Alembic Ltd Management Discussions

Industry Perspective vis-a-vis the Company

The Company operates primarily in the business of Real Estate Development and manufacture of Bulk Drugs.

(A) Segment-wise Performance, Industry structure and Developments, Outlook and Opportunities & Concerns, Risk and Threat:

a) Real Estate Business:

The Indian economy remained resilient during FY 2025-26, supported by domestic demand, public investment and relatively stable macroeconomic conditions. The Economic Survey for 2025-26 estimated real GDP growth at 7.4% for the year, with private consumption and investment continuing to support economic activity. Against this backdrop, the real estate sector continued to benefit from urbanisation, infrastructure spending and sustained end-user preference for ownership, although demand conditions became more selective across markets and price segments.

In the residential segment, demand continued to display resilience, with a notable shift towards premium and higher-value housing. However, towards the end of the financial year, multiple external factors led to a drop in overall demand. Office and mixed-use real estate also continued to see support from occupier demand, aided by business expansion, infrastructure improvements and the growing preference for integrated work environments.

Tier II and III cities are in the evolving real estate landscape, supported by urbanisation, improving connectivity and decentralisation of economic activity. At the same time, these markets also reflected the impact of affordability pressures and a more cautious supply environment during the year, with housing sales and launches moderating across several Tier II cities as rising prices and shrinking affordable supply affected volumes.

Within this broader Tier II landscape, Gujarat continued to remain an important real estate market, supported by its industrial base, policy support and connectivity infrastructure. Vadodara, in particular, derives support from its established industrial ecosystem, its location within the Delhi-Mumbai Industrial Corridor framework and the ongoing improvement in regional connectivity through major transport infrastructure.

The Company continued to focus on the Vadodara market and made satisfactory progress in the development of the Alembic City campus, which comprises residential, commercial and community- oriented developments. Our residential portfolio in Vadodara comprises a range of products including premium low-rise duplex apartments, villas and apartments, supported by integrated planning, landscaped open spaces and lifestyle amenities.

The Company achieved satisfactory progress across its residential portfolio during the year. VEDA-II, one of the Companys gated community projects, which had been completed in the FY 2025, achieved full sales towards the end of the year. The Gardens, a niche duplex apartment project, also attained completion during the year and achieved full sales. Park Crescent, the Companys residential project comprising 3 BHK and 4 BHK configurations and launched in the previous year, continued to receive encouraging response from homebuyers.

The Company built depth in its leasing portfolio and mixed-use ecosystem. The new commercial office building, construction of which had commenced in the previous year, was completed during this financial year, with approximately 90% of the leasable area covered by lease commitments.

The Alembic Art District and the broader Alembic City campus attracted a large footfall validating our market positioning, by enhancing the townships mixed-use and community-oriented character. Through its role as a venue for exhibitions, performances, workshops and other community-oriented initiatives, the Art District has contributed to place-making and supported the distinct identity of Alembic City in the Vadodara market. Within the Alembic Art District, Space Studio, promoted and managed by the Groups CSR arm, Alembic CSR Foundation, to supports emerging artists.

The Companys Real Estate Business remains guided by calibrated execution, selective development and the expansion of leasing-led recurring income. While the medium-term demand outlook for Vadodara and other Tier-II markets continued to be good, near-term market conditions require discipline in pricing, product positioning and inventory management.

b) Bulk Drugs Business:

The API manufacturing business continued to operate in limited space due to constraints of a limited product portfolio, continued competitive intensity in several molecules and customer concentration, while the scale of the low-margin job-work segment remained subdued.

During the year, improved product yields, better utility optimisation and reduced dependence on imported raw materials enabled the Company to undertake a marginally higher level of job-work manufacturing within its limited product portfolio.

Despite these limitations, the Companys focused efforts have enabled it to sustain operations. However, the long-term outlook for this segment remains uncertain, necessitating continuous strategic evaluation.

(B) Finance:

The gross revenue of the Company was Rs. 23,193.16 Lakhs for the year under review as compared to Rs. 21,435.79 Lakhs for the previous year ended 31st March, 2025. The Company registered a net profit of Rs. 12,453.83 Lakhs as compared to net profit of Rs. 14,194.71 Lakhs for the previous year ended 31st March, 2025.

(C) Key Financial Ratios:

Key financial ratios are provided in the Notes to Financial Statements at Note no. 36(U), with the reasons for major variations, if any.

(D) Internal Control Systems and Adequacy:

The Company has in place established internal control systems, supported by documented policies and procedures, which are designed to ensure orderly conduct of business, safeguarding of assets, accuracy and completeness of accounting records, compliance with applicable policies and timely preparation of reliable financial information. During the year under review, the Bulk Drugs business migrated from SAP ECC to SAP S/4HANA and continued to strengthen system-based controls and process integration across identified functions.

The Company continues to have internal audit mechanisms covering its Real Estate and Bulk Drugs businesses in order to review the adequacy and effectiveness of internal controls, compliance with operating procedures and adherence to applicable policies and processes. In the Real Estate business, concurrent review mechanisms also continue to cover areas such as joint measurement verification.

The reports of the Internal Auditors are placed before the Audit Committee at regular intervals. The Audit Committee reviews, inter alia, the internal control framework, internal audit findings and the status of implementation of recommendations, and monitors corrective actions, wherever considered necessary.

(E) Human Resource Intervention:

The Company continued to structure its workforce during the year with a view to maintaining operational efficiency, with resources being added selectively in line with business and operational requirements. The flexibility measures introduced earlier for eligible roles continued during the year and remained aligned with the objective of supporting employee effectiveness and organizational agility.

The Company remained watchful of statutory developments in labour and employment matters, including the implementation of the four Labour Codes and the related regulatory developments thereunder.

Training and capability development remained an area of continued focus during the year. The Company continued its efforts towards providing comprehensive offline and online training across teams in order to support functional capability and organizational readiness.

(F) Health, Safety, Security and Environment:

Health, Safety, Security and Environment remained an area of continued focus during the year. The Companys operations continued to be supported by systems, procedures and training measures intended to ensure compliance with applicable Health, Safety, Security and Environment requirements.

Efforts towards conservation of energy and resources continued during the year, including construction of new commercial buildings with LEED certifications and encouragement for the use of electric vehicles. Periodic safety audits were continued through independent government- approved consultants. Environmental audits and HAZOP studies were also undertaken, and statutory compliance reports continued to be submitted to the regulators at periodic intervals. The monitoring framework also continued to extend to applicable waste management categories, including plastic waste, e-waste and bio-waste, wherever relevant or applicable.

	For and on behalf of the Board of Directors,
	Chirayu Amin
Date: 19th May, 2026	Chairman
Place: Vadodara	DIN: 00242549