CORRECTING and REPLACING Dr. Reddy's Q1 FY08 revenue at Rs 12,018 million; Net income at Rs 1,825 million

Please replace the release with the following corrected version due to multiple revisions. The corrected release reads: DR. REDDY’S Q1 FY08 REVENUE AT RS 12,018 MILLION; NET INCOME AT RS 1,825 MILLION Dr. Reddy’s Laboratories Ltd. (NYSE: RDY) today announced its unaudited financial results for the quarter ended June 30, 2007. Q1 FY08 Revenue at Rs 12.0 billion ($296 mn) as against Rs 14.0 billion ($346 mn) in Q1 FY07 Q1 FY08 PAT at Rs 1,825 million ($45 mn) as against Rs 1,398 million ($34 mn) in Q1 FY07 Growth in revenues at 10% excluding for the upsides from authorized generics Q1 FY08 Key highlights -- Revenues at Rs 12.0 billion ($296 mn) in Q1 FY08 as against Rs 14.0 billion ($ 346 mn) in Q1 FY07, representing a decrease of 14% -- Revenues from international markets at Rs. 9.4 billion ($ 281 mn) in Q1 FY08 as against Rs 11.7 billion ($287 mn) in Q1 FY07; contributed 78% to total revenues in Q1 FY08 as compared to 83% in Q1 FY07. -- Excluding the upsides from authorized generics products from both the quarters, revenues increase by 10% to Rs 11.8 billion ($290 mn) in Q1 FY08 from Rs 10.7 billion ($264 mn) in Q1 FY07. -- Revenues in branded formulations business increase by 15% to Rs. 4.0 billion ($100 mn) in Q1 FY08 from Rs. 3.5 billion ($87 mn) in Q1 FY07 driven by growth in India, Russia and CIS. -- Revenues in India increase by 16% to Rs 2.0 billion ($50 mn) in Q1 FY08 from Rs. 1.7 billion ($43 mn) in Q1 FY07. -- As per ORG IMS May 2007, the Company has outperformed the industry growth rate and has improved its ranking in the industry to 9th position from the 10th position. The Company continues to rank as the second fastest growing company in the Top 10. -- Revenues from betapharm at Rs. 2.1 billion ($53 mn) in Q1 FY08 as compared to Rs. 1.9 billion ($49 mn) in Q1 FY07. -- As per INSIGHT May 2007, betapharm recorded a 36% growth in pharmacy volumes. -- In North America, revenues from Generic finished dosage business increase by 59% to Rs 1.5 billion ($38 mn) from Rs 958 million ($24 mn) in Q1 FY07, excluding the upsides from authorized generics. -- Revenues in the API business increase by 13% to Rs 2.6 billion ($64 mn) in Q1 FY08 from Rs. 2.3 billion ($57 mn) in Q1 FY07 primarily driven by growth in international markets. -- Revenues from custom pharmaceuticals services decline to Rs 1.0 billion ($25 mn) in Q1 FY08 from Rs 1.4 billion ($ 35 mn) in Q1 FY07. This decrease was due to the decline in revenues from Mexico resulting from supply shortages of one of the key raw materials. All figures in millions, except EPS All Dollar figures based on convenience translation rate of 1 USD = Rs 40.58   EXTRACT FROM THE UNAUDITED INCOME STATEMENT       Q1 FY08       Q1 FY07         Particulars   ($)   (Rs.)   %   ($)   (Rs.)   %   Growth % Total Revenues   296   12,018   100   346   14,049   100   (14) Cost of revenues   146   5,914   49   196   7,960   57   (26) Gross profit   150   6,104   51   150   6,089   43   - Selling, General & Administrative Expenses   78   3,166   26   82   3,346   24   (5) R&D Expenses (1)   20   806   7   13   533   4   51 Amortization Expenses   9   351   3   9.6   388   3   (10) Other operating (income)/expense net   -   0.8   0   (2)   (70)   0   - Forex Loss/ (Gain)   (7)   (285)   (2)   1.8   74   1   - Operating income/(loss)   51   2,065   17   45   1,817   13   14 Equity in loss of affiliates   (0.1)   (4)   0   -   (15)   -   (73) Other income/(expense) net   (1.4)   (57)   0   (5)   (197)   2   (71) Income before income taxes and minority interest   49   2,003   17   39.5   1,605   11   25 Income tax (expense)/benefit   (4.5)   (181)   (2)   (5)   (208)   1   - Minority interest   (0.1)   (3)   0       0   0   - Net income   45   1,825   15   34   1,398   10   31 DEPS   0.27   10.82       0.22   9.07         Exchange rate       40.58           40.58         Key Balance Sheet Items     As on 30 June 07       