The study is based on different measures to assess the qualitative efficiency of liquidity management and trade-off between liquidity, risk and profitability. There was a negative association between liquidity and profitability. It reflects the unfavorable effect of liquidity on profitability. The negative correlation between risk and profitability reflects the unfavorable effect of risk and profitability. It reveals that the overall performance regarding liquidity management at Dr.Reddy’s was very good from the creditor’s point of view, but according to the management’s point of view, it reflects bad financial planning and inefficient tie up of liquid funds. The company maintained an excess in relation to total assets was also high. However, it showed greater efficiency both in working capital turnover and in the realization of receivables. It indicates that the high degree of conservative policy adopted by the company has made a negative impact on its profitability.