our counter-parties. In addition, internal audits of the treasury function are performed at regular intervals. Components of Market Risk Foreign Exchange Risk Our foreign exchange risk arises from our foreign operations, foreign currency revenues and expenses (primarily in U.S. dollars, Russian roubles, U.K. pounds sterling, Brazilian reals, Swiss francs, Euros and Mexican pesos), foreign currency investments (primarily in U.S. dollars and Euros) and foreign currency borrowings (in Russian roubles, Mexican pesos and Brazilian reals). A significant portion of our revenues are in these foreign currencies, while a significant portion of our costs are in Indian rupees. As a result, if the value of the Indian rupee appreciates relative to these foreign currencies, our revenues measured in Indian rupees may decrease. The exchange rate between the Indian rupee and these foreign currencies has changed substantially in recent periods and may continue to fluctuate substantially in the future. Consequently, we use both derivative and non-derivative financial instruments, such as foreign exchange forward contracts, option contracts, currency swap contracts and foreign currency financial liabilities, to mitigate the risk of changes in foreign currency exchange rates in respect of our highly probable forecast transactions and recognized assets and liabilities. We do not use derivative financial instruments for trading or speculative purposes. In respect of our forward option contracts and currency swaps, a 10% decrease/increase in the respective exchange rates of each of the currencies underlying such contracts would have resulted in an approximately Rs.4,059/(3,688) million increase/(decrease) in our hedging reserve and an approximately Rs.7,294/(7,192) million increase/(decrease) in our net profit from such contracts as of March 31, 2026. For details on derivative financial instruments to hedge the foreign exchange rate risk and a detailed analysis of our foreign exchange risk, please refer to Note 2 9 (“Financial instruments”) and Note 30 (“Financial risk management”) of our consolidated financial statements. Commodity Rate Risk Our exposure to market risk with respect to commodity prices primarily arises from our purchases and sales of active pharmaceutical ingredients, including the raw material components for such active pharmaceutical ingredients. These are commodity products whose prices may fluctuate significantly over short periods of time. The prices of our raw materials generally fluctuate in line with commodity cycles, although the prices of raw materials used in our active pharmaceutical ingredients business are generally more volatile. Costs of raw materials 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. As of March 31, 2026, we have not entered into any material derivative contracts to hedge our exposure to fluctuations in commodity prices. 97 Interest Rate Risk As of March 31, 2026, we had outstanding Rs. 3,799 million of loans carrying a floating interest rate of 3 Months T-bill + 84 bps; Rs. 41 ,500 million of loans carrying a floating interest rate of T-bill + 35 to 55 bps; Rs.12,690 million of loans carrying a floating interest rate of REPO + 75 bps; Rs.1,423 million of loans carrying a floating interest rate of Key rate + 3.48% to 3.98%; Rs.2,795 million of loans carrying a floating interest rate of TIIE + 1.35%; and Rs.727 million of loans carrying a floating interest rate of CDI + 1.55% “CDI” means the Interbank Certificate of Deposit (Certificado de Depósito Interbancário), “Key rate” means the key interest rate published by the Central Bank of Russia, “REPO” means the “Repurchasing option” rate published by the Reserve Bank of India, “SOFR” means Secured Overnight Financing Rate”, “T-bill” means India Treasury bill and “TIIE” means the Equilibrium Inter-banking Interest Rate (Tasa de Interés Interbancaria de Equilibrio). These loans expose us to risks of changes in interest rates. Our treasury department monitors the interest rate movement and manages the interest rate risk based on its policies, which include entering into interest rate swaps as considered necessary. Interest Rate Profile . The interest rate profile of our short-term borrowings from banks is as follows: As of March 31, 2026 2025 Currency(1) Interest Rate(2) Currency(1) Interest Rate(2) RUB Key rate + 348 bps to 398 bps RUB Key rate + 470 bps to 590 bps MXN TIIE + 1.35% MXN TIIE + 1.35% INR T-bill + 35 bps to 55 bps INR 7.50% REPO + 75 bps T-bill + 35 bps to 70 bps BRL CDI+1.55% BRL CDI+1.55% U.S.$ 6 Month SOFR + 10 bps to 65 bps The interest rate profile of our long-term borrowings (other than obligations under leases) is as follows: As of March 31, 2026 2025 Currency(1) Interest Rate(2) Currency(1) Interest Rate(2) Rupee term loan from bank INR 3 Months T-bill + 84 bps INR 3 Months T-bill + 84 bps (1) “BRL” means Brazilian reals, “INR” means Indian rupees, “MXN” means Mexican pesos, “RUB” means Russian rubles and “U.S.$” means U.S. dollars. (2) “CDI” means Brazilian interbank deposit rate (Certificado de Depósito Interbancário), “Key rate” means the key interest rate published by the Central Bank of Russia, “REPO” means the “Repurchasing option” rate published by the Reserve Bank of India, “SOFR” means Secured Overnight Financing Rate, “T-bill” means India Treasury bill interest rate and “TIIE” means the Equilibrium Inter-Banking Interest Rate (Tasa de Interés Interbancaria de Equilibrio). Maturity profile . The aggregate maturities of interest-bearing long-term borrowings (other than obligations under leases), based on contractual maturities, as of March 31, 2026 are as follows: Maturing in the year endingMarch 31, (All amounts in Rs. Millions) 2027 Rs. 3,799 Rs. 3,799 Counter-party risk encompasses settlement risk on derivative contracts and credit risk on cash and term deposits (i.e., certificates of deposit). Exposure to these risks is closely monitored and kept within predetermined parameters. Our group treasury department does not expect any losses from non-performance by these counter-parties. For the year ended March 31, 2026, every 10% increase or decrease in the floating interest rate component applicable to our loans and borrowings would affect our net profit by Rs.347 million. 98

3.A. [Reserved] 3.B. Capitalization and indebtedness Not applicable. 3.C. Reasons for the offer and use of proceeds Not applicable. 3.D. Risk factors You should carefully consider all of the information set forth in this Form 20-F and in other documents we file with or furnish to the SEC, including the following risk factors that we face and that are faced by our industry. The risks below are not the only ones we face. Additional risks not currently known to us or that we presently deem immaterial may also affect our business operations. Our business, financial condition, results of operations and/or cash flows could be materially or adversely affected by any of these risks. This Form 20-F also contains forward-looking statements that involve risks and uncertainties. Our results could materially differ from those anticipated in these forward-looking statements as a result of certain factors, including the risks we face as described below and elsewhere in this report and our other SEC filings. For a summary of the risk factors included in this Item 3.D. and for further details on our forward-looking statements, see “Forward-Looking Statements and Risk Factors Summary” on page 3. MATERIAL RISKS RELATING TO OUR COMPANY AND OUR BUSINESS Our success depends on our ability to successfully develop and commercialize new pharmaceutical products. Our future results of operations depend, to a significant degree, upon our ability to successfully develop and commercialize additional products in our Global Generics and Pharmaceutical Services and Active Ingredients segments. Our research and development efforts are also dependent on collaborating with third party partners and contract research organizations which have the capability to handle complex technologies and products. Lack of effective project management at our end, or any failure to manage collaboration arrangements among multiple partners, may pose significant risks to product development, to our ability to obtain requisite regulatory approvals in a timely manner, and to our ability to successfully and profitably produce and market such products. The development process, including drug formulation, testing and regulatory approvals , often takes many years, and is informed by factors outside of our control, including but not limited to staffing and policy changes at the U.S. FDA and other regulatory agencies . Additionally, if we fail to adequately protect critical proprietary or confidential information or associated intellectual property rights or fail to manage third party partners and contract research organizations that our business depends on, it might have a material adverse impact on our product development execution. From time to time, we also acquire in-process research and development assets, which require significant resources and expenditures to continue to develop, both through our own efforts and through collaborations. Because of the inherent risk associated with research and development efforts in our industry, including the high cost and uncertainty of conducting clinical trials (where required), such efforts may not result in the successful introduction of new pharmaceutical products approved by the relevant regulatory bodies. Our results of operations may suffer if these products are not timely developed, approved or successfully commercialized. Refer to Note 11 (“Property, plant and equipment”), Note 12 (“Goodwill”) and Note 13 (“Other intangible assets”) of our consolidated financial statements for details of impairment of non-current assets. We must develop, test and manufacture generic products as well as prove that our generic products are bio-equivalent or biosimilar to their branded counterparts, either directly or in partnership with contract research organizations. The development and commercialization process, particularly with respect to complex molecules and biosimilars, is both time consuming and costly and involves a high degree of business risk. 6 In addition, the competitive landscape includes a high level of uncertainty as numerous companies are working on or may be evaluating similar targets, and a product considered as promising at the beginning of its development may become less attractive if a competitor addressing the same unmet need reaches the market earlier. Our products currently under development, if and when fully developed and tested, may not perform as we expect or meet our standards of safety and efficacy. Necessary regulatory approvals may not be obtained in a timely manner, if at all, and we may not be able to successfully and profitably produce and market such products. Our approved products may not achieve expected levels of market acceptance. If we fail to comply fully with regulations or to maintain continuing regulatory oversight applicable to our research and development activities or if a regulatory agency delays or denies approvals for new products, it may affect realization of product revenues. Our research and development activities are heavily regulated. If we fail to comply fully with applicable regulations, then there could be a delay in the submission or approval of potential new products for marketing approval. In addition, the submission of an application to a regulatory authority does not guarantee that approvals required to market the product will be granted. Each authority may impose its own requirements and/or delay or refuse to grant approval, even when a product has already been approved in another country. This approval process increases the cost of developing new products to us and increases the risk that we will not be able to successfully sell such new products. Delays in the receipt of, or failure to obtain approvals for, future products, or new indications or life cycle management activities and uses, could result in delayed realization of product revenues, reduction in revenues and substantial additional costs. We have operations in certain countries and geographies susceptible to political and economic instability that could lead to disruption or other adverse impact on such operations. Countries and regions experiencing political and economic instability or armed conflicts can have adverse business, operational or financial impacts on us. For example, geopolitical instability and armed conflict and hostilities in the Russia, Ukraine and the Middle East have disrupted and may continue to disrupt global supply chains, trade routes, energy markets, and transportation infrastructure. Current instability in the region has contributed to volatility in crude oil, natural gas, and petrochemical markets, which directly and indirectly affect the cost and availability of key pharmaceutical inputs, including solvents, intermediates, excipients, and packaging materials. Increases in energy‑linked input costs and related supply interruptions could materially raise our cost of goods sold, compress margins, and adversely impact profitability, especially for products subject to fixed pricing, regulated pricing environments, or long‑term supply contracts. In addition, the region is a critical corridor for international maritime and air cargo traffic, including key trans‑shipment hubs and shipping lanes used to procure raw materials and deliver pharmaceutical products worldwide. The Middle East also represents an important distribution corridor for supplying customers in other regions, including the United States, Europe, Africa, and parts of Asia. Prolonged disruption could delay shipments, increase working capital requirements, and strain inventory and logistics planning. Evolving sanctions, trade restrictions, or compliance requirements arising from geopolitical developments could limit sourcing, logistics options, or market access, and increase regulatory and operational risks. In February 2022, Russia initiated military operations against Ukraine. The armed conflict has continued since that time, with no comprehensive resolution, and has resulted in sustained geopolitical instability in Eastern Europe and beyond. In response, the United States, the European Union, the United Kingdom and other countries have imposed extensive and evolving sanctions, export controls and other restrictive trade and financial measures against Russia and certain Russian entities and individuals, many of which remain in effect and have been expanded or tightened over time. For details on the impacts of this conflict on our business, see the discussion in Section 4.B. of this report under “Our Principal Areas of Operations - Global Generics Segment - Russia and other Countries of the former Soviet Union and Romania.” We continue to monitor the effects of these geopolitical instability and armed conflict and hostilities, as well as to monitor significant political, legal, regulatory and other susceptible economic developments in these regions and attempt to mitigate our exposure where possible. Adverse macroeconomic conditions, including persistent inflationary pressures, elevated interest rates, currency volatility, and disruptions to energy and commodity markets, driven in part by ongoing unresolved geopolitical and regional conflicts, could materially affect our supply chain, financial condition, and results of operations. These conditions may increase input, manufacturing, logistics and financing costs, disrupt supply chains, and reduce demand across key markets. In addition, prolonged uncertainty may lead to tighter credit environments, reduced healthcare spending, delays in tendering and procurement cycles, and heightened pricing pressure from payers and customers. Our ability to offset these impacts through pricing actions, cost efficiencies or supply chain adjustments may be limited, particularly in regulated or highly competitive markets, which could adversely affect our margins and operational performance. 7 If we fail to meet all the quality and regulatory requirements of biologic drugs and fail to successfully challenge third party patents as allowed by national patent offices, it may impact production and revenues. A portion of our portfolio are “biologic” products. Unlike traditional “small-molecule” drugs, biologic drugs cannot be manufactured synthetically, but typically must be produced from living animal cells or micro-organisms. As a result, the production of biologic drugs that meet all quality and regulatory requirements are especially complex Failures in clinical trials or delays in the complex and costly R&D processes for biologic drugs can be a significant setback. Typically, biological therapeutics are extensively protected by innovators and biologic therapeutics have to work around third party intellectual property rights, otherwise known as freedom to operate (“FTO”) aspects. Further, our ability to successfully challenge third party patent rights is dependent on the laws of applicable countries. The regulatory requirements are still evolving and are dynamic in many emerging markets where we sell or manufacture products, including our biologic drugs, and regulatory requirements may be unclear due to lack of precedents, among other reasons, which may lead to delays in product approvals, reapproval or re-licensure process, or other sanctions and, in turn, additional cost to operations. In the United States, the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”) created a statutory pathway and abbreviated approval processes for the approval of biosimilar versions of branded biological products. Further, several legal challenges concerning the requirements of the abbreviated biosimilar pathway, patent exchange and other provisions of BPCIA have been adjudicated in U.S. courts, legal challenges concerning FTO, patent exchange and trade matters, among others, continue. For example, in October 2023 the U.S. FDA inspected our Biologics facility in Hyderabad, India. In November 2024, the U.S. FDA issued a complete response letter (“CRL”) with additional queries in reference to the ongoing resolution of observations arising from the October 2023 inspection, as well as certain aspects pertaining to our biologics license application (“BLA”) for a biosimilar rituximab. We submitted a deficiency response letter for the CRL in April 2025 and an additional CRL response in February 2026. The BLA is under review, and there is no certainty on timelines as to when the U.S. FDA will ultimately approve our resubmitted BLA, or guarantee of such approval, and we could experience further delays relating to the development of this biosimilar product. If we fail to comply with the regulatory standards of various regulatory agencies in manufacturing of quality products, it may have potential impact on our business, financials and operations . Governmental authorities, including among others the U.S. Food and Drug Administration (“U.S. FDA”) and the U.K. Medicines and Healthcare Products Regulatory Agency (“MHRA”), heavily regulate the manufacturing of our products, including manufacturing quality standards. Periodic inspections are conducted on our manufacturing sites, and if the regulatory and quality standards and systems are not found adequate, it could result in an inspection observation (on Form 483, if from the U.S. FDA), or a subsequent investigative letter which may require further corrective actions. In recent years, a number of Indian generic pharmaceutical companies have been issued Official Action Indicated (“OAI”) status notices and warning letters by the U.S. FDA. A significant proportion of our manufacturing base of active pharmaceutical ingredients and formulations plants servicing the United States and other markets of our Global Generics business is based out of India. While our quality practices and quality management systems are designed and maintained in a manner to comply with the highest regulatory and quality standards, the inspections may often lead to non-conformity observations requiring corrective actions. Based on the criticality of the observations and the circumstances, the U.S. FDA may classify the inspection as Voluntary Action Indicated (“VAI”) status or OAI status, may issue warning letters and/or place our products on import alert detention lists. More generally, unless and until an issue, raised in a warning letter from the U.S. FDA is resolved to the agency’s satisfaction, they may withhold approvals of new products and new drug applications, issue import alert notices and/or take additional regulatory or legal action. The delay in approvals due to moving to an alternate site or alternate vendor, or the cost incurred in connection with remedial actions, can have significant adverse impacts on ongoing business, financial results and operations. Refer to Note 34 (“Regulatory inspection of facilities”) of our consolidated financial statements for the status of our U.S. FDA inspections. We deal with numerous third-party manufacturers and, despite our oversight, any lapse in their quality practices and quality management systems could lead to similar adverse outcomes in the event of an inspection by the U.S. FDA. or other regulators. 