Asston Pharmaceuticals Ltd Management Discussions

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1. Industry Overview

The Indian pharmaceutical industry continues to play a pivotal role in strengthening the countrys healthcare ecosystem and remains a significant contributor to economic growth. The industry has a well-diversified structure comprising generic and branded generic medicines, active pharmaceutical ingredients (APIs), contract manufacturing, specialty pharmaceuticals, biotechnology products and over-the-counter (OTC) products. India has emerged as a major pharmaceutical manufacturing hub globally, supported by its established manufacturing infrastructure, skilled human resources, cost- effective production capabilities and strong technical expertise. The growth of the industry continues to be supported by increasing healthcare expenditure, growing awareness regarding healthcare and preventive treatment, expansion of healthcare infrastructure, increasing prevalence of chronic and lifestyle-related diseases, and improved accessibility to medicines and healthcare services. The domestic pharmaceutical market continues to offer significant growth opportunities, while exports remain an important avenue for companies with established capabilities and regulatory approvals across international markets.

The pharmaceutical sector is witnessing continuous evolution driven by technological advancements, changing healthcare requirements and increasingly stringent regulatory and quality standards. Pharmaceutical companies are focusing on strengthening their manufacturing and quality-control systems, expanding and diversifying their product portfolios, improving operational and supply-chain efficiencies, and investing in research and development to develop differentiated and value-added products. Compliance with evolving regulatory requirements across various jurisdictions remains a key priority and necessitates continuous investments in quality systems, technology and process improvements. The sector also presents significant opportunities in areas such as specialty formulations, complex generics, contract manufacturing, innovative drug delivery systems and other emerging healthcare segments. Going forward, sustainable growth in the pharmaceutical industry is expected to be supported by increasing demand for quality and affordable healthcare products, innovation, operational efficiencies and the ability of industry participants to adapt to evolving regulatory and market dynamics.

2. Company overview and business performance

Asston Pharmaceuticals Limited is engaged in the pharmaceutical business and continues to focus on strengthening its manufacturing capabilities, expanding its product portfolio and developing opportunities across domestic and international markets. During the financial year under review, the Company continued to focus on operational efficiency, quality, customer relationships and sustainable business development.

For the financial year ended 31 March 2026, the Company recorded revenue from operations of approximately ^2,546.88 lakh, as compared with ^2,503.92 lakh in the previous financial year, representing a growth of approximately 1.72%. The Company reported Profit After Tax of approximately ^386.52 lakh, as against ^385.28 lakh in the previous year. The financial performance

reflects the Companys continued ability to maintain profitability while operating in a competitive and evolving pharmaceutical environment.

During the year, the Company also made significant progress in strengthening its manufacturing infrastructure. Commercial production at the Companys Unit II facility at Additional Ambernath, Maharashtra, commenced with effect from 21 January 2026. The commencement of operations at the new facility represents an important step towards increasing manufacturing capacity and creating opportunities for future product and market expansion

3. Segment-Wise / Product-Wise Performance

The Companys business operations are primarily focused on pharmaceutical products, with continued emphasis on strengthening its manufacturing and product capabilities.

Pharmaceutical Products

The Company continued to focus on maintaining and enhancing its pharmaceutical product portfolio, with emphasis on product quality, regulatory compliance, manufacturing efficiency and customer requirements. The Company continues to evaluate opportunities for product additions and portfolio expansion in line with market demand and its available manufacturing capabilities.

Nutraceutical Products

The Company has also expanded its manufacturing capabilities to include pharmaceutical and nutraceutical products through its Unit II facility. The additional manufacturing infrastructure provides the Company with greater flexibility to address emerging opportunities in healthcare and wellness segments and to support future portfolio diversification.

Export Markets

The Company continues to pursue opportunities in international markets and remains focused on strengthening its export-oriented business. During FY2025-26, the Company reported foreign exchange earnings of approximately ^2,414.76 lakh, demonstrating the importance of international markets to its business. Going forward, the Company intends to evaluate opportunities in existing as well as emerging markets, subject to applicable regulatory requirements and commercial viability.

