Dr. Reddy’s Laboratories Ltd. (NYSE: RDY) today announced its unaudited financial results for the second quarter ended September 30, 2006.

Key Financial Highlights

• Q2 FY07 revenue at Rs 20.0 billion as against Rs 5.8 billion in Q2 FY06; Net income at Rs 2.8 billion as against Rs 0.9 billion in Q2 FY06
• H1 FY07 revenue at Rs 34.1 billion as against Rs 11.4 billion in H1 FY06.
• H1 FY07 net income at Rs 4.2 billion as against Rs 1.2 billion in H1 FY06; Diluted EPS at Rs 27.23 as against Rs 8.07 for H1 FY06

Q2 FY07 Key Revenue Highlights

• Revenues at Rs 20.0 billion in Q2 FY07 as against Rs 5.8 billion in Q2 FY06, representing increase of 245%
• Revenues from international markets increased by 391% at Rs. 17.6 billion
• Contributed 88% to total revenues as compared to 62% in Q2 FY06
• Revenues from core businesses (excluding the contribution from authorized generics and  acquisitions), increased by 42% to Rs 8.2 billion from Rs 5.8 billion.
• The acquisitions in Mexico and Germany contributed 20% to total revenues in Q2 FY07; combined revenues contributed 20% to total revenues in Q2 FY07.
• Revenues in Germany at Rs. 2,554 million in Q2 FY07 as compared to Rs. 1,998 million in Q1 FY07;Gross Profit margin for Q2 FY07 was at 58% as against 53% in Q1 FY07
• Revenues from the acquisition in Mexico at Rs. 1,434 million in Q2 FY07 as compared to Rs. 1,241 million in Q1 FY07
• Revenues in the API business increased by 36% to Rs 2.9 billion in Q2 FY07 from Rs. 2.1 billion in Q2 FY06 primarily driven by the significant contribution from sertraline.
• Revenues in branded formulations business increased by 19% to Rs. 3.1 billion in Q2 FY07 from Rs. 2.6 billion in Q2 FY06 driven by growth across key countries.
• Revenues from international markets increased by 23% to Rs. 1.3 billion, driven by growth in Russia as well as the CIS region.
• Revenues from India increased by 16% to Rs. 1.7 billion, driven by growth in key brands. As per ORG IMS August MAT, our volume growth was 17% as compared to industry average volume growth of 15% and value growth tracks industry growth.
• Revenues in North America generics finished dosage business increased to Rs. 9,082 million in Q2 FY 07 as compared to Rs. 299 million in Q2 FY 06. This growth was primarily driven by
• Combined revenues of Rs. 7,808 million from simvastatin and finasteride. Both these products were launched as authorized generic versions of Merck’s Zocor® and Proscar® in June 2006; Contributed 39% to total revenues in Q2 FY 07.
• Excluding authorized generics, growth was primarily driven by fexofenadine, which contributed  revenues of Rs. 807 million. 

Contd on page 2...