8 Significant disruptions of information technology systems, breaches of data security or other cyber-attacks could adversely affect our business. Our business depends on increasingly complex and interconnected information technology (“IT”) systems, including internet-based and cloud platforms, as well as third-party service providers, to support our operations, communications, and data exchange. The size, complexity, and interconnectivity of these systems, combined with our growing reliance on outsourcing and collaboration, increase our exposure to system failures, cybersecurity incidents, and other disruptions. Increased reliance on outsourcing arrangements and cloud-based services requires robust and continuously enhanced security controls to protect against threats to data availability, integrity, confidentiality, and privacy, including the risk of sabotage or unauthorized access. Regulators are increasingly focused on data integrity, cybersecurity, and data privacy requirements, and such requirements are reflected in applicable laws, regulations, and contractual obligations. While we have made significant investments in information security controls and data protection measures, there can be no assurance that our controls, or those of our third-party service providers, will be sufficient to prevent data loss, corruption, or unauthorized access in the event of a cybersecurity incident. Despite implementing measures designed to assess, monitor, and mitigate such risks, including cybersecurity safeguards, risk assessments, and disaster recovery planning, these measures may not be effective in preventing or detecting all vulnerabilities, particularly as cyber threats continue to evolve and increase in sophistication. Any compromise, disruption, or failure of our IT systems or those of our third-party providers could result in unauthorized access to, loss, theft, or corruption of confidential or sensitive data, including personal data, intellectual property, and material non-public information. Furthermore, in circumstances where our personnel work remotely, reliance on secure remote access technologies may elevate the risk of cybersecurity incidents. While we maintain cybersecurity insurance as part of our risk mitigation strategy, but there can be no assurance that a policy exclusion will not apply or that our insurance coverage limits will be sufficient to fully recompense us for losses . Such events could also disrupt critical business processes, including research and development activities, clinical trials, regulatory submissions, manufacturing, supply chain operations, financial reporting, and compliance with legal and regulatory obligations. Additionally, our increasing use of automation and ongoing change management initiatives across key functions, and our reliance on outsourced IT infrastructure and cloud-based services, heighten the risk of operational disruption if such initiatives are not effectively implemented or governed, or if third-party providers fail to deliver services in a timely and secure manner. Any of the foregoing events could have a material adverse effect on our business, financial condition, results of operations, or cash flows. If there is delay and/or failure in supplies of materials, services and finished goods from third parties or failure of finished goods from our key manufacturing sites, it may adversely affect our business and results of operations. In some of our businesses, we rely on third parties for the timely supply of active pharmaceutical ingredients, specified raw materials, equipment, formulation or packaging services and maintenance services, and in some cases, there could be a single source of supply. Although we actively manage these third-party relationships to ensure continuity of supplies and services on time and to our required specifications, events beyond our control could result in the complete or partial failure of supplies and services or in supplies and services not being delivered on time. 9 We collaborate with several third-party contract research organizations and contract manufacturing organizations to facilitate the development and commercialization of certain drugs. However, any financial limitations or compliance challenges encountered by these external partners may lead to delays in product launches or cancellation of planned launches. If we experience a shortage in our supply of raw materials, we might be unable to fulfill all of active pharmaceutical ingredients and other raw material needs of our Global Generics segment, which could result in a loss of production capacity for this segment. Moreover, we may continue to be dependent on vendors, strategic partners and alliance partners for supplies of some of our existing products and new generic launches. Any unanticipated capacity or supply related constraints affecting such vendors, strategic partners or alliance partners can adversely affect our business or results of operations. Our key generics manufacturing sites also may have capacity constraints, and, at times, we may not be able to generate sufficient supplies of finished goods. Disruption in global trade routes and transportation infrastructure arising from ongoing conflicts between Russia, Ukraine and in the Middle East could lead to challenges in supply fulfillment from our contract manufacturing organizations and other key suppliers of API and raw materials. That could impact our operations and delay our ability to manufacture finished dosages. If we fail to maintain adequate supply of and quality products , it may adversely affect our reputation and business . We may experience difficulties, delays and interruptions in the manufacturing and supply of our products for various reasons, including among other reasons: · demand that significantly exceeds the forecasted demand, which may lead to supply shortages (this is particularly challenging before the launch of a new product); · supply chain disruptions, including those due to natural or man-made disasters at one of our facilities or at a critical supplier or vendor. · delays in construction of new facilities or the expansion of existing facilities, including those intended to support future demand for our products (the complexities associated with biosimilar facilities, especially for drug substances, increase the probability of delays). · the inability to supply products due to a product quality failure or regulatory agency compliance action such as license withdrawal, product recall or product seizure. For example, during the year ended March 31, 2025, we had a Class I recall of Sapropterin Dihydrochloride (Javygtor) Powder for Oral Solution and Levetiracetam Injection in the United States; · other manufacturing or distribution problems, including changes in manufacturing production sites, limits to manufacturing capacity due to regulatory requirements, changes in the types of products produced, or physical limitations or other business interruptions that could impact continuous supply; and · the difficulties inherent in the manufacture and sale of sterile products, including oncology products, which are technically complex to manufacture, and require sophisticated environmental controls. Because the production process for such products is so complex and sensitive, any production failures may lead to lengthy supply interruptions. Impairment charges or write downs in our books could have a significant adverse effect on our results of operations and financial results. A substantial portion of the value of our assets pertains to various intangible assets and goodwill. The proportion of the intangible assets and goodwill to our total assets could increase significantly as we pursue various growth strategies. The value of these intangible assets and goodwill could be substantially impaired upon indications of impairment, with adverse effects on our financial condition and the value of our assets. Our results of operations may suffer if our products are not timely developed, approved or successfully commercialized. Certain of our products were impaired during the years ended March 31, 2026, 2025 and 2024. Refer to Note 11 (“Property, plant and equipment”), Note 12 (“Goodwill”) and Note 13 (“Other intangible assets”) of our consolidated financial statements for further details. We are subject to the U.S. Foreign Corrupt Practices Act, similar anti-bribery laws and other worldwide laws regarding marketing practices, which impose restrictions and may carry substantial penalties. The U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to public officials or otherwise for the purpose of obtaining or retaining business. These laws may also require us to maintain accurate books and records, as well as to establish and monitor adequate controls, policies and processes to ensure business is conducted without the influence of bribery and corruption. 10 Ethics and compliance is core to our values and, in this pursuit, we have established a strong compliance framework program. Our policies mandate compliance with these anti-bribery laws, which if not complied, often carry substantial penalties including fines, criminal prosecution and potential debarment from public procurement contracts. Failure to comply may also result in reputational damages. We operate in certain jurisdictions that experience governmental corruption to some degree or, are found to be low on the Transparency International Corruption Perceptions Index and, in some circumstances, anti-bribery and anti-corruption (“ABAC”) laws may conflict with some local customs and practices. Business activities in many of these markets have historically been more susceptible to corruption. In many less-developed markets, we work with third party distributors and other agents for the marketing and distribution of our products. Our third party risk management (“TPRM”) policy sets forth the ABAC policy standards required for all of our vendors and third party agents. In addition to requiring initial due diligence screenings and ABAC training and certification, our TPRM policy mandates that contracts with these third parties include ABAC compliance obligations. Nonetheless, any lapses in complying with ABAC laws by these third parties despite our TPRM policy may adversely impact us. Refer to Note 31 (“Contingencies - Internal Investigation”) of our consolidated financial statements for current internal investigation details. From time to time , any change in regulatory requirements in the key geographies in which we operate might require us, along with the rest of the industry, to make necessary corresponding changes in our approach. We need to constantly review and update our compliance program to keep it current and active. If we fail to do so, our vulnerabilities may increase and our controls may be found to be inadequate. Actions by our employees, or third-party intermediaries acting on our behalf, in violation of such laws, whether carried out in the United States or elsewhere, may expose us to liability for violations of such anti-bribery laws and accordingly may have a material adverse effect on our reputation and our business, financial condition, results of operations and/or cash flows. Our success depends on our ability to retain and attract qualified personnel and, if we are not able to retain them or recruit additional qualified personnel, we may be unable to successfully develop our business. We are highly dependent on the principal members of our management and scientific staff, the loss of whose services might significantly delay or prevent the achievement of our business or scientific objectives. In the United States, executive officers and key employees typically provide a very short termination notice period (usually two weeks or less) unless specified otherwise in their contracts. However, in India, employment agreements generally mandate a termination notice period of several months. Competition among pharmaceutical companies for qualified employees is intense, and the ability to retain and attract qualified individuals is critical to our success. Current or prospective employees may have changing expectations around workplace flexibility and diversity and inclusion, and a failure to meet these expectations may affect our ability to attract and retain top talent to support our business growth. There can be no assurance that we will be able to retain and attract such individuals currently or in the future on acceptable terms, or at all, and the failure to do so could have a material adverse effect on our business, financial condition, results of operations and/or cash flows. Changes in tariffs and trade policies, and any retaliatory measures by other countries, could increase business costs, impact supply chains and cause business uncertainty, any of which may adversely impact our operations, supply chain, cash flows and profitability. Escalating trade tensions have led to increased tariffs and trade restrictions. Since taking office in January 2025, the current U.S. presidential administration has issued numerous executive orders implementing or revising tariffs and international trade policies, seeking to prioritize U.S. domestic industry and rebalance global trade dynamics. For example, the “Liberation Day” tariffs announced on April 2, 2025 included universal tariffs on imported goods, along with additional “reciprocal” tariffs on dozens of named countries. Although these tariffs include certain pharmaceutical product exemptions, such exemptions were identified by the U.S. administration as potentially temporary and subject to further review. Any trade policy change, through the implementation of tariffs or otherwise, or uncertainty regarding their implementation or final rates can create a volatile business environment, affecting strategic planning and investment decisions, and may have a material adverse effect on global trade, macroeconomic and geopolitical conditions and the stability of global financial markets. Tariffs and related trade actions could increase our cost of goods sold, including through higher costs or reduced availability of active pharmaceutical ingredients, packaging components and other raw materials. These factors, individually or collectively, could adversely affect our business, financial condition, results of operations and cash flows. Changes in laws or policies related to pricing for prescription drugs, including most-favored-nation (“MFN”) requirements, could adversely affect our product prices and profit margins, and thereby our operations, revenues and profits. The adoption in new jurisdictions of laws and policies that reduce, establish or mandate price controls or establish prices paid by government entities or programs for our products, or the implementation of more restrictive controls in existing jurisdictions, could adversely affect our product prices and profit margins, and thereby our operations, revenues and profits. The failure to establish or maintain timely or adequate pricing may also adversely impact operations, revenues and profits. We expect that pricing pressures will continue globally. For example, On May 12, 2025, the U.S. President issued an executive order "Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients," directing executive agencies to take steps to facilitate most-favored-nation (“MFN”) pricing for prescription drugs in the United States. The executive order directs the Secretary of Health and Human Services (“HHS”) to communicate MFN pricing targets to pharmaceutical manufacturers by June 11, 2025. Manufacturers are expected to make “significant progress” toward meeting these targets. If they fail to do so, then other regulatory actions are to be pursued, including proposing rules to implement MFN pricing, working with Congress to allow for expanded drug importation, exploring U.S. FDA drug approval reforms, increased antitrust enforcement and review of drug export practices. The order does not specify which drugs would be subject to MFN pricing, which countries will be considered, how MFN targets will be set or enforced, or what qualifies as “significant progress.” The May 12, 2025 executive order also calls on the Secretary of Commerce and the U.S. Trade Representative to address foreign pricing practices that may harm U.S. interests, including suppressing drug prices abroad and shifting the global research burden to American consumers. Additionally, the order directs HHS to support direct-to-consumer sales at MFN prices, seeking to bypass intermediaries in the current U.S. drug supply chain. We cannot predict the ultimate effect of this executive order on our business, but this could adversely affect our product prices and profit margins, and thereby our operations, revenues and profits. The executive order may also face lawsuits challenging the enforceability of certain of its terms, the outcome of which is inherently uncertain. As the implementation of this executive order evolves, we will continue to assess its impact on us. Reforms in the health care industry and the uncertainty associated with pharmaceutical pricing, reimbursement and related matters could adversely affect the marketing, pricing and demand for our products. Our businesses are operating in an ever more challenging environment, with significant pressures on the pricing of our products and on our ability to obtain and maintain satisfactory rates of reimbursement for our products by governments, insurers and other payors. For example, in the United States, Congress passed the Inflation Reduction Act of 2022 (the “IRA”), which makes significant changes to how drugs are covered and paid for under the Medicare program, including the creation of new rebates and financial penalties for drugs (including single-source generics) whose prices rise faster than the rate of inflation, redesign of the Medicare Part D program to require manufacturers to bear more of the liability for certain drug benefits, and government price-setting for certain Medicare Part D drugs, starting in 2025, and Medicare Part B drugs starting in 2028. The long-term implications of the IRA remain uncertain and we are continuing to evaluate this law and its impact on our business. The U.S. Congress also continues to consider other drug pricing legislation that, if passed and signed into law, could impact companies’ ability to increase prices for prescription drugs, even in case of increase in our input costs, to maintain our margins. The FDA's Safe Importation Action Plan has been implemented, allowing states to import certain prescription drugs from Canada under specific conditions. In January 2024, Florida became the first state authorized to implement a Section 804 Importation Program to import drugs from Canada. Although the U.S. FDA has authorized Florida to import specific drugs from Canada, the plan is still in its early stages and requires further steps before it can be fully implemented. It is unclear how this program will be implemented, including which drugs will be chosen, and whether it will be subject to legal challenges in the United States or Canada. Other states have also submitted importation program proposals that are pending review by the U.S. FDA. Any such importation plans, when approved and implemented, may result in lower drug prices for products covered by those programs. Certain states have also proposed other measures that are designed to control the costs of pharmaceuticals for which they provide reimbursement. The growth of overall healthcare costs as a percentage of gross domestic product in many countries means that governments and payors are under intense pressure to control healthcare spending even more tightly than in the past. 11 These pressures are particularly strong given the persistently weak economic and financial environment in many countries and the increasing