Dr Reddys Laboratories Ltd

Dear Shareholders,

FY2024 was an exciting and eventful year. We grew our core, invested in our future, and continued to serve our stakeholders. We also observed 40 years of our company's journey. Through this second edition of our integrated report, we bring you a brief overview of our journey, important highlights of the year, and the work we do for patients, people and planet.

40 Years of Creating Value

In February 2024, we marked our 40th year of serving patients, with a legacy of access, affordability, innovation, and sustainability. Our company was founded in 1984 to enable patients to access life-saving medicines, and to use science and innovation to open new avenues to meet unmet medical needs. This pioneering spirit and quest for excellence drove us to achieve industry-firsts such as investment in drug discovery in the 1990s, expansion into international markets and first-to-market launches several countries, the first 180-exclusivity granted to Indian pharma by the USFDA, listing on the NYSE, and adoption of voluntary disclosures and science-based commitments in sustainability.

Giving back to society was instilled into the ethos of the company from its early days.

We also learnt several lessons along the way from a myriad of challenges – from acquisitions that did not work well, to a period of Quality compliance issues, and several geo-political crises. We are grateful that through all the thick and thin, we had constant support and trust from our patients, the medical fraternity, shareholders and investors, customers, partners, and all other stakeholders. Our people are our pride, and nothing gives us more joy than to see our people realise their full potential in the company, and to see several of our alumni lead the industry forward. There is still a long way to go.

No company can afford to rest on its past laurels. The pharma landscape continues to evolve constantly and remains extremely competitive. Our approach is to ensure that we continue to do the basics well in our core businesses of API, generics, branded generics, biosimilars and OTC. On the other hand, as demographics, disease patterns, business models evolve, it is important to anticipate healthcare trends of the future. We have started investing in areas that we think could be future growth drivers – novel molecules (NCEs, NBEs, CAR-T), digital therapeutics (wearables, apps), and consumer healthcare (nutrition and OTC wellness). These are relatively new and long-gestation areas requiring companies to think and do things differentlythrough strong investment in newer capabilities, and an appetite for risk. In FY2024, we made good progress in some of these areas.

Highlights of FY2024

Overall, we delivered strong financial day results in FY2024. We had double digit revenue growth at 14%, reported EBITDA margin for the year at 29.7%, and ROCE of over 35%. Our growth and profitability were driven by our performance in the U.S.

Strategic collaborations played an important role in helping us introduce the latest generation of treatments to patients in India, both in our current core business as well as future growth drivers. We signed a partnership with Sanofi in India take their well-established and trusted vaccines portfolio to more people all over India. With combined sales of over Rs 426 crore (as per IQVIA MAT February 2024), the vaccine portfolio also propels us to the second position among vaccine players in India. Our collaboration with Bayer in India, to market their second brand of the molecule Vericiguat, helps us make this new class of drugs in heart failure management available to patients in India, in and beyond metros in tier-I and tier-II towns. It also bolsters our heart failure management portfolio as we look to strengthen our play in the chronic segment. Our collaboration with

Pharmazz Inc. enables us to market the first-in-class molecule Centhaquine in India, a potential add-on drug in the management of hypovolemic shock. We continue to advance our work in the identified future growth spaces of access to novel molecules, digital therapeutics, and consumer healthcare. Our regulatory work in India on Toripalimab, for which we partnered with Junshi Biosciences, has moved forward. We have taken early steps in the area of digital therapeutics, with the launch of the drug-free migraine management device Nerivio?, and a digital integrated care plan to manage Irritable Bowel Syndrome (IBS). Consumer healthcare is a fast-growing segment. In recent years, we have acquired several well-known brands in the U.S. in Nicotine Replacement Therapy (NRT), pain-relief, and women's health. In India, we have a portfolio of OTC products in the hydration, cough-cold-allergy, and skin care categories. The recent announcement of a joint venture with Nestl? India to bring the well-known global range of nutritional health solutions as well as vitamin, minerals, herbals and supplements of Nestl? Health Science (NHSc) to India, is another significant move to strengthen our nutrition and OTC business in India. In Emerging Markets, we have a long-established and sizeable

OTC business with market-leading products in the allergy, pain relief, gastro-intestinal and women's health categories. We also entered the UK consumer health market with the launch of the OTC allergy medication Histallay this year. A few days ago, we announced the acquisition of the global consumer healthcare brand Nicotinell and its various market-leading brand names in over 30 countries outside of the U.S. We see this acquisition as an ideal anchor platform to grow our consumer healthcare business.

Through all of the above, our aim is to meet unmet needs of patients and to enhance standard of care wherever possible. We also continue our efforts to be viewed as the partner of choice for our commercial strengths and footprint, our governance, ESG and progressive practices, and our discipline.

While our people put in every effort to ensure we meet our business targets and ESG goals, there are always challenges along the way. Our record financial performance in the last two years has been led by a blockbuster product in the U.S. We are working hard to ensure that our current investments and diversified business model approach help us maintain sustained growth in the upcoming years. As part of the usual course of business, we faced several regulatory inspections at our manufacturing sites in FY2024. Our all-time readiness approach stood us in good stead but we continue our state of constant vigilance in Quality compliance. Our dossier for our proposed rituximab biosimilar candidate received a Complete Response Letter from the USFDA. We will continue to work closely with the USFDA to address and resolve all concerns within stipulated timelines in order to make this biosimilar rituximab available to patients in the U.S. as soon as possible. Similarly, the bold and ambitious nature of our ESG goals means that it is challenging to succeed equally in every goal every year. However, our commitment remains undeterred. By the end of FY2024, we had served over 700 million patients and continue our endeavour to reach over 1.5 billion patients globally by 2030. Our progress was recognised in our ascent to the Dow Jones Sustainability World Index, improved position in the S&P Global Sustainability Yearbook, and Gold Medal status by EcoVadis. In FY2024, we also launched Womb to the World, an initiative within our India business for working mothers from the pre-natal care stage to support in various ways until their children attain 18 years of age, thereby enabling more women to stay in the workforce and succeed in their careers. In partnership with Dr. Reddy's Foundation, we upgraded several primary healthcare centres in Srikakulam. We also completed a pond rejuvenation community project in Baddi, and funded a rare disease research centre at the Dr. Reddy's Institute of Life Sciences. Over 40 years, our company has evolved from an API player to formulations, finished drugs, biosimilars, and newer healthcare segments. Amidst the evolution, what has remained unchanged is our endeavour to keep access, affordability, innovation at the heart of everything we do. And we continue to be guided by our core tenets of deep science, progressive people practices, and robust governance. Once again, deep gratitude to all those who have supported and contributed to our journey of 40 years. It is an important milestone, but as our founder Dr. Anji Reddy often remarked, we would like to build an organisation that will last 500 years.