Dr Reddys Laboratories’ unaudited results for the quarter ended June 30, 2006 is as follows:

The Company has posted a net profit of Rs 131.81 crore for the quarter ended June 30, 2006 as compared to Rs 63.34 crore for the quarter ended June 30, 2005. Total Income (net of excise) has increased to Rs 772.18 crore for the quarter ended June 30, 2006 from Rs 536.32 crore for the quarter ended June 30, 2005.

The Group has posted a net profit attributable to the shareholders of the Parent of Rs 128.92 crore for the quarter ended June 30, 2006 where as the same was at Rs 30.69 crore for the quarter ended June 30, 2005. Total Income (net of excise) is Rs 1373.67 crore for the quarter ended June 30, 2006 where as the same was at Rs 563.66 crore for the quarter ended June 30, 2005.

On March 03, 2006, the company through its step down subsidiary Reddy Holding GmbH acquired 100% of the outstanding common shares of Betapharm Group for a consideration of Rs 2606.33 crore. Betapharm is a leading generics pharmaceuticals company in Germany. The strategic investment in Betapharm is a step towards realizing the Company's intention of building a global generics business in key European markets. The transaction has been accounted for under the purchase method of accounting under AS 21 - "Consolidated Financial Statements" and the resultant goodwill of Rs 1939.81 crore has been recorded in the books.

On December 30, 2005, the Company acquired 100% of the share capital of Industries Quimicas Falcon de Mexico, S.A.De.C.V. ( "Falcon"), a Roche group Company for a cash consideration of Rs 2320.246 million. Additionally, the Company has paid Rs 243.424 million for acquisition of customer relationships which has been accounted as an intangible asset. Falcon is primarily engaged in the manufacturing and selling of active pharmaceutical ingredients Naproxen, Naproxen Sodium and steroids.

On May 19, 2006, the Company through its wholly owned subsidiary Reddy Pharma Iberia, S.A., acquired marketing authorisations of the pharmaceutical specialties, marketing authorisation applications and a trademark along with physical inventories of the related products from Laboratories Litaphar, S.A. (Litaphar) for a total consideration of Rs 218.90 million. This has been accounted as acquisition of intangibles and inventories.

The consolidated results of the current quarter include the results of the acquisitions described in notes 1, 2 and 3 above and are therefore not comparable with the previous period.