demand for healthcare resulting from the aging of the global population and associated increases in non-communicable diseases. These pressures are further compounded by consolidation among distributors, retailers, private insurers, managed care organizations and other private payors, which can increase their negotiating power. For example, there are three large Group Purchasing Organizations that account for a substantial majority of generics purchases in the United States in 2025. In addition, these pressures are augmented by intense publicity regarding the pricing of pharmaceuticals by our competitors, as well as government investigations and legal proceedings regarding pharmaceutical pricing practices. Refer to Note 31 (“Contingencies”) of our consolidated financial statements for current investigations and legal proceedings. In many countries in which we currently operate, pharmaceutical prices are increasingly subject to regulation. Our products continue to be subject to increasing price and reimbursement pressure that can limit the revenues we earn from our products in many countries due to, among other things: · the existence of government-imposed price controls, tender systems, mandatory discounts and rebates, pricing transparency mandates and drug importation program; · more governments using international reference pricing to set the price of drugs based on international comparisons (Refer to “Our Principal areas of Operations - Global Generic segment” in Item 4.B. of this report); · increased difficulty in obtaining and maintaining satisfactory drug reimbursement rates; · increase in cost containment policies related to health expenses in the context of economic slowdown; · more demanding evaluation criteria applied by health technology assessment agencies when considering whether to cover new drugs at a certain price level; and · the ongoing macroeconomic environment and tariffs (i.e., tariffs imposed by the United States and retaliatory tariffs from other countries in response) or any escalation thereof could force us to evaluate our product pricing. We expect these efforts to continue as healthcare payors around the globe, in particular government-controlled health authorities, insurance companies and managed care organizations, step up initiatives to reduce the overall cost of healthcare. A limited number of products may account for a significant portion of our revenues, and declines in demand, pricing or related inventory adjustments for such products could adversely affect our results. Sales of a relatively small number of products may at times represent a significant portion of our net revenues, gross profit and/or net earnings in certain markets. Any reduction in the volume or pricing of these products, delays in regulatory approvals for new or replacement products, or increased competition could have a material adverse effect on our business, financial position and results of operations. In addition, consistent with industry practice, we may provide shelf stock or other inventory-related adjustments to customers in connection with product price reductions. The magnitude and timing of such adjustments are inherently uncertain and depend on factors beyond our control, including competitive pricing dynamics, new product launches and customer inventory levels. If actual adjustments differ from our estimates, or if significant price erosion occurs, our revenues, margins, profits and cash flows may be adversely affected. We operate in a highly competitive and rapidly consolidating industry which may adversely affect our revenues and profits. O u r products face intense competition from products commercialized or under development by competitors in all of our business segments based and geographies in which we operate. Many of our competitors have greater financial resources and marketing capabilities than we do. Our competitors may succeed in developing technologies and products that are more effective, more popular or cheaper than any we may develop or license, thus rendering our technologies and products obsolete or uncompetitive, which would harm our business and financial results. It is also possible that alternate therapies or substitutable products that we developed for the same indication would lead to cannibalization of revenues from our products. The U.S. FDA’s efforts to increase the pace at which generics enter the market has also resulted in higher competition and in a trend of many first-time generic manufacturers entering the market, which is further increasing competition in the market and increasing pressure on pricing. In recent years, there has also been an increase in the number of generic manufacturers targeting significant new generic opportunities with exclusivity under the Hatch-Waxman Act, or which are complex to develop. Many of the smaller generic manufacturers have increased their capabilities, level of sophistication and development resources in recent years. Our generics business is also facing increasing competition from brand-name manufacturers who do not face any significant regulatory approvals or barriers to enter into the generics market. These brand name manufacturers have devised numerous strategies to do so including, for example, by selling generic versions of their products directly, by forming strategic alliances with our competitor generic pharmaceutical companies or by granting them rights to sell “authorized generics”. Moreover, brand companies continually seek new ways to delay the introduction of generic products and decrease the impact of generic competition, such as by: filing new patents on drugs whose original patent protection is about to expire, developing patented controlled-release products, changing the dosage form or dosing regimen of the brand product prior to generic introduction while the generic applicant seeks to amends its ANDA dossier to match the changes in the brand product; changing product claims and product labeling; developing and marketing as over-the-counter products those branded products that are about to face generic competition; or pricing the branded product at a discount equivalent to generic pricing. 12 We are subject to data protection laws and regulations in many different jurisdictions and countries where we do business, and a failure to comply by us or by our third parties acting on our behalf could result in fines, administrative and criminal penalties, reputational damage, and could adversely impact the way we operate our business. We are subject to laws and regulations governing the collection, use, transfer and retention of personal data, including health information. As the legislative and regulatory landscape continues to evolve around the world, there has been an increasing focus on data privacy and protection issues that may affect our business. The European Union’s (EU) General Data Protection Regulation (“GDPR”), which became fully effective in May 2018, implemented stringent requirements on how a company may gather, retain, use and manage personal and sensitive personal data, as well as mandatory data breach notification requirements. The GDPR grants national authorities the power to apply fines of up to EUR 20 million or 4% of the previous financial year’s global turnover (whichever is greater). Additionally, the California Consumer Privacy Act (“CCPA”) of 2018, as amended by California Privacy Rights Act (“CPRA”) of 2020, created new individual privacy rights for California consumers and increased the privacy and security obligations on business entities handling personal data of consumers or households. These laws require businesses to provide new disclosures to California consumers, provide such consumers with new ways to opt-out of certain sales of personal information, and allow for a new cause of action for data breaches. Similarly, several other U.S. states have recently enacted privacy laws which are either currently in effect or are in process of being implemented. More recently, in India, the Digital Personal Data Protection Act of India (the “DPDP Act”) and the related Digital Personal Data Protection Rules, 2025 (“DPDP Rules”) puts several obligations on ‘data fiduciaries’ which process digital personal data collected in India or processed in connection with offering goods and services to individuals in India. As per the DPDP Act, penalties levied for data breaches can be up to INR 2.5 billion. Under the DPDP Rules, ‘data fiduciaries’ have been given a timeline of up to 18 months (i.e., until May 2027) to comply. Other countries in which we do business have, or are developing, or strengthening data protection laws that may affect our business or require us to adapt our technologies and organizational measures. Also, data localization requirements and enforcement in certain countries (including Russia, some countries of the former soviet union, and China), as well as the European Union’s restrictions related to cross-border transfer of personal data to third countries, further limits the ease of transfer of personal data from such countries to the rest of the world. Evolving third-party relationships beyond the traditional vendor/supplier model and the increased use of digital solutions and medical devices, including those utilizing emerging technologies such as artificial intelligence (“AI”), pose new privacy, and security challenges. These will require constant monitoring of new guidelines and regulations (e.g. the EU AI act) around the world, such as the EU AI Act (Regulation (EU) 2024/1689 laying down harmonized rules on artificial intelligence), as well as a need for us to assess and upgrade our capabilities in these areas. The burdensome and often conflicting requirements under these various Data Protection laws as well as emerging AI laws and guidelines, require us to allocate increasingly greater resources towards ensuring compliance with them. Among other things, there is significant additional cost associated with the development, implementation and maintenance of upgrades to our information technology systems, as well as ongoing monitoring and governance efforts. If we fail to comply with environmental laws and regulations, or face environmental litigation, our costs may increase, or our revenues may decrease. We may incur substantial costs complying with requirements of environmental laws and regulations. In addition, we may discover currently unknown environmental problems or conditions. In all countries where we have production facilities, we are subject to significant environmental laws and regulations that govern the discharge, emission, storage, handling and disposal of a variety of substances that may be used in or result from our operations. In the normal course of our business, we are exposed to risks relating to possible releases of hazardous substances into the environment, which could cause environmental or property damage or personal injuries, and that could require remediation of contaminated soil and groundwater, which could cause us to incur substantial remediation costs that could adversely affect our consolidated financial position, results of operations or liquidity. Refer to Note 31 (“Contingencies - Environmental matters”) of our consolidated financial statements for further details on current environmental matters. 13 If any of our plants or the operations of such plants are shut down, it may severely hamper our ability to supply our customers and we may continue to incur costs in complying with regulations, appealing any decision to close our facilities, maintaining production at our existing facilities and continuing to pay labor and other costs, which may continue even if the facility is closed. Environmental regulatory requirements in different countries where we operate continue to evolve and may require us to incur additional costs to comply with such requirements. If we elect to sell a generic product prior to the final resolution of outstanding patent litigation, we could be subject to liabilities for damages. At times we seek approval to market generic products before the expiration of patents for those products, based upon our belief that such patents are invalid, unenforceable, or would not be infringed by our products. As a result, we might be involved in patent litigation, the outcome of which could materially adversely affect our business. Based upon a complex analysis of a variety of legal and commercial factors, we may elect to market a generic product even though litigation is still pending. This could be before any court decision is rendered or while an appeal of a lower court decision is pending. To the extent we elect to proceed in this manner, if the final court decision is adverse to us, we could be required to cease the sale of the infringing products and face substantial liability for patent infringement. These damages may be significant as they may be measured by lost profits of the patent holder, a royalty on our sales or by such damages as may be awarded by the court as a result of final litigation outcome. Because of the discount pricing typically involved with generic pharmaceutical products, patented brand products generally realize a significantly higher profit margin than generic pharmaceutical products and, as a result, a lost profits damages award may exceed the profits we earned on a generic product. Refer to Note 31 (“Contingencies”) for further details on our current product and patent related litigations. Furthermore, there may be risks involved in entering into in-licensing arrangements for products, which are often conditioned upon the licensee’s sharing in the patent-related risks. For business reasons, we continue to examine such product opportunities (i.e., involving non-expired patents) going forward and this could result in patent litigation, the outcomes of which may have a material adverse effect on our results of operations, financial condition and/or cash flows. If we are unable to defend ourselves in patent challenges, we could be subject to injunctions preventing us from selling our products, or we could be subject to substantial liabilities that could adversely affect our profits and cash flows. Further, our patent settlement agreements with the innovators may face government scrutiny, exposing us to significant damages. There has been substantial patent related litigation in the pharmaceutical industry concerning the manufacture, use and sale of various products. In the normal course of business, we are regularly subject to lawsuits and the ultimate outcome of litigation could adversely affect our results of operations, financial condition, and cash flow. Regardless of regulatory approval, lawsuits are periodically commenced against us with respect to alleged patent infringements by us, such suits often being triggered by our filing of an application for governmental approval, such as an ANDA or NDA. The expense of any such litigation and the resulting disruption to our business, whether or not we are successful, could harm our business. The uncertainties inherent in patent litigation make it difficult for us to predict the outcome of any such litigation. If we are unsuccessful in defending ourselves against these suits, we could be subject to injunctions preventing us from selling our products, resulting in a decrease in revenues, or to damages, which may be substantial. An injunction or substantial damages resulting from these suits could adversely affect our consolidated financial position, results of operations or liquidity. Further, we have been involved in various litigations involving challenges to the validity or enforceability of registered patents and therefore settling such patent litigations has been and is likely to continue to be an important part of our business. Parties to patent litigation settlement agreements in the United States, including us, are required by law to file them with the Federal Trade Commission (“FTC”) and the Antitrust Division of the Department of Justice for review. The FTC has publicly stated that, in its view, some of the brand-generic settlement agreements violate the antitrust laws and has brought actions against some brand and generic companies that have entered into such agreements. Accordingly, such settlement agreements may expose us to antitrust violation claims. California passed the Preserving Access to Affordable Drugs (AB-824), legislation that could adversely impact our ability to settle patent litigations. The law, which took effect on January 1, 2020, creates a presumption that a patent settlement has anti-competitive effects, and thus violates California's state antitrust law, if it provides for the generic pharmaceutical company to receive “anything of value” from the branded pharmaceutical company and if the generic pharmaceutical company agrees to delay the launch of a generic product for any period of time. The law specifically identifies exclusive licenses and agreements by the branded pharmaceutical company “not to launch an authorized generic version” of its branded product as things of value that would trigger the presumption. Such presumption may make it more difficult to negotiate settlement agreements which are subject to this law. 14 Class action lawsuits could expose us to significant liabilities, result in negative publicity, harm our reputation and have a material adverse effect on the price of our ADSs. Shareholders of a public company sometimes bring securities class action lawsuits against the company following periods of instability in the market price of that company’s securities. As a public company grows in size, the risk of such litigations may increase. If we were to be sued in any such class action suit, irrespective of the merits of the underlying case, it could have adverse effects on us, including among other things: (a) a diversion of management’s time and attention and other resources from our business and operations, which could harm our results of operations; (b) negative publicity, which could harm our reputation and restrict our ability to raise capital in the future; (c) require us to incur significant expenses to defend the suit; and (d) if a claim against us is successful, we may be required to pay significant damages and, in certain circumstances, to indemnify our directors and officers if they are named as defendants in the class action suit. Any of the foregoing could, individually or in the aggregate, have a material adverse effect on our financial condition, results of operations, cash flows and/or the price of our ADSs. OTHER RISKS GENERALLY APPLICABLE TO OUR INDUSTRY OR THE GEOGRAPHIES IN WHICH WE OPERATE With an increased focus from key stakeholders on climate-related and other sustainability disclosures, an inadequate performance and management of sustainability topics could adversely affect our business. As sustainability continues to gain significance with governments, companies and investors, there have been multiple shifts in the global sustainability regulatory and reporting landscape, along with changing stakeholder expectations. Disclosure requirements are becoming more complex with constantly evolving and newly emerging sustainability reporting regulations, and mandatory and voluntary frameworks such as the Corporate Sustainability Reporting Directive (CSRD) and International Sustainability Standards Board (ISSB) sustainability disclosure standards. There is little or no standardization across methodologies and a shift in compliance timelines. Many voluntary disclosures on human rights-related or climate-related issues and topics are expected due to their growing global significance and need for urgent solutions. As we engage in voluntary reporting and prepare for compliance with mandatory standards, we face greater pressure to ensure the accuracy, reliability, and verifiability of our sustainability data, requiring strong internal controls and processes to internally and externally assure, and deliver timely reporting to our stakeholders. Climate change has the potential to increase the frequency and severity of natural disasters and extreme weather events. Even if we take precautions to provide back-up support in the event of such a natural disaster, the disaster may nonetheless affect our facilities, harming production and ultimately our business. And, even if our manufacturing facilities are not directly damaged, a large natural disaster may result in disruptions in distribution channels or supply chains. We are an integrated pharmaceutical company operating in multiple geographies such as India, Mexico, and