As on 31 March 07         Cash and cash equivalents   274   11,112       458   18,588         Borrowings from banks(Short + Long)   377   15,290       610   24,754         Accounts receivable, net of allowances   176   7,127       185   7,519         Inventories   208   8,426       186   7,546         Property, plant and equipment, net   319   12,963       306   12,428           1. Income recognition under Generics R&D partnership with ICICI Venture amounting to Rs 158 million in Q1 FY07 compared to nil in Q1 FY08. Reimbursement of expenses from Perlecan Pharma Private Limited of Rs. 86 million in Q1 FY 07 as against Rs 31 million in Q1 FY07. SEGMENTAL ANALYSIS Active Pharmaceutical Ingredients (APIs) Revenues at Rs 2.6 billion in Q1 FY08 as against Rs 2.3 billion in Q1 FY 07, representing an increase of 13%. Revenues outside India at Rs 2.0 billion in Q1 FY08 as against Rs 1.7 billion in Q1 FY07, an increase of 24%. Such revenues contributed 80% of total segment revenues as compared to 73% in Q1 FY07. Revenues in Europe increase by 22% to Rs. 536 million in Q1 FY08 from Rs. 440 million in Q1 FY07 primarily driven by increase in sale of key products. Revenues in rest of the world markets increase by 27% to Rs. 1.0 billion in Q1 FY08 from Rs. 824 million in Q1 FY07, primarily driven by growth in key markets. Revenues in North America increase by 19% to Rs 498 million in Q1 FY08 as against Rs 420 million in Q1 FY07 driven by combination of new launches as well as new products under development. Revenues in India at Rs 535 million in Q1 FY08 compared to Rs 625 million in Q1 FY07, a decrease of 14%, primarily on account of volume decline in key products. The Company filed 3 US DMFs during the quarter taking the total filings to 107. The company also filed 3 DMFs each in Canada and Europe. Generic Finished Dosages Revenues in this segment at Rs 4.2 billion in Q1 FY08 as against Rs 6.7 billion in Q1 FY07. North America contributed 42% and Europe contributed 58% to the segment revenues. In North America, revenues at Rs. 1.8 billion in Q1 FY08 as against Rs. 4.3 billion in Q1 FY07. Excluding the upsides from authorized generics in both the quarters, revenues increase by 59% from Rs 958 million in Q1 FY07 to Rs 1.5 billion in Q1 FY08. This increase was the result of the first full quarter of revenues from all the new products launched during FY07. Revenues from fexofenadine, generic version of Allegra® at Rs. 517 million. Currently, the Company’s market share is about 25%. Revenues from ondansetron, generic version of Zofran® at Rs. 66 million. Following expiry of exclusivity, the Company’s market share is about 54%. In Europe revenues increase to Rs. 2.5 billion in Q1 FY08 from Rs. 2.4 billion in Q1 FY07. Revenues from betapharm (Germany) at Rs. 2.1 billion in Q1 FY08 as compared to Rs. 1.9 billion in Q1 FY07. Revenues from UK at Rs. 327 million in Q1 FY08 as against Rs 426 million in Q1 FY07. Revenues from Spain at Rs. 14 million. As per INSIGHT May 2007, betapharm registered a 36% growth in pharmacy volumes. betapharm has the largest number of contracts with insurance companies covering about 70% of the total insured population in Germany. In Q1 FY08, the Company filed 8 ANDAs including 3 first-to-file opportunities. The Company also received approval (including tentative) for 4 ANDAs. The Company also filed 3 dossiers in Europe. Branded Finished Dosages - International Revenues at Rs 2.0 billion in Q1 FY08, an increase of 14% over Q1 FY07. This growth was primarily driven by Russia and CIS markets. Revenues in Russia increase by 11% to Rs. 1.2 billion in Q1 FY08 as against Rs. 1.1 billion in Q1 FY07. This growth was primarily driven by increase in sales from key brands of Nise, Ciprolet and Keterol as well as the contribution from new products launched during FY07. Revenues in CIS markets increase by 25% to Rs 423 million in Q1 FY08 as against Rs 339 million in Q1 FY07. This growth was primarily driven by increase in sales from Ukraine and Kazakhstan. Branded