Hyderabad, India, November 8, 2005

Dr. Reddy’s signs definitive agreement to acquire Roche’s API business at it’s Mexico facility

Hyderabad, India, November 8, 2005: Dr. Reddy’s Laboratories Limited (NYSE: RDY) announced today that the Company has entered into a definitive agreement to acquire Roche’s API business at the state-of-the-art manufacturing site in Cuernavaca, Mexico including all employees and business supply contracts. The total investment outlay is about USD 59 million including working capital.

This business involves the manufacture and sale of APIs including intermediates to Roche and other Innovator Companies. The product portfolio currently comprises about 18 products including mature APIs and a range of intermediates and steroids. This acquisition also adds unique steroids manufacturing capabilities to Dr. Reddy’s. The Cuernavaca site at Mexico currently employs nearly 340 people and has been inspected by the U.S.FDA and other international regulatory agencies.

Commenting on the acquisition, GV Prasad, CEO, Dr. Reddy's Laboratories, said, “With the acquisition of Roche’s API business at the Mexico site, Dr. Reddy’s will emerge as a leading player in Custom Pharmaceutical Services (CPS) business and position itself as a partner of choice for Innovator Companies across the globe with service offerings spanning the entire value chain of pharmaceutical services. This strategic acquisition provides an opportunity for our CPS business to grow from the current base of USD10 million to USD100 million over the next 18 months. The integration of these businesses - people and technology; the expertise of the management team and distinctive manufacturing capability at the Mexico site, with that of Dr. Reddy’s strengths in process chemistry and world class research capabilities will provide a strong foundation to drive the next wave of growth in our CPS business.

The acquisition is expected to be completed by end of December 2005. The Company expects the acquisition to be EPS accretive to Dr. Reddy’s and the full year financial impact of the acquisition will be realized from the year 2006-07 onwards.

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 diabetes, cardiovascular, anti-infectives, inflammation and cancer.

About Roche
Headquartered in Basel, Switzerland, Roche is one of the world’s leading research-focused healthcare groups in the fields of pharmaceuticals and diagnostics. As a supplier of innovative products and services for the early detection, prevention, diagnosis and treatment of disease, the Group contributes on a broad range of fronts to improving people’s health and quality of life. Roche is a world leader in diagnostics, the leading supplier of medicines for cancer and transplantation and a market leader in virology. In 2004 sales by the Pharmaceuticals Division totalled 21.7 billion Swiss francs, while the Diagnostics Division posted sales of 7.8 billion Swiss francs. Roche employs roughly 65,000 people in 150 countries and has R&D agreements and strategic alliances with numerous partners, including majority ownership interests in Genentech and Chugai. Additional information about the Roche Group is available on the Internet (www.roche.com).

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.
Contact Information

Investors and Financial Analysts:
Nikhil Shah at nikhilshah@drreddys.com
or on +91-40-55511532
Media: M Mythili at mythilim@drreddys.com
or on +91-40-55511620