the United Kingdom. Several of our operations can be exposed to different climate-related regulations. In addition, current or emerging laws or regulations intended to limit greenhouse gas emissions or water usage, such as carbon pricing, taxes on emissions, fuel and energy, or to mitigate the impacts of climate change may become more prevalent, which could increase our operating costs and the costs charged by suppliers. These events could have a material adverse effect on our business. Our customers conduct audits on a continual basis on matters related to sustainability including climate change adaptation and mitigation. Inadequate management of environmental resources could lead to loss of revenue, higher operational costs, and incidents that could harm our communities and the environment, leading to financial and reputational implications. Moving to new, more sustainable solutions for resource conservation may require increased capital expenditure. We are subject to various laws and regulations concerning, among other things: employee safety; product safety; the handling, transportation, storage, use and disposal of chemicals; and the discharge of regulated materials and pollutants into the environment. Failure to adapt to or comply with existing or new regulatory requirements, or investor or stakeholder expectations and standards, on these sustainability matters could negatively impact our reputation or harm our business. Our suppliers, business partners, or other stakeholders are subject to similar expectations, which may augment or create additional risks. We have set ambitious strategic sustainability goals in line with our vision, and our targets, stated strategy, and the ability to achieve our goals are based on assumptions that are subject to change in the future. Meeting our access to medicines goals involves navigating complex factors such as government regulations, socioeconomic factors, the availability, quality, and increasing costs of medicines, healthcare expenditures etc., and may impact our ability to deliver affordable and innovative treatment to patients. This year we have set an ambitious goal of achieving net zero emissions by fiscal year 2045, in addition to our targets on carbon neutrality and renewable energy. Achieving these goals is dependent on multiple external factors, including the pace of deployment of renewable energy, intermittency and variability, storage capacity and infrastructure challenges, technical challenges and the cost of carbon offsets. These factors may impact our ability to meet our goals or meet them within our stated timelines, including heightened stakeholder expectations, and our reputation may be harmed. In recent years, in addition to financial results, companies are increasingly being judged by their sustainability practices. Several global and national organizations including sustainability rating agencies, research analysts, and disclosure and standards organizations evaluate our work through in-depth analyses of our sustainability efforts. These include reviews of our publicly available documents, and independent quantitative and qualitative assessments, often involving discussions with our management and employees. The results of these ratings are publicly and widely available. Investor sentiment is also driven by global shifts, the political climate, and international policies. Considering the fast pace of change of external expectations and regulations, there can be no certainty that we will manage such issues successfully, that the sustainability standards we currently use to measure our performance against will remain the same, or that we will successfully meet society or investors’ expectations. An inability to manage investor sentiment or conflicting stakeholder expectations may lead to audits, other enforcement action or liabilities and reputational damage. If we improperly handle any of the dangerous materials used in our business and accidents result, we could face significant liabilities that would adversely affect our business, reputation and result of operations. We handle dangerous materials, including explosive, toxic and combustible materials. If improperly handled or subjected to the wrong conditions, these materials could cause accidents resulting in injury, property and environment damage, and business disruptions. Changes in business and operations in our plants from the introduction of new products, or increased demand for existing products, can also pose increased safety hazards. Such hazards can be addressed and mitigated through project risk assessment, employee and contractor training, proper governance systems and other safety measures, and the failure to carry these out can lead to industrial accidents. Any of the foregoing could subject us to significant litigation, which could lower our profits in the event we were found liable and could also adversely impact our reputation. In a worst case scenario, this could also result in a government forced shutdown of our manufacturing plants, which in turn could lead to product shortages that delay or prevent us from fulfilling our obligations to customers and would adversely affect our business and results of operations. We may be susceptible to significant product liability claims that are not covered by insurance. Our business inherently exposes us to potential product liability claims, and the severity and timing of such claims are unpredictable. Notwithstanding pre-clinical and clinical trials conducted during the development of potential products to determine the safety and efficacy of products for use by humans following approval by regulatory authorities, unanticipated side effects may become evident only when drugs are introduced into the marketplace. Due to this fact, our customers and participants in clinical trials may bring lawsuits against us for alleged product defects. In other instances, third parties may perform analyses of published clinical trial results which raise questions regarding the safety of pharmaceutical products, and which may be publicized by the media. Even if such reports are inaccurate or misleading, in whole or in part, they may nonetheless result in claims against us for alleged product defects. Under the current regulatory scheme in the United States, branded drug manufacturers can independently update product labeling through the “changes being effected” (“CBE”) supplement process, but a generic manufacturer is only permitted to use the CBE process to update its label if the branded drug manufacturer changes its label first. This can prevent generic manufacturers from complying with state law warning requirements and, as a result, state product liability suits based on failure-to-warn and design defect claims against generics manufacturers have generally been determined to be preempted by Federal law. However, emerging developments in various countries laws relating to the liability of generic pharmaceutical manufacturers for certain product liability claims could increase our exposure to litigation costs and damages. This potential exposure to lawsuits would also have increased the risk that, in the future, we would not be able to obtain the type and amount of insurance coverage we desire at an acceptable price The risk of exposure to lawsuits is likely to increase as we develop limited competition/complex products, such as injectable vaccines or biosimilar products, in addition to making generic versions of drugs that have been in the market for some time. In addition, the existence or even threat of a major product liability claim could also damage our reputation and affect consumers’ views of our other products, thereby negatively affecting our business, financial condition, results of operations and cash flows. 15 The off-label use of our products may result in costly investigations, fines or sanctions by regulatory bodies if we or our distributors are deemed to have engaged in the promotion of these uses. While physicians may prescribe products for uses that are not described in the product labeling and that differ from those approved by the U.S. FDA or other similar regulatory authorities (an “off label” use), we and our distributors are permitted to market our products only for the indications for which they have been approved. The U.S. FDA and other regulatory agencies actively enforce regulations prohibiting promotion of off-label uses, and significant liability can be imposed on manufacturers found to be engaged in off-label marketing violations, including substantial civil penalties and fines, as well as criminal sanctions or exclusion from participation in government healthcare programs. If some of our products are prescribed off label, regulatory authorities such as the U.S. FDA could take enforcement actions if they conclude that we or our distributors have engaged in off label marketing. Fluctuations in exchange rates and interest rate movements may adversely affect our business and results of operations. A significant portion of our revenues are in currencies other than the Indian rupee, especially in the U.S. dollar, the Euro, the Russian rouble, the U.K. pound sterling, and the Brazilian reals, while a significant portion of our costs are in Indian rupees. As a result, if the value of the Indian rupee appreciates relative to these other currencies, our revenues measured in Indian rupees may decrease and our financial performance may be adversely impacted. Further, we may also be exposed to credit risks in some of the emerging markets from our customers on account of adverse economic conditions. We use derivative financial instruments to manage interest rate fluctuations and some of our net exposure to currency exchange rate fluctuations in certain key foreign currencies. Current economic conditions may adversely affect our industry, financial position, results of operations and cash flows. In recent years, the global economy has experienced volatility and an unfavorable economic environment, and these trends may continue in the future. The growth of our business may be negatively affected by high unemployment levels and increases in co-pays, which may lead some patients to delay treatments, skip doses or use less effective treatments to reduce their costs. We have exposure to many different industries and counterparties, including our partners under our alliance, research and promotional services agreements, suppliers of raw materials, drug wholesalers and other customers, who may be unstable or may become unstable in the current economic environment. We run the risk of delayed payments or even non-payment by our customers, which consist principally of wholesalers, distributors, pharmacies, hospitals, clinics and government agencies. Significant changes and volatility in the consumer environment and in the competitive landscape may make it increasingly difficult for us to predict our future revenues and earnings. In addition, there has recently been an accelerated rate of inflation (a trend which is expected to continue in the near future) that has resulted, and may continue to result, in increased costs of labor, raw materials, other supplies and commodity prices and freight and distribution costs, among others. For the pharmaceutical industry, the pricing dynamics of our products generally does not provide the opportunity to pass on such costs to customers. Inflation may also result in higher interest rates and increased costs of capital. Stringent labor laws may adversely affect our ability to have flexible human resource policies; labor union problems could negatively affect our production capacity and overall profitability. Labor laws may restrict our human resource policies and impact our ability to react swiftly to the needs of our business. As of March 31, 2026, approximately 1.6% of our employees belonged to various labor unions. If we experience problems with our labor unions, that may adversely affect our production capacity and our overall results and operations. The Code on Social Security, 2020 and other new labor codes have been recently enacted in India, and the corresponding rules have been issued; however, the implementation of these codes remains subject to evolving regulatory guidance, including state-level rulemaking, interpretational uncertainties, and phased enforcement mechanisms. As a result, the full impact of these changes on our operations, compliance obligations, employee costs and administrative processes remains uncertain. Refer to Note 26 (“Employee benefits”) of our consolidated financial statements for a discussion of the impacts of these new labor codes in India. If we have difficulty in identifying candidates for or consummating acquisitions and strategic alliances, our competitiveness and our growth prospects may be harmed. In order to enhance our business, we frequently seek to acquire or make strategic investments in complementary businesses or products, or to enter into strategic partnerships or alliances with third parties. It is possible that we may not identify suitable acquisition, strategic investment or strategic partnership candidates, or if we do identify suitable candidates, we may not complete those transactions on terms commercially acceptable to us. We compete with others to acquire companies, and we believe that this competition has intensified and may result in decreased availability or increased prices for suitable acquisition candidates. Even after we identify acquisition candidates and/or announce that we plan to acquire a company, we may ultimately fail to consummate the acquisition. For example, we may be unable to obtain necessary regulatory approvals, including the approval of antitrust regulatory bodies. 16 All acquisitions involve known and unknown risks that could adversely affect our future revenues and operating results. For example: · We may fail to successfully integrate our acquisitions in accordance with our business strategy. · The initial rationale for the acquisition may not remain viable due to a variety of factors, including unforeseen regulatory changes and market dynamics after the acquisition, and this may result in a significant delay and/or reduction in the profitability of the acquisition. · We may not be able to retain the skilled employees and experienced management that may be necessary to operate the businesses we acquire. If we cannot retain such personnel, we may not be able to locate or hire new skilled employees and experienced management to replace them. · We may purchase a company that has contingent liabilities that include, among others, known or unknown patent or product liability claims or environmental liability claims. · We may purchase companies located in jurisdictions where we do not have operations and as a result we may not be able to anticipate local regulations and the impact such regulations have on our business. Changes in tax regulations of the countries we operate in may increase our tax liabilities and thus adversely affect our financial results. Currently we are entitled to concessional tax rate under Indian tax laws for one of our subsidiaries in India. Concessional tax rates are reduced rates applicable to companies engaged in manufacturing activities which have been set-up and registered in India on or after October 1, 2019 and which commenced manufacturing or production on or before March 31, 2024. Any changes in these laws may increase our tax liability and thus affect our financial results accordingly. India’s Finance Act, 2016 amended the test of residence for foreign companies. While a non-resident company is generally taxed only on its Indian sourced income, a resident company is taxed on its global income. Under the amended rule, a company not formed under the laws of India would be considered a resident in India if its place of effective management in the previous year was in India. The term “place of effective management” (or “PoEM”) has been defined to mean a place where key management operates and commercial decisions that are necessary for the conduct of the business of an entity as a whole are in substance made. We operate in various countries, and changes in tax rate or tax laws of countries in which we have significant operations could result in a material impact on our tax liabilities and tax charges, resulting in either an increase or a reduction in financial results depending upon the nature of the change. There may be changes in tax rates in a few countries due to initiatives such as the Pillar Two Inclusive Framework on the Base Erosion and Profit Shifting (“BEPS”) project undertaken by the Organization for Economic Cooperation and Development (“OECD”), which seeks to establish a global minimum tax rate of 15%. Currently, numerous countries are drafting or have enacted legislation to implement Pillar Two rules with some effective dates as early as January 1, 2024. Tax and compliance costs are expected to be increased by the adoption of Pillar Two regulations in these countries. We continue to monitor developments in OECD guidance and the enactment and implementation of Pillar Two legislation across various jurisdictions and its impact. In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law in the United States, introducing significant changes to U.S. corporate tax rules. The OBBBA includes provisions affecting the deductibility of interest expense for U.S. federal tax purposes, the treatment of research and development costs and other depreciable property, among other changes to U.S. corporate tax law. Although the OBBBA did not have a material effect on our consolidated financial statements for the year ended March 31, 2026, future interpretations, regulatory guidance, or changes in our business operations could result in increased tax liabilities, reduced deductions, or other adverse effects on our effective tax rate and financial condition. We operate in jurisdictions that impose transfer pricing and other tax-related regulations on our intercompany arrangements, and any failure to comply could materially and adversely affect our profitability. We are required to comply with various transfer pricing regulations in India and other countries. Failure to comply with such regulations may impact our effective tax rates and consequently affect our net margins. Additionally, we operate in numerous countries and our failure to comply with the local and municipal tax regimes may result in additional taxes, penalties and enforcement actions from such authorities. Although our intercompany arrangements are based on accepted tax standards, tax authorities in various jurisdictions may disagree with and subsequently challenge the amount of profits taxed in such jurisdictions, which may increase our tax liabilities and could have a material adverse effect on the results of our operations and cash flows. Further, the BEPS project undertaken by the OECD contemplates changes to numerous international tax principles. Various countries have incorporated such tax principles into their domestic legislations by way of enactment. These enactments are significant in nature and require compliance on a regular basis. Although we will continue to adhere to such compliance, significant uncertainties remain as to the outcome of these efforts. 