We resume coverage on Dr Reddys with a NEUTRAL rating. Although valuations are attractive at 21x/16x of FY17E/FY18E EPS in our base case scenario, they are subject to a successful resolution of the warning letter against three of Dr Reddys facilities. We expect a resolution by 4QFY17 and refrain from taking a call, as the possibility of an import alert cannot be ignored. Our TP is Rs 3,600 (20x FY18E EPS, assuming resolution).