We upgrade our rating from SELL to NEUTRAL with a revised TP of Rs 2,400 (16x Dec19E). Dr. Reddys Laboratories (DRRD) received an EIR (Establishment Inspection Report) for its Bachupally (plant 3) formulations facility. This leaves DRRD with only the crucial Duvvada facility under significant regulatory action (Srikakulam API plant EIR expected after only 2 483 obs. in re-inspectiion). With ~50% of DRRDs top-line coming from the US business and the majority of this being sold from Bachupally, the risk of escalation to an import alert was a significant investor concern. This has now been eased.