17 From time to time we enter new markets, and face risks arising out of our limited knowledge of the market and the customs, laws and regulatory systems that may apply. From time to time, we enter new markets in which we have limited knowledge of the market and the customs, laws, regulatory, political and social systems that may apply. Our success in these new markets is dependent upon the acceptability of our product and brand, the ease of doing business in such market and various other social and economic factors that may be specific to such market. Further, limitations by the local authorities of repatriation of generated funds may pose a risk to our success in these new markets. Our sales and profit margins may be adversely affected if we fail to provide competitive options in the market or our brands fail to gain acceptability in the market. EMERGING RISKS We analyze reports and insights issued by the World Economic Forum, audit and consulting firms, banks and insurance companies, and investigations on the internet from selected reliable sources, regarding trends for the coming years and main threats and opportunities to be anticipated by pharmaceutical industry. The increasing adoption of AI and generative AI technologies subjects us to evolving operational, regulatory, and competitive risks. Given the relatively recent development of artificial intelligence (“ AI ”) and generative AI and its rapidly evolving nature, new risks and opportunities continue to emerge. AI and generative AI present opportunities to analy z e data, improve performance and productivity and generate business growth, but also pose inherent risks. These include, among others: · AI systems may produce inaccurate, biased, or fabricated outputs that may not be readily detectable, potentially leading to flawed decisions or adverse outcomes in operational or regulatory contexts · AI technologies are increasingly being leveraged to conduct more sophisticated cyber-attacks, and AI systems themselves may be vulnerable to adversarial manipulation or unauthorized data extraction · The use of AI tools could inadvertently lead to disclosure of confidential or proprietary information or raise concerns regarding infringement of third-party intellectual property rights. AI applications involving personal data may implicate data protection laws across multiple jurisdictions in which we operate. · The legal and regulatory landscape governing AI is rapidly evolving. Compliance with new or changing AI-related laws and regulations may impose significant costs, require modifications to our AI applications, or limit our ability to deploy certain AI technologies. The use of AI in GxP-regulated environments may attract additional scrutiny related to validation, explainability, and change control; and · If we are unable to develop or scale AI capabilities as effectively as our competitors, or if competitors secure superior AI models or technology partnerships, we could face a loss of competitive advantage. We have adopted internal governance standards for the responsible use of AI, including evaluation of use cases and their risk-benefit profiles prior to deployment. However, no assurance can be provided that such measures will identify or mitigate all risks associated with AI technologies. 18 RISKS RELATING TO INVESTMENTS IN INDIAN COMPANIES We are an Indian company. Our headquarters are located in India, a substantial part of our operations are conducted in India, and a significant part of our infrastructure and other assets are located in India. In addition, a portion of our total revenues for the year ended March 31, 2026 continued to be derived from sales in India. As a result, the following additional risk factors apply that are not specific to our company or industry. We may be subjected to additional compliance and litigation risks as a result of periodic amendments in certain key Indian regulations, including The Indian Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Foreign Exchange Management Act, 1999 and other laws, regulations, as applicable to our company. As a company that is incorporated in India, we are governed by certain key Indian rules and regulations, including The Companies Act, 2013. Some of the significant changes from The Companies Act, 2013 were in the areas of board and governance processes, boardroom responsibilities, disclosures, corporate social responsibility, audit matters, initiation of class action suits by shareholders or depositors, fraud reporting and whistle-blower mechanisms. In addition, the Securities and Exchange Board of India (“SEBI”) issued the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the “Listing Regulations”) which replaced the former Listing Agreement, that must be followed by all listed Indian public companies. The Listing Regulations were intended to consolidate and streamline the provisions of the then existing listing agreements for different segments of the capital markets (e.g., equity securities, debt securities, Indian depository receipts, etc.). The Listing Regulations have thus been structured to provide ease of reference by consolidating into one single document across various types of securities listed on the stock exchanges. Key features of the Listing Regulations include: · A framework has been prescribed for disclosure of material events and information by listed entities to the Indian stock exchanges. Certain events mentioned in the regulations are deemed material and disclosure is mandatory. Subject companies are also required to make adequate disclosure of events or information which may have material effect. Certain events are to be disclosed based on application of the guidelines for materiality as prescribed. The Board of Directors is required to frame a policy for determination of materiality and disclose the same on the website of the company. · Entities are required to frame policies on preservation of documents, determination of material subsidiaries, risk management, code of conduct, remuneration of directors, key managerial personnel and other employees, board diversity, materiality of related party transactions and dealing with related party transactions, criteria for evaluation of directors, and certain other matters. However, certain provisions of the Companies Act, 2013 and the SEBI Listing Regulations provisions are subject to varying interpretations and their application in practice may evolve over time as additional guidance is provided by regulatory and governing bodies. Further, the Companies Act, 2013, the rules made thereunder and the SEBI Listing Regulations have been and are being amended from time to time. These amendments relate to, among other things, governance, related party transactions, financial reporting, audits and auditors, disclosures and other board and shareholders related matters. All of the foregoing may collectively result in continuing uncertainty regarding compliance matters and higher costs of compliance as a result of ongoing revisions. 19 Risks Relating to our ADSS THAT ARE NOT SPECIFIC TO OUR COMPANY OR INDUSTRY Our principal shareholders have significant influence over us and, if they take actions that are not in the best interests of our minority shareholders, the value of their investment in our ADSs may be harmed. Our full time executive directors and members of their immediate families, in the aggregate, beneficially owned 26.63% of our issued shares as of March 31, 2026 . As a result, these people, acting in concert, are likely to have the ability to exercise significant influence over most matters requiring approval by our shareholders, including the election and removal of directors and significant corporate transactions. This significant influence by these directors and their family members could delay, defer or prevent a change in control, impede a merger, consolidation, takeover or other business combination involving us, or discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us. As a result, the value of the equity shares and/or ADSs of our minority shareholders may be adversely affected or our minority shareholders might be deprived of a potential opportunity to sell their equity shares and/or ADSs at a premium. Fluctuations in our quarterly revenues, operating results and cash flows may adversely affect the trading price of our shares and ADSs. Our quarterly revenues, operating results and cash flows have fluctuated significantly in the past and may fluctuate substantially from quarter to quarter in the future. Such fluctuations result from a variety of factors, including but not limited to changes in demand for our products, timing of regulatory approvals and of launches of new products by us and our competitors (particularly where we obtain the 180-day period of market exclusivity in the United States provided under the Hatch-Waxman Act of 1984), timing of our retailers’ promotional programs and successful development and commercialization of limited competition and complex products. Such fluctuations may result in volatility in the price of our equity shares and our ADSs. In such an event, the trading price of our shares and ADSs may be adversely affected. Negative media coverage and public scrutiny may adversely affect the prices of our equity shares and ADSs. Media coverage, including social media coverage such as blogs, of us has increased dramatically over the past several years. Any negative media coverage, regardless of the accuracy of such reporting, may have an adverse impact on our reputation and investor confidence, resulting in a decline in the share price of our equity shares and our ADSs. Indian law imposes certain restrictions that limit a holder’s ability to transfer the equity shares obtained upon conversion of ADSs and repatriate the proceeds of such transfer, which may cause our ADSs to trade at a premium or discount to the market price of our equity shares. Under certain circumstances, the Reserve Bank of India must approve the sale of equity shares underlying ADSs by a non-resident of India to a resident of India. The Reserve Bank of India has given general permission to effect sales of existing shares or convertible debentures of an Indian company by a resident to a non-resident, subject to certain conditions, including the price at which the shares must be sold. Additionally, except under certain limited circumstances, if an investor seeks to convert the Indian rupee proceeds from sale of equity shares in India into foreign currency and then repatriate that foreign currency from India, he or she will have to obtain an additional approval from the Reserve Bank of India for each such transaction. Required approval from the Reserve Bank of India or any other government agency may not be obtained on terms favorable to a non-resident investor or at all. Investors who exchange our ADSs for our underlying equity shares may be subject to the provisions of the Companies Act, 2013 and to the disclosure obligations that may be necessary pursuant to the deposit agreement with our applicable depositary. The Companies Act, 2013 requires that, where the registered owner of shares does not hold the beneficial interest in such shares, both the registered owner and the beneficial owner of such equity shares are required to disclose to the company the nature of their interest, particulars of the registered owner and certain other details. There are limits and conditions to the deposit of shares into the ADS facility. Indian legal restrictions may limit the supply of our ADSs. The only way to add to the supply of our ADSs will be through a primary issuance because the depositary is not permitted to accept deposits of our outstanding shares and issue ADSs representing those shares. However, an investor in our ADSs who surrenders an ADS and withdraws our shares will be permitted to redeposit those shares in the depositary facility in exchange for our ADSs. In addition, an investor who has purchased our shares in the Indian market will be able to deposit them in the ADS program, but only in a number that does not exceed the number of underlying shares that have been withdrawn from and not re-deposited into the depositary facility. Moreover, there are restrictions on foreign institutional ownership of our equity shares as opposed to our ADSs. The global pandemic, geo-political conflicts, persistently weak global economic and financial environment in many other countries, particularly emerging market countries, and increasing political and social instability could have a material adverse effect on our business and the price and liquidity of our shares and our ADSs. It is uncertain how long the effects of global pandemic, geo-political conflicts, persistently weak global economic and financial environment, and increasing political and social instability in many other countries, particularly emerging market countries will last, or whether economic and financial trends will worsen or improve. These effects could have a material adverse effect on our business and the price and liquidity of our shares and our ADSs. 20 If U.S. investors in our ADSs are unable to exercise preemptive rights available to our non-U.S. shareholders due to the registration requirements of U.S. securities laws, the investment of such U.S. investors in our ADSs may be diluted. A company incorporated in India must offer its holders of shares preemptive rights to subscribe and pay for a proportionate number of shares to maintain their existing ownership percentages prior to the issuance of any shares, unless these rights have been waived by at least 75% of its shareholders present and voting at a shareholders’ general meeting. U.S. investors in our ADSs may be unable to exercise preemptive rights for the shares underlying our ADSs unless a registration statement under the Securities Act of 1933 is effective with respect to the rights or an exemption from the registration requirements of the Securities Act is available. Our decision to file a registration statement will depend on the costs and potential liabilities associated with a registration statement as well as the perceived benefits of enabling U.S. investors in our ADSs to exercise their preemptive rights and any other factors we consider appropriate at the time. We might choose not to file a registration statement under these circumstances. If we issue any of these securities in the future, such securities may be issued to the depositary, which may sell them in the securities markets in India for the benefit of the investors in our ADSs. There can be no assurances as to the value, if any, the depositary would receive upon the sale of these securities. To the extent that U.S. investors in our ADSs are unable to exercise preemptive rights, their proportional interests in us would be reduced. Our equity shares and our ADSs may be subject to market price volatility, and the market price of our equity shares and ADSs may decline disproportionately in response to adverse developments that are unrelated to our operating performance. Market prices for the securities of Indian pharmaceutical companies, including our own, have historically been highly volatile, and the market has from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. Factors such as the following can have an adverse effect on the market price of our ADSs and equity shares: · general market conditions, · speculative trading in our shares and ADSs, and · developments relating to our peer companies in the pharmaceutical industry. Investors who hold our ADSs may not be able to sell their ADSs at or above the price at which they purchased such ADSs. The price of our ADSs fluctuate from time to time, and we cannot predict the price of our ADSs at any given time. The risk factors described herein could also cause the price of our ADSs to fluctuate materially. These broad market and industry factors may materially harm the market price of our ADSs, regardless of our operating performance. In addition, the price of our ADSs may be affected by the valuations and recommendations of the analysts who cover us, and if our results do not meet the analysts’ forecasts and expectations, the price of our ADSs could decline as a result of analysts lowering their valuations and recommendations or otherwise. There may be less company information available in Indian securities markets than securities markets in developed countries. We are incorporated in India, and there are certain differences in the rights and protections of shareholders under the laws of India as compared to the laws of the United States and other developed economies. For example, there is a difference between the level of regulation and monitoring of the Indian securities markets over the activities of investors, brokers and other participants, as compared to the level of regulation and monitoring of markets in such other countries. The Securities and Exchange Board of India is responsible for improving disclosure and other regulatory standards for the Indian securities markets. The Securities and Exchange Board of India has issued regulations and guidelines on disclosure requirements, insider trading and other matters. There may, however, be less publicly available information about Indian companies than is regularly made available by public companies in developed countries, which could affect the market for our equity shares and ADSs. Indian stock exchange closures, broker defaults, settlement delays, and Indian Government regulations on stock market operations could affect the market price and liquidity of our equity shares. The Indian securities markets are smaller than the securities markets in the United States and Europe and have experienced volatility from time to time. The regulation and monitoring of the Indian securities market and the activities of investors, brokers and other participants differ, in some cases significantly, from those in the United States and some European countries. Indian stock exchanges have at times experienced problems, including temporary exchange closures, broker defaults and settlement delays and if similar problems were to recur, they could affect the market price and liquidity of the securities of Indian companies, including our shares. Furthermore, any change in Indian Government regulations of stock markets could affect the market price and liquidity of our equity shares and ADSs. 21 Sale of our equity shares may adversely affect the prices of our equity shares and ADSs. The Government of India’s Depository Receipts Scheme, 2014, permits liberalized rules for sponsored and unsponsored secondary market issue of depository receipts, subject to the existing sectorial cap on foreign investment. Under the regulations implemented, an Indian company’s equity shares can be freely issued to a depository for the purpose of issuing depository receipts through any mode permissible for the issue of such securities to other investors. This enables us to more readily issue shares to the depositary for our ADSs and conduct U.S. securities issuances of our ADSs, which may impact the share price and available float in Indian stock exchanges as well as the price and availability of our ADSs on the NYSE. Refer to Item 10.D. of this report under “Exchange controls – ADS guidelines” for further details. Further, the SEBI introduced a detailed framework for issuance of Depository Receipts (“DRs”) by a company incorporated and listed on a recognized stock exchange in India pursuant to its circular dated October 10, 2019. The framework inter alia sets out eligibility requirements, permissible jurisdictions, international exchanges, and permissible holder of DRs, as well as certain other obligations to be complied with by issuers of DRs, the Indian depository, the foreign depository and the domestic custodian. Further, pursuant to its circular dated November 28, 2019 and December 18, 2020, the SEBI gave notice of the permissible jurisdictions for listing of DRs and amended the scope and process for permissible holders of DRs, respectively. The price of our ADSs and the U.S. dollar value of any dividends we declare may be negatively affected by fluctuations in the U.S. dollar to Indian rupee exchange rate. Our ADSs trade on the NYSE in U.S. Dollars. Since the equity shares underlying the ADSs are listed in India on the BSE and the NSE and trade in Indian Rupees, the value of our ADSs may be affected by exchange rate fluctuations between the U.S. dollar and the Indian Rupee. In addition, dividends declared, if any, are denominated in Indian Rupees, and therefore the value of the dividends received by the holders of ADSs in U.S. Dollars will be affected by exchange rate fluctuations. 22

​ ​​​​​​ 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.