4. Outlook

The Companys outlook remains focused on strengthening its core pharmaceutical business, improving manufacturing capabilities and pursuing opportunities for sustainable growth. The commencement of commercial production at Unit II provides the Company with additional capacity and operational flexibility and is expected to support its efforts towards product portfolio expansion and market development.

Going forward, the Company intends to focus on improving capacity utilisation, strengthening customer relationships, expanding its presence in identified domestic and international markets and maintaining stringent standards of quality and regulatory compliance. The Management will continue to monitor industry developments, market conditions and emerging opportunities and will take appropriate measures to enhance operational efficiency and long-term value creation for stakeholders.

5. Opportunities and Threats Key Opportunities

• Growing Healthcare Demand: Increasing healthcare expenditure, healthcare awareness and demand for quality and affordable pharmaceutical products present significant growth opportunities.

• Expansion of Domestic Market: Rising population, increasing life expectancy and the growing incidence of chronic and lifestyle-related diseases are expected to support sustained demand for pharmaceutical products.

• Product Portfolio Expansion: Opportunities exist to strengthen and diversify the product portfolio through the introduction of generic, branded, specialty and value-added pharmaceutical formulations.

• Export Potential: Increasing global demand for cost-effective medicines provides opportunities to expand presence across international and emerging markets.

• Contract Manufacturing: The growing trend towards outsourcing manufacturing activities presents opportunities in contract manufacturing and strategic business partnerships.

• Technology and Innovation: Adoption of advanced technologies, process improvements and research and development initiatives can enhance productivity, product quality and operational efficiency.

• Emerging Therapeutic Segments: Growth opportunities are available in specialised and high- demand therapeutic areas, supported by evolving healthcare needs and changing disease profiles.

Key Challenges / Threats

• Regulatory Environment: Increasingly stringent and evolving regulatory requirements may result in higher compliance costs and require continuous investment in quality and regulatory systems.

• Intense Competition: Competition from established domestic and international pharmaceutical companies may exert pressure on product pricing, market share and profitability.

• Raw Material Volatility: Fluctuations in the prices and availability of APIs, key raw materials and other inputs may adversely affect manufacturing costs and margins.

• Supply Chain Risks: Geopolitical developments, logistics disruptions and dependence on certain suppliers or geographies may impact the continuity and cost of supply.

• Pricing and Policy Risks: Changes in government policies, price controls and reimbursement mechanisms may adversely affect revenues and profitability in certain product segments.

• Quality and Compliance Risks: Increasing quality standards and regulatory scrutiny necessitate continuous monitoring, process improvements and investments in manufacturing and quality- control systems.

• Foreign Exchange Risk: Fluctuations in foreign exchange rates may impact the cost of imported inputs and the realisation of export revenues.

• Technological Changes: Rapid technological advancements require continuous investment in manufacturing capabilities, systems and innovation to remain competitive.

• Market Uncertainties: Changes in market conditions, customer preferences and healthcare policies may affect demand and require timely adaptation of the Companys business and product strategies.

7. Internal Control Systems and their Adequacy

The Company has established internal control systems commensurate with the size and nature of its operations. These controls are designed to provide reasonable assurance regarding the accuracy and reliability of financial reporting, safeguarding of assets, compliance with applicable laws and regulations, and efficiency of operations.

The Management continuously reviews the adequacy and effectiveness of internal controls and undertakes improvements wherever considered necessary. The Companys internal control framework is supported by appropriate financial and operational controls, periodic reviews and management oversight.

8. Human Resources and Industrial Relations

Human resources remain an important component of the Companys business operations. The Company recognises the importance of a skilled, committed and motivated workforce in achieving its operational and strategic objectives. Management continues to focus on employee development, workplace efficiency, compliance and maintaining a positive working environment.

The Company believes that continuous development of human capital, appropriate training and effective employee engagement are essential for supporting its growth plans, particularly in view of the expansion of its manufacturing capabilities.

9. Cautionary Statement

Statements in this Management Discussion and Analysis describing the Companys objectives, expectations, estimates or predictions may constitute forward-looking statements within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed or implied due to various factors, including changes in economic conditions, industry dynamics, regulatory requirements, market demand, competition, raw material prices, foreign exchange movements and other risks and uncertainties. The Company assumes no obligation to publicly update or revise any forward-looking statements except as may be required under applicable laws and regulations.