Finished Dosages - India -- Revenues at Rs 2.0 billion in Q1 FY08 as compared to Rs. 1.7 billion in Q1 FY07, representing an increase of 16%. This growth was primarily driven by growth in key brands of Omez, Nise, Stamlo Beta, Atocor and Razo. These brands are growing ahead of their respective segment growth rate. -- Seven new products launched during the quarter. -- As per ORG IMS May 2007, -- Company continues to be ranked as the second fastest growing company in the Top 10, -- Company (growth of 25%) outperformed the market growth rate of 14%, -- Company improved its rank in the industry to the 9th position. Custom Pharmaceutical Services (CPS) Revenues from CPS at Rs. 1.0 billion in Q1 FY08 as compared to Rs 1.4 billion in Q1 FY07. Revenues from Mexico at Rs. 830 million in Q1 FY08 as compared to Rs. 1.2 billion in Q1 FY07. This decline in revenues was primarily on account of shortfall in supplies of one of the key raw materials. Revenues from India increase marginally from Rs. 178 million in Q1 FY07 to Rs. 187 million in Q1 FY08. Income Statement Highlights Gross profits increase marginally to Rs. 6.1 billion in Q1 FY08 from Rs. 6 billion in Q1 FY07. Gross profit margins on total revenues at 51% as against 43% in Q1 FY07. In Q1 FY07, revenues from authorized generics contributed 24% to total revenues and earned gross margins significantly below company average gross margin. R&D investments (net) at 7% of total revenues as against 4% in Q1 FY07. Gross R&D investments increase by 8% to Rs 837 million from Rs 777 million in Q1 FY07. Further, in Q1 FY07, the Company recognized Rs 244 million under its R&D partnerships as a benefit to the R&D line item as compared to Rs. 31 million in Q1 FY08. Selling, General & Administration (SG&A) expenses decrease by 5% to Rs 3.2 billion. As % to revenues, adjusted for authorized generics, the SG&A ratio to sales is at 27% in Q1 FY08 as compared to 31% in Q1 FY07. Forex gain of Rs 285 million in Q1 FY08 as compared to forex loss of Rs 74 million in Q1 FY07. Amortization was Rs. 351 million as compared to Rs. 388 million in Q1 FY07. This includes amortization relating to intangibles in betapharm, Spain (acquisition of products) and acquisition in Mexico. Net income at Rs 1,825 million (15% of total revenues) as against Rs 1,398 million (10% of total revenues) in Q1 FY07. This translates to a diluted EPS of Rs 10.82 as against Rs 9.07 in Q1 FY07. About Dr. Reddy's Established in 1984, Dr. Reddy's Laboratories (NYSE: RDY) is an emerging global pharmaceutical company with proven research capabilities. The Company is vertically integrated with a presence across the pharmaceutical value chain. It produces finished dosage forms, active pharmaceutical ingredients and biotechnology products and markets them globally, with focus on India, US, Europe and Russia. The Company conducts research in the areas of cancer, diabetes, cardiovascular, inflammation and bacterial infection. Disclaimer This press release includes forward-looking statements, as defined in the U.S. Private Securities Litigation Reform Act of 1995. We have based these forward-looking statements on our current expectations and projections about future events. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. Such factors include, but are not limited to, changes in local and global economic conditions, our ability to successfully implement our strategy, the market acceptance of and demand for our products, our growth and expansion, technological change and our exposure to market risks. By their nature, these expectations and projections are only estimates and could be materially different from actual results in the future. Notes 1. In line with global disclosure standards, the company commenced reporting its financials on a consolidated basis since Q1 FY03. 2. Current quarter financial discussions below are on a consolidated basis as per the US GAAP. 3. Detailed analysis of the financials is available on the Company’s website at www.drreddys.com.