Overview We are an integrated global pharmaceutical company committed to accelerating access to affordable and innovative medicines. We derive our revenues from the sale of finished dosage forms, active pharmaceutical ingredients and intermediates, development and manufacturing services provided to innovator pharmaceutical and biotechnology companies, and license fees from marketing authorizations for our products. The Chief Operating Decision Maker (“CODM”) evaluates our performance and allocates resources based on an analysis of various performance indicators by operating segments. The CODM reviews revenues and gross profit as the performance indicator for all of the operating segments, and does not review the total assets and liabilities of an operating segment. Our Chief Executive Officer (“CEO”) is the CODM of our company. Our reportable operating segments are as follows: · Global Generics; · Pharmaceutical Services and Active Ingredients; and · Others. Global Generics. This segment consists of our business of manufacturing and marketing prescription and over-the-counter finished pharmaceutical products ready for consumption by the patient, marketed under a brand name (branded formulations) or as generic finished dosages with therapeutic equivalence to branded formulations (generics). This segment includes the operations of our biologics business, and the portfolio of consumer healthcare brands in the Nicotine Replacement Therapy category (the “NRT Business”). 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. The measurement of each segment’s revenues, expenses and assets is consistent with the accounting policies that are used in preparation of our consolidated financial statements. 48 Critical Accounting Policies Critical accounting policies are defined as those that in our view are the most important to the portrayal of our financial condition and results and that require the most exercise of management’s judgment. We consider the policies discussed under the following paragraphs to be critical for an understanding of our financial statements. The basis for preparation of our financial statements, accounting policies and application of these are discussed in detail in Notes 2, 3 and 4 to our consolidated financial statements. Accounting estimates and judgments While preparing financial statements in conformity with IFRS, we make certain estimates and assumptions that require difficult, subjective and complex judgments. These judgments affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses, the accompanying disclosures, and the disclosure of contingent liabilities at the statement of financial position date and the reported amount of income and expenses for the reporting period. Financial reporting results rely on our estimate of the effect of certain matters that are inherently uncertain. Future events rarely develop exactly as forecast and the best estimates require adjustments, as actual results may differ from these estimates under different assumptions or conditions. We continually evaluate these estimates and assumptions based on the most recently available information. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Refer to Note 2(d) (“Use of judgements, estimates and assumptions”) in our consolidated financial statements for information about significant areas of estimation uncertainty and critical judgments. Accounting policy relating to Revenue from contracts with customers Our revenue is derived from sales of goods, service income and income from licensing arrangements. Most of such revenue is generated from the sale of goods. We have generally concluded that we are the principal in our revenue arrangements. Accounting policies relating to revenues are as follows: Sale of goods Revenue is recognized when the control of the goods has been transferred to a third party. This is usually when the title passes to the customer, either upon shipment or upon receipt of goods by the customer, as per the terms agreed upon with the customer. At that point, the customer has full discretion over the channel and price to sell the products, and there are no unfulfilled obligations that could affect the customer’s acceptance of the product. Revenue from the sale of goods is measured at the transaction price which is the consideration received or receivable, net of expected returns, taxes and applicable trade discounts and allowances. Revenue includes shipping and handling costs billed to the customer, since we act as a principal in rendering those services. In arriving at the transaction price, we consider the terms of the contract with the customers and our customary business practices. The transaction price is the amount of consideration we are entitled to receive in exchange for transferring promised goods or services, excluding amounts collected on behalf of third parties. The amount of consideration varies because of estimated rebates, returns and chargebacks, which are considered to be key estimates. Any amount of variable consideration is recognized as revenue only to the extent that it is highly probable that a significant reversal will not occur. We estimate the amount of variable consideration using the expected value method. Presented below are the points of recognition of revenue with respect to our sales of goods: Particulars Point of recognition of revenue Sales of generic products in India Control is transferred upon delivery of products to distributors by clearing and forwarding agents. Sales of active pharmaceutical ingredients and intermediates in India Upon delivery of products to customers, unless the terms of the applicable contract provide for specific revenue generating activities to be completed, in which case revenue is recognized once all such activities are completed. Export sales and other sales outside of India Upon delivery or dispatch of products to customers, subject to the terms of the applicable contract. 49 Profit share revenues From time to time, we enter into marketing arrangements with certain business partners for the sale of our products in certain markets. Under such arrangements, we sell our products to the business partners at a non-refundable base purchase price agreed upon in the arrangement and are also entitled to a profit share which is over and above the base purchase price. The profit share is typically dependent on the business partner’s ultimate net sale proceeds or net profits, subject to any reductions or adjustments that are required by the terms of the arrangement. Such arrangements typically require the business partner to provide confirmation of units sold and net sales or net profit computations for the products covered under the arrangement. Revenue in an amount equal to the base sale price is recognized in these transactions upon delivery of products to the business partners. An additional amount representing the profit share component is recognized as revenue only to the extent that it is highly probable that a significant reversal will not occur. At the end of each reporting period, we update the estimated transaction price (including updating our assessment of whether an estimate of variable consideration is constrained) to represent faithfully the circumstances present at the end of the reporting period and the changes in circumstances during the reporting period. Out licensing arrangements, milestone payments and royalties Our revenues include amounts derived from product out-licensing agreements. These arrangements typically consist of an initial up-front payment received on inception of the license and subsequent payments dependent on achieving certain milestones in accordance with the terms prescribed in the agreement. In cases where the transaction has two or more performance obligations, we account for the completed obligation (for example the transfer of title) as a separate unit of accounting and record revenue upon delivery of that component, provided that we can make a reasonable estimate of the fair value of the undelivered component. Otherwise, non-refundable up-front license fees received in connection with product out-licensing agreements are deferred and recognized over the balance period in which we have pending performance obligations. Milestone payments which are contingent on achieving certain clinical milestones are recognized as revenues on achievement of such milestones, or over the performance period depending on the terms of the contract. If milestone payments are creditable against future royalty payments, the milestones are deferred and released over the period in which the royalties are anticipated to be paid. Royalty income earned through a license is recognized when the underlying sales have occurred . Provision for chargeback, rebates, sales returns and discounts In our North America Generics business, our gross revenues are significantly reduced by chargebacks, rebates, sales returns, discounts, shelf stock adjustments, Medicaid payments and similar “gross-to-net” adjustments. Each of such adjustments are discussed in detail below. · Chargebacks: Chargebacks are issued to wholesalers for the difference between our invoice price to the wholesaler and the contract price through which the product is resold in the retail part of the supply chain. The information that we consider for establishing a chargeback accrual includes the historical average chargeback rate over a period of time, current contract prices with wholesalers and other customers, and estimated inventory holding by the wholesaler. With this methodology, we believe that the results are more realistic and closest to the potential chargeback claims that may be received in the future period relating to inventory on which a claim is yet to be received as at the end of the reporting period. In addition, as part of our book closure process, a chargeback validation is performed in which we track and reconcile the volume of inventory for which we should carry an appropriate provision for chargeback. We procure the inventory holding statements and data from our wholesalers (representing approximately 99% of the total value of chargebacks outstanding at every year end reporting date) as part of this reconciliation. On the basis of this volume reconciliation, chargeback accrual is validated. For the chargeback rate computation, we consider different contract prices for each product across our customer base. This chargeback rate is adjusted (if necessary) on a periodic basis for expected future price reductions. · Shelf Stock Adjustments: Shelf stock adjustments are credits issued to customers to reflect decreases in the selling price of products sold by us, and accruals for shelf stock adjustments depend on future events upon material right obtained by customer when the prices of certain products decline as a result of price competition, new competitive launches or otherwise. These credits are customary in the pharmaceutical industry, and are intended to reduce the customer inventory cost to better reflect the current market prices. The determination to grant a shelf stock adjustment to a customer is based on the terms of the applicable contract, which may or may not specifically limit the age of the stock on which a credit would be offered. · Rebates: Rebates (direct and indirect) are generally provided to customers as an incentive to stock and sell our products. Rebate amounts are based on a customer’s purchases made during an applicable period. Rebates are deductions based on contractual obligations, and include direct rebates, indirect rebates and other pricing adjustments paid to wholesalers, chain drug stores, health maintenance organizations or pharmacy buying groups under a contract with us. We determine our estimates of rebate accruals primarily based on the contracts entered into with our wholesalers and other direct customers and the information received from them for secondary sales made by them. For direct rebates, liability is accrued whenever we invoice to direct customers. For indirect rebates, the accruals are based on a representative weighted average percentage of the contracted rebate amount applied to inventory sold and delivered by us to wholesalers or other direct customers. 50 · Refund Liability: We account for sales returns accrual by recording refund liability concurrent with the recognition of revenue at the time of a product sale. This liability is based on our estimate of expected sales returns. We deal in various products and operate in various markets. Accordingly, our estimate of sales returns is determined primarily by our historical experience in the applicable market in which we operate. With respect to established products, we determine an estimate of sales returns provision primarily based on historical experience of the actual sales returns. Additionally, other factors that we consider in determining the estimate include levels of inventory in the distribution channel, estimated shelf life, any revision in the shelf life of the product, product discontinuances, price changes of competitive products, and introduction of competitive new products, to the extent each of these factors impact our business and markets. We consider all of these factors and adjust the sales return provision to reflect our actual experience. With respect to new products introduced by us, those have historically been either extensions of an existing product line where we have historical experience or in a general therapeutic category where established products exist and are sold either by us or our competitors. We have not yet introduced products in a new therapeutic category where the sales returns experience of such products by us or our competitors (as we understand based on industry publications) is not known. The amount of sales returns for our newly launched products has not historically differed significantly from the sales returns experience of the then current products marketed by us or our competitors (as we understand based on industry publications). Accordingly, we do not expect sales returns for new products to be significantly different from expected sales returns of current products. We evaluate sales returns of all our products at the end of each reporting period and record necessary re-measurements to the refund liability and related asset, if any. · Medicaid: We estimate the portion of our sales that may get dispensed to customers covered under Medicaid programs based on the proportion of units sold in the previous two quarters for which a Medicaid claim could be received as compared to the total number of units sold in the previous two quarters. The proportion is based on an analysis of the actual Medicaid claims received for the preceding four quarters. In addition, we also apply the same percentage on the derived estimated inventory sold and delivered by us to our wholesalers and other direct customers to arrive at the potential volume of products on which a Medicaid claim could be received. We use this approach because we believe that it corresponds to the approximate six-month time period it takes for us to receive claims from the various Medicaid programs. After estimating the number of units on which a Medicaid claim is to be paid, we use the latest available Medicaid reimbursement rate per unit to calculate the Medicaid accrual. In the case of new products, accruals are done based on specific inputs from our marketing team or data from the publications of IQVIA. · Cash Discounts: We offer cash discounts to our customers, on a selective basis and in line with industry practice, to encourage prompt payment. Accruals for such cash discounts do not involve any significant variables. These are accrued for at the time of invoicing and adjusted subsequently to reflect the actual experience. We believe our estimation processes are reasonable methods of determining accruals for the “gross-to-net” adjustments. Chargeback accrual accounts for the highest element among the “gross-to-net” adjustments, and constituted approximately 86% of such “gross-to-net” adjustments for our North America Generics business for the year ended March 31, 2026. For the purpose of the following discussion, we are therefore restricting our explanations to this specific element. While chargeback accruals depend on multiple variables, the most pertinent variables are our estimates of inventories on which a chargeback claim is yet to be received and the unit price at which the chargeback will be processed. To determine the chargeback accrual applicable for a reporting period, we perform the following procedures to calculate these two variables: a) Estimated inventory—Inventory volumes on which a chargeback claim that is expected to be received in the future are determined using the validation process and methodology described above (see “Chargebacks” above). When such a validation process is performed, we note that the difference represents an immaterial variation. Therefore, we believe that our estimation process regarding this variable is reasonable. b) Unit pricing rate—At any point in time, inventory volumes on which we carry our chargeback accrual represents approximately 1.0 to 1.4 month of sales volumes. Therefore, the sensitivity of price changes on our chargeback accrual only relates to such volumes. Assuming that the chargebacks were processed within such period, we analyzed the impact of changes of prices for the periods beginning April 1, 2025, 2024 and 2023, respectively, and ended March 31, 2026, 2025 and 2024, respectively, on our estimated inventory levels computed based on the methodology described above (see “Chargebacks” above). The impact on net sales on account of such price variation may not be significant. 51 A roll-forward for each major accrual for our North America Generics business is presented below for our fiscal years ended March 31, 2024, 2025 and 2026: Particulars Chargebacks Rebates Medicaid Refund Liability(3) (All amounts in U.S.$ million) Beginning Balance: April 1, 2023 247 87 13 35 Current provisions relating to sales during the year 2,844 322 31 21 Provisions and adjustments relating to sales in prior years * - - - Credits and payments** (2,803 ) (307 ) (25 ) (21 ) Ending Balance: March 31, 2024 288 102 19 35 Beginning Balance: April 1, 2024 288 102 19 35 Current provisions relating to sales during the year (1) 2,720 253 23 34 Provisions and adjustments relating to sales in prior years -* -* -* -* Credits and payments** (2,665 ) (252 ) (29 ) (27 ) Ending Balance: March 31, 2025 343 103 13 42 Beginning Balance: April 1, 2025 343 103 13 42 Current provisions relating to sales during the year (2) 2,439 226 24 38 Provisions and adjustments relating to sales in prior years -* -* -* -* Credits and payments** (2,506 ) (237 ) (27 ) (33 ) Ending Balance: March 31, 2026 276 92 10 47 * Currently, we do not separately track provisions and adjustments, in each case to the extent relating to prior years for chargebacks. However, the adjustments are expected to be non-material. The volumes used to calculate the closing balance of chargebacks represent approximately 1.0 to 1.4 months equivalent of sales, which corresponds to the pending chargeback claims yet to be processed. ** Currently, we do not separately track the credits and payments, in each case to the extent relating to prior years for chargebacks, rebates, Medicaid payments or refund liability. (1) Chargebacks provisions and payments for the year ended March 31, 2025 were each lower as compared to the year ended March 31, 2024, primarily as a result of reduction in the invoice price to wholesalers for few of our major products. This was offset to some extent due to higher pricing rates per unit on chargebacks, on account of reductions in the contract prices through which the product is resold in the retail part of the supply chain for certain of our products. (2) Chargebacks provisions and payments for the year ended March 31, 2026 were each lower as compared to the year ended March 31, 2025, primarily as a result of reduction in the invoice price to wholesalers for few of our major products. This was offset to some extent due to higher pricing rates per unit on chargebacks, on account of reductions in the contract prices through which the product is resold in the retail part of the supply chain for certain of our products. (3) Our overall provision for refund liability as of March 31, 2026 relating to our North America Generics business was U.S.$47, compared to a liability of U.S.$42 as of March 31, 2025. The refund liability created for new product launches and volume growth, were off-set by the reductions in the contract prices and by product mix changes. The estimates of “gross-to-net” adjustments for our operations in India and other countries outside of the United States relate mainly to refund liability in all such operations, and certain rebates to healthcare insurance providers are specific to our German operations. The pattern of such refund liability is generally consistent with our gross sales. In Germany, the rebates to healthcare insurance providers mentioned above are contractually fixed in nature and do not involve significant estimations by us. Services Revenue from services rendered, which primarily relate to contract research, is recognized in the consolidated income statement as the underlying services are performed. Upfront non-refundable payments received under these arrangements are deferred and recognized as revenue over the expected period over which the related services are expected to be performed. 52 License fees License fees primarily consist of income from the out-licensing of intellectual property, and other licensing and supply arrangements with various parties. Revenue from license fees is recognized when control transfers to the third party and our performance obligations are satisfied. Some of these arrangements include certain performance obligations by us. Revenue from such arrangements is recognized in the period in which we complete all of our performance obligations. For other details on our material accounting policies, please refer to Note 3 of our consolidated financial statements. 5.A. Operating results Income Statement Data For the year ended March 31, 2026 2026 2025 2024 (Rs. in millions, U.S.$ in millions) Convenience translation into U.S.$ Revenues U.S.$ 3,580 Rs. 335,933 Rs. 325,535 Rs. 279,164 Cost of revenues 1,691 158,669 135,107 115,557 Gross profit 1,889 177,264 190,428 163,607 Selling, general and administrative expenses 1,137 106,763 93,870 77,201 Research and development expenses 256 24,058 27,380 22,873 Impairment of non-current assets, net 38 3,519 1,693 3 Other income, net (81) (7,627 ) (4,358 ) (4,199 ) Results from operating activities 539 50,551 71,843 67,729 Finance income, net 44 4,132 4,724 3,994 Share of profit of equity accounted investees, net of tax 1 134 217 147 Profit before tax 584 54,817 76,784 71,870 Tax expense, net 132 12,351 19,539 16,186 Profit for the year U.S.$ 452 Rs. 42,466 Rs. 57,245 Rs. 55,684 Attributable to: Equity holders of the parent company U.S.$ 457 Rs. 42,850 Rs. 56,544 Rs. 55,684 Non-controlling interests (4) (384 ) 701 - The following table sets forth, for the periods indicated, financial data as percentages of total revenues and the increase (or decrease) by item as a percentage of the amount over the comparable period in the previous years. Percentage of Sales Percentage For the year ended March 31, Increase/(Decrease) 2026 2025 2024 2025 to 2026 2024 to 2025 Revenues 100.0 % 100.0 % 100.0 % 3.2 % 16.6 % Gross profit 52.8 % 58.5 % 58.6 % (6.9 %) 16.4 % Selling, general and administrative expenses 31.8 % 28.8 % 27.7 % 13.7 % 21.6 % Research and development expenses 7.2 % 8.4 % 8.2 % (12.1 %) 19.7 % Impairment of non-current assets 1.0 % 0.6 % 0.0 % 107.9 56,333.3 % Other income, net (2.3 %) (1.3 %) (1.5 %) 75.0 3.8 % Results from operating activities 15.0 % 22.0 % 24.3 % (29.6 ) 6.1 % Finance income, net 1.2 % 1.5 % 1.4 % (12.5 ) 18.3 % Share of profit of equity accounted investees, net of tax 0.0 % 0.1 % 0.1 % (38.2 ) 47.6 % Profit before tax 16.3 % 23.6 % 25.7 % (28.6 ) 6.8 % Tax expense, net 3.7 % 6.0 % 5.8 % (36.8 ) 20.7 % Profit for the year 12.6 % 17.6 % 19.9 % (25.8 ) 2.8 % Attributable to: Equity holders of the parent company 12.8 % 17.4 % 19.9 % (24.2 %) 1.5 % Non-controlling interests (0.1 %) 0.2 % - (154.8 %) - 53 The following table sets forth, for the periods indicated, our consolidated revenues by segment: For the year ended March 31, 2026 2025 2024 (Rs. in millions) Revenues % of Segment revenue Revenues % of Segment revenue Revenues % of Segment revenue Global Generics Rs. 299,033 89 % Rs. 289,552 89 % Rs. 245,453 88 % PSAI 34,773 10 % 33,846 10 % 29,801 11 % Others 2,127 1 % 2,137 1 % 3,910 1 % Total Rs. 335,933 100 % Rs. 325,535 100 % Rs. 279,164 100 % Fiscal Year Ended March 31, 2026 compared to Fiscal Year Ended March 31, 2025 Revenues Our overall consolidated revenues were Rs.335,933 million for the year ended March 31, 2026, an increase of 3%, as compared to Rs.325,535 million for the year ended March 31, 2025. Excluding the impact of exchange rate fluctuations of the Indian rupee against the currencies in the markets in which we operate, such revenues declined by 2% during the year ended March 31, 2026. This decrease was primarily on account of net decrease in sales prices of certain of our existing products including Lenalidomide in the United States. The following table sets forth, for the periods indicated, our consolidated revenues by geography: For the year ended March 31, 2026 2025 2024 Revenues % of Total Revenue* Revenues % of Total Revenue* Revenues % of Total Revenue* (Rs. in millions) Global Generics Rs. 299,033 89 % Rs. 289,552 89 % Rs. 245,453 88 % North America (the United States and Canada) 113,737 38 % 145,164 50 % 129,895 53 % Europe 55,501 ^ 19 % 35,882 ^ 12 % 20,511 8 % India 62,186 21 % 53,734 19 % 46,407 19 % Russia 34,786 12 % 25,958 9 % 22,301 9 % Other countries of the former Soviet Union and Romania 9,074 3 % 8,920 3 % 8,626 4 % Rest of the World 23,749 8 % 19,894 7 % 17,713 7 % PSAI 34,773 10 % 33,846 10 % 29,801 11 % Others 2,127 1 % 2,137 1 % 3,910 1 % Total Rs. 335,933 100 % Rs. 325,535 100 % Rs. 279,164 100 % * Percentages mentioned against the segments are with reference to the total revenue of our company; and percentages mentioned against geographies represent the sales in the respective geography as a percentage of the total revenue from that segment. ^ Includes revenues of Rs.28,189 million for the year ended March 31, 2026 and Rs.12,020 million for the year ended March 31, 2025 from the global portfolio outside of the United States of consumer brands in the Nicotine Replacement Therapy category acquired from Haleon UK Enterprises Limited (the “NRT Business”). For the year ended March 31, 2026, the average exchange rate of the U.S. dollar appreciated by 4.5%, that of the Euro appreciated by 12.8%, and that of the Russian rouble appreciated by 21.8%, against the Indian rupee compared to the year ended March 31, 2025. These changes in exchange rates on an overall basis increased our reported revenues. 54 Segment analysis Global Generics Revenues from our Global Generics segment were Rs.299,033 million for the year ended March 31, 2026, an increase of 3% 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). Excluding the impact of exchange rate fluctuations of the Indian rupee against the currencies in the markets in which we operate, such revenues declined by 2% during the year ended March 31, 2026, primarily on account of the following factors: · a decrease of approximately 10% resulting from the net impact of changes in sales prices of certain of our existing products in this segment, including the impact of the shelf stock adjustment claim (“SSA Claim”) following a reduction in the price of our generic product Lenalidomide in the United States; the foregoing was partially offset by · an increase of approximately 5% resulting from a net increase in the sales volumes of certain of our existing products in this segment; and · an increase of approximately 3% resulting from additional revenues from new products launched between April 1, 2025 and March 31, 2026. North America (the United States and Canada): Our Global Generics segment’s revenues from North America were Rs.113,737 million for the year ended March 31, 2026, a decrease of 22% compared to Rs.145,164 million for the year ended March 31, 2025. In U.S. dollar absolute currency terms (i.e., U.S. dollars without taking into account the effect of currency exchange rates), such revenues decreased by 24% for the year ended March 31, 2026, compared to the year ended March 31, 2025. This revenue decrease was largely attributable to a net decrease in the sales prices of certain of our existing products, including the impact of the SSA Claim. During the year ended March 31, 2026, we launched 25 new products in North America and made 15 new ANDA filings with the U.S. FDA. As of March 31, 2026, our cumulative ANDA filings were 339. As of March 31, 2026, we had 77 filings pending approval with the U.S. FDA (75 ANDAs and two NDAs under the 505(b)(2) route), including 21 tentative approvals. Of the 77 filings which are pending approval, 44 are Para graph IV filings, and we believe that we are the first to file with respect to 22 of these filings. Europe: Our Global Generics segment’s revenues from Europe are primarily derived from Germany, the United Kingdom, Italy, Spain and France as well as the NRT Business. Such revenues from Europe were Rs.55,501 million for the year ended March 31, 2026, an increase of 55% compared to Rs.35,882 million for the year ended March 31, 2025. Excluding the impact of exchange rate fluctuations of the Indian rupee against the currencies in the markets in which we operate, the foregoing increase was primarily on account of inclusion of revenues from the NRT Business for the full year ended March 31, 2026 as compared to revenues for the period subsequent to the acquisition during the year ended March 31, 2025, a net increase in sales volumes of certain of our existing products and additional revenues from new products launched between April 1, 2025 and March 31, 2026, all of which were partially offset by price erosion in certain of our existing products. During the year ended March 31, 2026, we launched 38 new products in Europe (excluding the NRT Business). India: Our Global Generics segment’s revenues from India were Rs.62,186 million for the year ended March 31, 2026, an increase of 16% compared to Rs.53,734 million for the year ended March 31, 2025. This increase in revenues was largely attributable to a net increase in the sales prices and volumes of certain of our existing products . According to IQVIA in its Moving Annual Total report for the year ended March 31, 2026, our secondary sales in India grew by 12.1% during such period, compared to the India pharmaceutical market’s growth of 9.9% during the same period. During the year ended March 31, 2026, we launched 28 new brands in India . Emerging Markets : Our Global Generics segment’s re venues from “Emerging Markets” (which is comprised of Russia, other countries of the former Soviet Union, Romania and certain other countries from our “Rest of the World” markets, including Brazil, South Africa, Colombia, Vietnam, and China) were Rs.67,608 million for the year ended March 31, 2025, an increase of 23% compared to compared to Rs.54,772 million for the year ended March 31, 2025. Excluding the impact of exchange rate fluctuations of the Indian rupee against multiple currencies in the markets in which we operate, the foregoing increase was largely attributable to a net increase in sales volumes of certain of our existing products and additional revenues from new products launched between April 1, 2025 and March 31, 2026. During the year ended March 31, 2026, we launched 179 new products across geographies in Emerging Markets. 55 Russia: Our Global Generics segment’s re venues from Russia were Rs.34,786 million for the year ended March 31, 2026 , an increase of 34% compared to Rs.25,958 million for 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 increased by 15% for the year ended March 31, 2026, compared to the year ended March 31, 2025. This increase in absolute currency terms was largely attributable to a net increase in sales prices and volumes of certain of our existing products and to additional revenues from new products launched between April 1, 2025 and March 31, 2026 . Our over-the-counter (“OTC”) division’s revenues from Russia for the year ended March 31, 2025 were approximately 54% of our total revenues from Russia in this segment. According to IQVIA, as per its report for the year ended March 31, 2026 , our sales value (in Russian roubles) growth and volume growth from Russia for such period, as compared to the Russian pharmaceutical market was as follows: Year ended March 31, 2026 Increase /(Decrease) Dr. Reddy's Russian pharmaceutical market Sales value Volume Sales value Volume Prescription (Rx) 11.0 % 3.0 % 17.0 % 2.1 % Over-the-counter (OTC) 8.8 % 2.3 % 6.6 % (4.5 )% Total (Rx + OTC) 10.0 % 2.7 % 12.1 % (2.0 )% As per the above referenced IQVIA report, our market shares in Russia for the years ended March 31, 2026 and March 31, 2025 were as follows: Year ended March 31, Volume based Value based 2026 2025 2026 2025 Prescription (Rx) 3.8 % 3.8 % 1.8 % 1.9 % Over-the-counter (OTC) 1.7 % 1.6 % 1.9 % 1.8 % Total (Rx + OTC) 2.5 % 2.4 % 1.8 % 1.8 % Other countries of the former Soviet Union and Romania: Our Global Generics segment’s revenues from other countries of the former Soviet Union and Romania were Rs.9,074 million for the year ended March 31, 2026 , an increase of 2% compared to Rs.8,920 million for the year ended March 31, 2025. Excluding the impact of exchange rate fluctuations of the Indian rupee against the currencies in the markets in which we operate, the foregoing revenues declined for the year ended March 31, 2026, primarily on account of a net decrease in the sales volumes of certain of our existing products . “Rest of the World” Markets : We refer to all markets of this segment, other than North America, Europe, Russia and other countries of the former Soviet Union, Romania and India, as our “Rest of the World” markets. Our Global Generics segment’s revenues from our “Rest of the World” markets were Rs.23,749 million for the year ended March 31, 2026, an increase of 19% compared to Rs.19,894 million for the year ended March 31, 2025. Excluding the impact of exchange rate fluctuations of the Indian rupee against the currencies in the markets in which we operate, the foregoing increase is largely attributable to a net increase in the sales volumes of certain of our existing products and additional revenues from new products launched between April 1, 2025 and March 31, 2026 , both of which were partially offset by a net decrease in the sales prices of certain of our existing products. Pharmaceutical Services and Active Ingredients (“PSAI”) Our PSAI segment’s revenues were Rs.34,773 million for the year ended March 31, 2026, an increase of 3% compared to Rs.33,846 million for the year ended March 31, 2025. Excluding the impact of exchange rate fluctuations of the Indian rupee against the currencies in the markets in which we operate, the forgoing revenues declined by 1% for the year ended March 31, 2026, largely on account of a net decrease in sales prices of certain of our existing products. During the year ended March 31, 2026, we filed 128 Drug Master Files (“DMFs”) worldwide. Cumulatively, our total active worldwide DMFs as of March 31, 2026, were 1,748, including 280 active DMFs in the United States. Gross Profit Our total gross profit was Rs.177,264 million for the year ended March 31, 2026, representing 52.8% of our revenues for that period, compared to Rs.190,428 million for the year ended March 31, 2025 , representing 58.5% of our revenues for that period. 56 The following table sets forth, for the period indicated, our gross profit by segment: For the year ended March 31, 2026 2025 2024 (Rs. in millions) Gross Profit % of Segment Revenue Gross Profit % of Segment Revenue Gross Profit % of Segment Revenue Global Generics Rs. 169,698 56.7 % 179,606 62.0 % Rs. 154,268 62.9 % PSAI 5,984 17.2 % 9,157 27.1 % 6,919 23.2 % Others 1,582 74.4 % 1,665 77.9 % 2,420 61.9 % Total Rs. 177,264 52.8 % Rs. 190,428 58.5 % Rs. 163,607 58.6 % The gross profit as a percentage of revenue from our Global Generics segment decreased to 56.7% for the year ended March 31, 2026, from 62.0% for the year ended March 31, 2025. This decrease was largely on account of price erosion in certain of our existing products, including the impact of the SSA Claim. The gross profit as a percentage of revenue from our PSAI segment decreased to 17.2% for the year ended March 31, 2026, from 27.1% for the year ended March 31, 2025. This decrease was primarily on account of lower operating leverage during the year ended March 31, 2026, as compared to the year ended March 31, 2025, unfavorable changes in our product mix (i.e., a decrease in the proportion of our profits from products with higher profit margins and an increase in the proportion from products with lower profit margins) and price erosion in certain of our existing products. Selling, general and administrative expenses Our selling, general and administrative expenses were Rs.106,763 million for the year ended March 31, 2026, an increase of 14% compared to Rs.93,870 million for the year ended March 31, 2025. This increase was largely attributable to the following: · an increase of 8% on account of higher sales and marketing expenses, including a provision related to a field tax audit report from the Federal Tax Service authority in respect of one of our foreign subsidiaries (as described in Note 31 of these consolidated financial statements); · an increase of 5% on account of increased personnel costs including incremental cost towards employee benefits arising from the implementation of New Labour Codes in India (as described in Note 26 of these consolidated financial statements) as well as on account of annual raises and new hires; · an increase of 3% due to higher spending on other costs, including travel expenses, depreciation and amortization; and · the foregoing were partially offset by a decrease of 2% on account of lower legal and professional fees and freight outward expenses. As a proportion of our total revenues, our selling, general and administrative expenses were higher at 31.8% for the year ended March 31, 2026, compared to 28.8% for the year ended March 31, 2025. Research and development expenses Our research and development expenses were Rs.24,058 million for the year ended March 31, 2026, a decrease of 12% compared to Rs.27,380 million for the year ended March 31, 2025. This decrease was primarily on account of lower development expenditures on certain products in our Global Generics segment, including our biosimilars business as well as in our PSAI segment. As a proportion of our total revenues, our research and development expense were lower at 7.2% for the year ended March 31, 2026, compared to 8.4% for the year ended March 31, 2025. Impairment of non-current assets Impairment of non-current assets were Rs.3,519 million for the year ended March 31, 2026, compared to Rs.1,693 million for the year ended March 31, 2025. The impairment charge for the year ended March 31, 2026 was higher on account of · discontinuation of certain of the research and development programs associated with our Chimeric Antigen Receptor T cell (CAR T) therapy portfolio resulting in an impairment of Rs.1,291 million; and · impairment of intangible related to Eftilagimod Alfa pursuant to discontinuation of the Phase III study in first line non‑small cell lung cancer following the results of a futility analysis, resulting in an impairment of Rs.914 million. Please refer to Note 11 (“Property, plant and equipment”) and Note 13 (“Other intangible assets”) of our consolidated financial statements for further details. Other income, net Our other income, net was Rs.7,627 million for the year ended March 31, 2026, an increase of 75% compared to Rs.4,358 million for the year ended March 31, 2025. Our other income for the year ended March 31, 2026 was higher largely on account of gain on sale of non-current assets of Rs.1,890 million towards divestment of certain product related intangibles (i.e., trademarks). Please refer to Note 22 (“Other income, net”) of our consolidated financial statements for further details. Finance income, net Our finance income, net was lower at Rs.4,132 million for the year ended March 31, 2026, as compared to Rs.4,724 million for the year ended March 31, 2025. This decrease in net finance income was largely attributable to: · a decrease in fair value changes and profit on sale of financial instruments measured at FVTPL, net of Rs. 2,359 million for the year ended March 31, 2026, compared to fair value changes and profit on sale of financial instruments measured at FVTPL, net of Rs.3,544 million for the year ended March 31, 2025; partially offset by · higher net foreign exchange gains of Rs.1,785 million for the year ended March 31, 2026, compared to Rs.1,322 million for the year ended March 31, 2025; and · lower net interest expense of Rs.12 million for the year ended March 31, 2025, compared to Rs.152 million for the year ended March 31, 2025. 57 Profit before tax As a result of the above, our profit before taxes was Rs.54,817 million for the year ended March 31, 2026, a decrease of 29% compared to Rs.76,784 million for the year ended March 31, 2025. Tax expense Our consolidated weighted average tax rate was 22.5% for the year ended March 31, 2026, compared to 25.4% for the year ended March 31, 2025. Our tax expense was Rs.12,351 million for the year ended March 31, 2026, compared to Rs.19,539 million for the year ended March 31, 2025. Please refer to Note 24 (“Income taxes”) of our consolidated financial statements for further details. Profit for the year As a result of the above, our net profit was Rs.42,466 million for the year ended March 31, 2026, representing 12.6% of our total revenues for such year, compared to Rs.57,245 million for the year ended March 31, 2025, representing 17.6% of our total revenues for such year. Profit after tax attributable to the equity holders of the parent company was Rs.42,850 million for the year ending March 31, 2026, representing 12.8% of our total revenues for such period, compared to Rs.56,544 million for the year ending March 31, 2025, representing 17.4% of our total revenues for such period. Fiscal Year Ended March 31, 2025 compared to Fiscal Year Ended March 31, 2024 Refer to Item 5.A. of our Annual Report on Form 20-F for the fiscal year ended March 31, 2025. Fiscal Year Ended March 31, 2024 compared to Fiscal Year Ended March 31, 2023 Refer to Item 5.A. of our Annual Report on Form 20-F for the fiscal year ended March 31, 2024. 5.B. Liquidity and capital resources Liquidity and working capital We manage our liquidity by ensuring, to the extent possible, that we will always have sufficient liquidity to meet our liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to our reputation. We have primarily financed our operations through cash flows generated from operations and a mix of long-term and short-term borrowings. Our principal liquidity and capital needs are for the purchase of property, plant and equipment, regular business operations and research and development. Our principal sources of short-term liquidity are internally generated funds and short-term borrowings, which we believe are sufficient to meet our working capital requirements, in both the short term (i.e., the 12 months following the year ended March 31, 2026) and the long term (i.e., beyond such additional 12-month period). As of March 31, 2026, we had working capital of Rs.134,409 million, including cash and cash equivalents of Rs.15,368 million, investments in term deposits with banks, bonds and commercial papers of Rs.36,534 million and investments in units of mutual funds of Rs.35,912 million. As of March 31, 2025, we had working capital of Rs.119,720 million, including cash and cash equivalents of Rs.14,654 million, investments in term deposits with banks, bonds and commercial papers of Rs.9,948 million and investments in units of mutual funds of Rs.33,186 million. Our cash and cash equivalents are comprised of deposits with banks and financial institutions with high credit-ratings assigned by international and domestic credit-rating agencies which can be withdrawn at any point of time without prior notice or penalty on principal. These cash and cash equivalents included a restricted cash balance of Rs.369 million and Rs.544 million as of March 31, 2026 and 2025, respectively. These restrictions are primarily on account of balances held in unclaimed dividend accounts and other bank balances earmarked for specific purposes. Cash and cash equivalents are primarily held in U.S. dollars, Euros, Indian rupees, Russian rubles, Canadian Dollar, Australian Dollar, Chinese yuans (Renminbi), Romanian new leus and U.K. pounds sterling. Summary of statements of cash flows The following table summarizes our statements of cash flows for the years presented: For the year ended March 31, 2026 2025 2024 (Rs. in millions) Net cash from/(used in): Operating activities Rs. 56,755 Rs. 46,428 Rs. 45,433 Investing activities (65,513 ) (58,077 ) (40,283 ) Financing activities 8,290 18,911 (3,763 ) Net increase/(decrease) in cash and cash equivalents Rs. (468 ) Rs. 7,262 Rs. 1,387 58 In addition to cash, inventory and accounts receivable, we had uncommitted lines of credit of Rs.49,109 million as of March 31, 2026 from our banks for working capital requirements. We draw upon these lines of credit based on our working capital requirements. Cash Flow from Operating Activities Year ended March 31, 2026 compared to year ended March 31, 2025 Our operating activities resulted in net cash inflows of Rs.56,755 million and Rs.46,428 million for the years ended March 31, 2026 and 2025, respectively. The increase in net cash inflow of Rs.10,327 million was primarily due to a decrease in our working capital requirements, largely on account of: · a decrease in other assets and other liabilities, net by Rs.897 million for year ended March 31, 2026, as compared to an increase in other assets and other liabilities, net of Rs.7,293 million for the year ended March 31, 2025. Such decrease was primarily due to a decrease in our balances in government incentives receivable and an increase in other current liabilities during the year ended March 31, 2026; and · an increase in inventories by Rs.8,601 million for the year ended March 31, 2026, as compared to Rs.12,753 million for the year ended March 31, 2025. Our average days’ sales outstanding (“DSO”) as of March 31, 2026 and March 31, 2025 were 108 days and 95 days, respectively. The increase in our DSO was primarily on account of (a) changes in the mix of our receivables, due to an increase in the proportion of our receivables having longer credit periods in the United States during the year ended March 31, 2026, (b) a decrease in the proportion of our trade receivables being de-recognized pursuant to a factoring arrangement with certain banks in Russia during the year ended March 31, 2026, as compared to the de-recognition for the year ended March 31, 2025, and (c) an increase in trade receivables from customers in our NRT business during the year ended March 31, 2026. 59 Year ended March 31, 2025 compared to year ended March 31, 2024 Our operating activities resulted in net cash inflows of Rs.46,428 million and Rs.45,433 million for the years ended March 31, 2025 and 2024, respectively. The increase in net cash inflow of Rs.995 million was primarily due to a decrease in our working capital requirements. Our average days’ sales outstanding (“DSO”) as of March 31, 2025 and March 31, 2024 were 95 days and 103 days, respectively. Cash Flow from Investing Activities Year ended March 31, 2026 compared to year ended March 31, 2025 Our investing activities resulted in net cash outflows of Rs.65,513 million and Rs.58,077 million for the years ended March 31, 2026 and 2025, respectively, the increase was primarily on account of the following: · net purchases of other investments of Rs.27,116 million for the year ended March 31, 2026, as compared to net proceeds from sale of other investments of Rs.25,118 million for the year ended March 31, 2025; and · acquisition of property, plant and equipment, and other intangible assets, net of disposals, of Rs.36,715 million for the year ended March 31, 2026, as compared to Rs.33,154 million for the year ended March 31, 2025. The amount spent during the year ended March 31, 2026 includes: o Rs.23,017 million towards property, plant and equipment to expand our production capacity for multiple products in various manufacturing and research and development facilities, primarily in our “Formulations Srikakulam Plant 11” and “API Srikakulam Plant”; and o Rs.7,478 million for the acquisition of STUGERON® and Progynova® trademarks in India. (Refer to Note 13 of these consolidated financial statements for further details). · the above increases in cash outflow towards investing activities during the year ended March 31, 2026 were partially offset due to the payment of Rs.53,096 million to Haleon UK Enterprises Limited for the acquisition of consumer healthcare brands in NRT category during the year ended March 31, 2025, as compared to Rs.3,152 million during the year ended March 31, 2026. (Refer to Note 35.B of these consolidated financial statements for further details) Year ended March 31, 2025 compared to year ended March 31, 2024 Our investing activities resulted in net cash outflows of Rs.58,077 million and Rs.40,283 million for the years ended March 31, 2025 and 2024, respectively, the increase was primarily on account of the following : · net proceeds from sale of other investments of Rs.25,118 million for the year ended March 31, 2025, as compared to net purchases of other investments of Rs.15,704 million for the year ended March 31, 2024; · acquisition of property, plant and equipment, and other intangible assets, net of disposals, of Rs.33,154 million for the year ended March 31, 2025, as compared to Rs.26,350 million for the year ended March 31, 2024; and · business acquisitions made of Rs.53,096 million for the year ended March 31, 2025, as compared to the business acquisitions made of Rs.0 million for the year ended March 31, 2024. Cash Flow from Financing Activities Year ended March 31, 2026 compared to year ended March 31, 2025 Our financing activities resulted in net cash inflows of Rs.8,290 million as compared to net cash outflows of Rs.18,911 million for the years ended March 31, 2026 and 2025, respectively, the increase was primarily on account of the following: · net proceeds from short-term borrowings of Rs.20,257 million for the year ended March 31, 2026, as compared to net proceeds from short-term borrowings of Rs.24,490 million for the year ended March 31, 2025; 60 · payments of dividends of Rs.6,659 million for the year ended March 31, 2026, as compared to payments of dividends of Rs.6,662 million for the year ended March 31, 2025; · interest payments of Rs.4,441 million for the year ended March 31, 2026, as compared to interest payments of Rs.3,483 million for the year ended March 31, 2025; · payments of the principal portion of lease liabilities of Rs.1,263 million for the year ended March 31, 2026, as compared to payments of the principal portion of lease liabilities of Rs.1,294 million for the year ended March 31, 2025; · payments made for the purchase of treasury shares of Rs.0 million for the year ended March 31, 2026, as compared to payments made for the purchase of treasury shares of Rs.1,389 million for the year ended March 31, 2025; and · proceeds from the issuance of non-controlling interest (“NCI”) equity shares in a subsidiary of Rs.0 million for the year ended March 31, 2026, as compared to proceeds from issuance of NCI equity shares in a subsidiary of Rs.7,056 million for the year ended March 31, 2025. Year ended March 31, 2025 compared to year ended March 31, 2024 Our financing activities resulted in net cash inflows of Rs.18,911 million as compared to net cash outflows of Rs.3,763 million for the years ended March 31, 2025 and 2024, respectively, the increase was primarily on account of the following: · net proceeds from short-term borrowings of Rs.24,490 million for the year ended March 31, 2025, as compared to net proceeds from short-term borrowings of Rs.5,493 million for the year ended March 31, 2024; · payments of dividends of Rs.6,662 million for the year ended March 31, 2025, as compared to payments of dividends of Rs.6,648 million for the year ended March 31, 2024; · interest payments of Rs.3,483 million for the year ended March 31, 2025, as compared to interest payments of Rs.2,266 million for the year ended March 31, 2024; · payments of the principal portion of lease liabilities of Rs.1,294 million for the year ended March 31, 2025, as compared to payments of the principal portion of lease liabilities of Rs.1,147 million for the year ended March 31, 2024; · payments made for the purchase of treasury shares of Rs.1,389 million for the year ended March 31, 2025, as compared to payments made for the purchase of treasury shares of Rs.0 million for the year ended March 31, 2024; and · proceeds from the issuance of non-controlling interest (“NCI”) equity shares in a subsidiary of Rs.7,056 million for the year ended March 31, 2025, as compared to proceeds from issuance of NCI equity shares in a subsidiary of Rs.0 million for the year ended March 31, 2024. Principal debt obligations The following table summarizes our principal debt obligations (excluding obligations under leases) outstanding as of March 31, 2026: Payments due by period Principal debt obligations Total Less than 1 year 1-5 years More than 5 years (Rs. in millions) Short-term borrowings (includes bank overdraft) Rs. 59,135 Rs. 59,135 Rs. - Rs. - Long-term borrowings Rs. 3,799 Rs. 3,799 Rs. - Rs. - Total obligations Rs. 62,934 Rs. 62,934 Rs. - Rs. - Annual rate of interest The following table provides details of annual rates of interest for our principal debt obligations (excluding obligations under leases) outstanding as of March 31, 2026: Debt Amounts in Millions Currency(1) Interest Rate(2) Working capital borrowingsAnd Pre-shipment credit 59,135 RUB Key rate + 348 bps to 398 bps MXN TIIE + 1.35% INR T-bill + 35 bps to 55 bps REPO + 75 bps BRL CDI+1.55% Long term borrowings 3,799 INR 3 Months T-bill + 84 bps (1) “BRL” means Brazilian reals, “INR” means Indian rupees, “MXN” means Mexican pesos and “RUB” means Russian rubles. (2) “CDI” means Brazilian interbank deposit rate (Certificado de Depósito Interbancário), “Key rate” means the key interest rate published by the Central Bank of Russia, “REPO” means the “Repurchasing option” rate published by the Reserve Bank of India , “SOFR” means Secured Overnight Financing Rate, “T-bill” means India Treasury bill interest rate, “TIIE” means the Equilibrium Inter-Banking Interest Rate (Tasa de Interés Interbancaria de Equilibrio). 61 Our short-term borrowings from banks are repayable within 6 to 12 months from the date of drawdown. Our objective in determining the borrowing maturity is to ensure a balance between flexibility, cost and continuing availability of funds. Subject to obtaining certain regulatory approvals, there are no legal or economic restrictions on the transfer of funds between us and our subsidiaries or for the transfer of funds in the form of cash dividends, loans or advances. Consistent with our risk management policy, we use interest rate swaps to mitigate the risk of changes in interest rates. Material cash requirements During the year ended March 31, 2026 our principal cash requirements were utilized for the purchase of property, plant and equipment of Rs.23,017 million, other intangible assets of Rs.13,698 million and investments of Rs.27,116 million. As of March 31, 2026, we had committed to spend Rs.9,716 million in capital expenditures under agreements to purchase property, plant and equipment. These amounts are net of capital advances paid in respect of such purchase commitments. These commitments will be funded through the cash flows generated from operations, cash and cash equivalents, other investments and the cash flows from borrowings as required. As of March 31, 2026 and 2025, we had uncommitted lines of credit from banks of Rs.49,109 million and Rs.50,904 million, respectively. 5.C. Research and development, patents and licenses, etc. Research and Development Our research and development activities can be classified into several categories, which run parallel to the activities in our principal areas of operations: · Global Generics, where our research and development activities are directed at the development of product formulations, process validation, bioequivalence testing and other data needed to prepare a growing list of drugs that are equivalent to numerous brand name products for sale in the highly regulated markets of the United States and Europe as well as emerging markets. Global Generics also includes our biologics business, where research and development activities are directed at the development of biologics products for the emerging as well as highly regulated markets. Our biologics research and development facility caters to the highest development standards, including cGMP, Good Laboratory Practices and bio-safety level IIA. Global Generics also include the products where we focus on the research, development, and commercialization of differentiated formulations. · Pharmaceutical Services and Active Ingredients, where our research and development activities concentrate on development of chemical processes for the synthesis of API for use in our Global Generics segment and for sales in the emerging and developed markets to third parties. Our research and development activities also support our pharmaceutical services business, where we continue to leverage the strength of our process chemistry and finished dosage development expertise to target innovator as well as emerging pharmaceutical companies. The research and development is directed toward providing services to support the entire pharmaceutical value chain, from discovery all the way to the market. In the years ended March 31, 2026, 2025 and 2024, we expended Rs.24,058 million, Rs.27,380 million and Rs.22,873 million, respectively, on research and development activities. These increases were primarily on account of higher developmental expenditures in our Global Generics business and PSAI business. Each of these business segments has its own research and development and patent policies, and has numerous products in various stages of development. For further information on these policies and these products, see “Item 4. Information on the Company - Item 4.B Business overview.” Patents, Trademarks and Licenses We have filed and been issued num e rous patents in our principal areas of operations: Global Generics and Pharmaceutical Services and Active Ingredients. We expect to continue to file patent applications seeking to protect our innovations and novel processes in several countries, including the United States. Any existing or future patents issued to or licensed by us may not provide us with any competitive advantages for our products or may even be challenged, invalidated or circumvented by our competitors. In addition, such patent rights may not prevent our competitors from developing, using or commercializing products that are similar or functionally equivalent to our products. As of March 31, 2026, we have more than 2,676 trademarks filed with the Registrar of Trademarks in India which are either registered or are pending registration. We have also filed registration applications for non-U.S. trademarks in other countries in which we do business. We market several products under licenses in several countries where we operate. 62 5.D. Trend Information Inflation In recent years, there has been an accelerated rate of global inflation (a trend which might continue in the near future) that has resulted, and may continue to result, in increased costs of labor, raw materials, other supplies and freight and distribution costs, among others. For the pharmaceutical industry, the pricing dynamics of our products generally does not provide the opportunity to pass on such costs to customers. Inflation may also result in higher interest rates and increased costs of capital. For additional details, see the discussion in Item 3.D. of this report under “Risk factors - Current economic conditions may adversely affect our industry, financial position, results of operations and cash flows.” Military conflicts Countries and regions experiencing political and economic instability or armed conflicts (including Russia, Ukraine and the Middle East) can have adverse business, operational or financial impacts on us. For example, geopolitical instability and armed conflict and hostilities have disrupted and may continue to disrupt global supply chains, trade routes, energy markets, and transportation infrastructure. Current instability in the region has contributed to volatility in crude oil, natural gas, and petrochemical markets, which directly and indirectly affect the cost and availability of key pharmaceutical inputs, including solvents, intermediates, excipients, and packaging materials. Increases in energy linked input costs and related supply interruptions could raise our cost of goods sold, compress margins, and adversely impact profitability coverage, especially for products subject to fixed pricing, regulated pricing environments, or long term supply contracts. We are exploring several strategies to strengthen our business continuity safeguards, including diversified supply procurement and alternative coverage solutions. For additional details, see the discussion in Item 4.B. of this report under “Our Principal Areas of Operations - Global Generics Segment - Russia and other Countries of the former Soviet Union and Romania - Impact on our Operations due to the military conflict between Russia and Ukraine” and Item 3.D. of this report under “Risk Factors - We have operations in certain countries and geographies susceptible to political and economic instability that could lead to disruption or other adverse impact on such operations”. Others For additional trend information, please see “Item 5.A - Fiscal Year Ended March 31, 2026 compared to Fiscal Year Ended March 31, 2025” and “Item 4. - Information on the Company”. 5.E. Critical Accounting Estimates Not Applicable.